SECOND ANNIVERSARY ASSESSMENT

ARANGKADA PHILIPPINES FORUM

Realize the Potential!

2013FEBRUARY 26

RIZALBALLROOM

MAKATISHANGRI-LA

A PROJECT BY THE JOINT FOREIGN CHAMBERS OF THE PHILIPPINES

Philippine Copyright 2013

Published by:

The Arangkada Philippines Project (TAPP) The American Chamber of Commerce of the Philippines, Inc. (AmCham)

2nd Floor, Corinthian Plaza, 121 Paseo de Roxas, Makati City, Philippines

Tel. No. : +63 (2) 751-1495

Fax : +63 (2) 811-3081

E-mail : arangkada@arangkadaphilippines.com

Website : www.arangkadaphilippines.com

All rights reserved. This assessment publication may not be reproduced in whole or in part, in any form, for commercial purposes. It is, however, an advocacy publication and its use for economic policy advocacy is highly encouraged with or without attribution.

The views expressed in the Second Anniversary Assessment are those of the experts who cooperated with The Arangkada Philippines Project administered by the American Chamber of Commerce of the Philippines, and not necessarily those of the many private and public sector sponsors listed elsewhere in the document. Some of the activities reviewed in this assessment are made possible by the support of the American People through the United States Agency for International Development (USAID). The contents of the Second Anniversary Assessment represent the opinion of the persons who drafted the Second Anniversary Assessment as organized under The Arangkada Philippines Project administered by the American Chamber of Commerce of the Philippines and do not necessarily reflect the views of USAID or the United States Government.

2013 Arangkada Philippines Second Anniversary Forum: Assessment of Year 2012

Printing and color separation by : Corces Printing

TABLE OF CONTENTS

1 Part 1: Growing Too Slow

8 Part 2: Becoming More Competitive

Part 3: Big Winner Sectors

13 Agribusiness

22 Business Process Outsourcing

36 Creative Industries

44 Infrastructure Policy

54 Airports

62 Power

70 Roads & Rails

78 Seaports

87 Telecommunications

93 Water

100 Manufacturing

109 Logistics

118 Mining

129 Tourism, Medical Travel, & Retirement

Part 4: General Business Environment

142 Business Costs

150 Environment & Natural Disasters

159 Foreign Equity & Professionals

165 Governance

173 Judicial

180 Labor

188 Legislation

195 Local Governance

203 Macroeconomic Policy

216 Security

225 Social Services Education

234 Health & Population

240 Poverty

LIST OF ABBREVIATIONS

3G Third Generation

4Ps Pantawid Pamilyang Pilipino Program (conditional cash transfer program)

