Philippine Globalization in the New Millennium IDEAs Conference on A Decade After: Recovery and Adjustment since the East Asian Crisis 12-14 July 2007.

Philippine Philippine Globalization in the Globalization in the

New MillenniumNew MillenniumIDEAs Conference on IDEAs Conference on

A Decade After: Recovery and A Decade After: Recovery and Adjustment since the East Asian Adjustment since the East Asian

Crisis Crisis 12-14 July 200712-14 July 2007

Macroeconomic ContextMacroeconomic Context

““Jobless Growth”Jobless Growth” MTPDP 2004 – 2010MTPDP 2004 – 2010

acknowledged the need to address the acknowledged the need to address the country’s unemployment problem country’s unemployment problem

1.5 million jobs per year; 10 million jobs by 1.5 million jobs per year; 10 million jobs by 20102010

Early indicationsEarly indications In 2004: 977,000 new jobs were created; In 2004: 977,000 new jobs were created;

1,289,000 new entrants into the labor 1,289,000 new entrants into the labor marketmarket

In 2005: 455,000 new jobs were created; led In 2005: 455,000 new jobs were created; led to a drop in the unemployed by 100,000 but to a drop in the unemployed by 100,000 but unemployment rate remained high at 11.4%. unemployment rate remained high at 11.4%.

Such inability to create enough jobs points Such inability to create enough jobs points to the absence of a cohesive strategy to to the absence of a cohesive strategy to address the unemployment issue.address the unemployment issue.

RP’s External Economic RP’s External Economic Ties: Ties:

Three Salient Features Three Salient Features Business process outsourcing Business process outsourcing

(BPO) (BPO) Labor migration / Labor Labor migration / Labor

“exports”“exports”Bilateral trade and / or Bilateral trade and / or

investment treatiesinvestment treaties

Business Process Business Process Outsourcing (BPO)Outsourcing (BPO)

Types of BPO Services in the Types of BPO Services in the PhilippinesPhilippines Contact / Call CenterContact / Call Center Back OfficeBack Office Data Transcription Data Transcription AnimationAnimation Software DevelopmentSoftware Development Engineering DevelopmentEngineering Development Digital ContentDigital Content

BPO Sector: Recent BPO Sector: Recent TrendsTrends

As of end-2005, the BPO sector As of end-2005, the BPO sector employed 163,000 workers.employed 163,000 workers.

The contact / call center sub-The contact / call center sub-sector employed 70% of the BPO sector employed 70% of the BPO workers in the Philippines.workers in the Philippines.

The same sub-sector contributed The same sub-sector contributed 75% (USD 1.8 billion) of total BPO 75% (USD 1.8 billion) of total BPO revenues in 2005.revenues in 2005.

The whole BPO sector represented The whole BPO sector represented 0.075% of GDP in 2000, but this 0.075% of GDP in 2000, but this increased to 2.4% in 2005.increased to 2.4% in 2005.

BPO Sector OverviewBPO Sector Overview

No. of Firms

Revenues Employment

USD Million % Share

Employees % Share

Contact Center 114 1,792 75.10 112,000 68.61

Back Office 62 180 7.54 22,500 13.78

Medical Transcription 64 70 2.93 5,500 3.37

Legal Transcriptions 9 6 0.25 450 0.28

Other Data Transcription 39 1.63 3,000 1.84

Software Development 300 204 8.55 12,000 7.35

Animation 42 40 1.68 4,500 2.76

Engineering Design 14 48 2.01 2,800 1.72

Digital Content 11 7 0.29 500 0.31

Total 616 2,386 