ACT Alcohol, Cigarettes, and Tobacco

ADB Asian Development Bank

AFTA ASEAN Free Trade Area

AO Administrative Order

ARMM Autonomous Region of Muslim Mindanao

ARTA Anti-Red Tape Act

ARTFF Anti-Red Tape Task Force

ASEAN Association of Southeast Asian Nations

ASEAN-6 Indonesia, Philippines, Malaysia, Singapore, Thailand, and Vietnam

ASTI Advance Science and Technology Institute

BEST Basic English Skills Training

BBC British Broadcasting Corporation

BI Bureau of Immigration

BIR Bureau of Internal Revenue

BOC Bureau of Customs

BOI Board of Investments

BOT Build-Operate-Transfer

BPAP Business Processing Association of the Philippines

BLPS Business Process and Licensing System

BPO Business Process Outsourcing

BSP Bangko Sentral ng Pilipinas

CA Court of Appeals

CAAP Civil Aviation Authority of the Philippines

CAO Customs Administrative Order

CALA Cavite-Laguna

CALABARZON Cavite, Laguna, Batangas, Rizal, and Quezon

CARP Comprehensive Agrarian Reform Program

CCT Common Carriers Tax

CEO Chief Executive Officer

CECP Creative Economies Council of the Philippines

CHARDO Chassis RORO

CHED Commission on Higher Education

CICT Commission on Information and Communications Technology

CIDA Canadian International Development Agency

CIQ Customs, Immigration and Quarantine

CITEM Center for International Trade Expositions and Missions

CMO CHED Memorandum Order

CNN Cable News Network

COA Commission on Audit

COE Centers of Excellence

CSC Civil Service Commission

CTMA Customs and Tariff Modernization Act

DBM Department of Budget and Management

DCP Design Center of the Philippines

DENR Department of Environment and Natural Resources

DepEd Department of Education

DICT Department of Information and Communications Technology

DILG Department of Interior and Local Government

DO Department Order

DOE Department of Energy

DOF Department of Finance

DOH Department of Health

DOJ Department of Justice

DOLE Department of Labor and Employment

DOST Department of Science and Technology

DOST-SEI DOST Science Education Institute

DOT Department of Tourism

DOTC Department of Transportation and Communications

DPWH Department of Public Works and Highways

DSWD Department of Social Welfare and Development

DTI Department of Trade and Industry

E2M Electronic-to-Mobile

e Electronic; Estimate

e-AdEPT Electronic Advanced English Pre-employment Training

ECCP uropean Chamber of Commerce of the Philippines

EITI Extractive Industries Transparency Initiative

EP Exploration Permit

EPIRA Electric Power Industry Reform Act

ERC Energy Regulatory Commission

EU European Union

EVAT Expanded Value Added Tax

f Forecast

FDA Food and Drug Administration

FDI Foreign Direct Investment

FINL Foreign Investment Negative List

FOI Freedom of Information

FPI Federation of Philippine Industries

FTA Free Trade Agreement

GCAT Global Competitiveness Assessment Tool

GCG Governance Commission for GOCCs

GDP Gross Domestic Product

GILAS Gearing up Internet Literacy and Access for Students

GPBT Gross Philippine Billings Tax

GPH Government of the Philippines

GPS Global Positioning System

GOCC Government-Owned and Controlled Corporation

GSIS Government Service Insurance System

HDM-4 Highway Development and Management Model

HIM Health Information Management

HLURB Housing and Land Use Regulatory Board

HR Human Resources

HUC Highly-Urbanized Cities

IACWS Inter-Agency Committee on the Water Sector

ICC Investment Coordination Committee

ICT Information and Communications Technology

ICTO Information and Communications Technology Office

IFC International Finance Corporation

IMD International Institute for Management Development

INFRACOM Infrastructure Committee

IOR Importer of Record

IP Intellectual Property

IPA Investment Promotion Agencies

IPR Intellectual Property Rights

IRCAM Integrated Risk Communication, Assessment, and Management

IRR Implementing Rules and Regulations

IRRI International Rice Research Institute

IT Information Technology

JBIC Japan Bank for International Cooperation

JDR Judicial Dispute Resolution

JFC Joint Foreign Chambers of the Philippines

JICA Japan International Cooperation Agency

JMC Joint Memorandum Circular

JV Joint Venture

JVA Joint Venture Agreement

K-12 Kindergarten to Grade 12

LBP Land Bank of the Philippines

LEDAC Legislative Executive Development Advisory Council

LGU Local Government Units

LNG Liquefied Natural Gas

LRT Light Rail Transit

LRTA Light Rail Transit Authority

MARINA Maritime Industry Authority

MAP Management Association of the Philippines

MCC Millennium Challenge Corporation

MDC Mineral Development Council

MGB Mines and Geosciences Bureau

MIAA Manila International Airport Authority

MICC Mining Industry Coordinating Council

MMDA Metropolitan Manila Development Authority

MRT Metro Rail Transit

MWSS Metropolitan Waterworks and Sewerage System

NAIA Ninoy Aquino International Airport

NCC National Competitiveness Council

NCIP National Commission on Indigenous Peoples

NCR National Capital Region

NDP National Design Policy

NEDA National Economic and Development

NGCP National Grid Corporation of the Philippine

NGO Non-Governmental Organization

NLES North Luzon Expressway

NLRC National Labor Relations Commission

No. Number

NPA New Peoples Army

NPAC National Port Advisory Council

NSSMP National Sewerage and Sanitation Management Program

NTC National Telecommunications Commission

NWC New Wave City

NWRB National Water Resources Board

NWRMO National Water Resources Management Office

ODA Official Development Assistance

OFW Overseas Filipino Worker

OJT On-the-Job Training

OMD Office of the Ombudsman

p Projection

PA Philippine Army

PAGASA Philippine Atmospheric, Geophysical, and Astronomical Services

PBG Philippine Business Group

PC Personal Computer

PCAARRD Philippine Council for Agriculture, Aquatic, and Natural Resources Research and Development

PCCC Philippine Climate Change Commission

PCI Per Capita Income

PD Presidential Decree

PDDCP Product Development and Design Center of the Philippines

PDEA Philippine Drug Enforcement Agency

PDP Philippine Development Plan

PEZA Philippine Economi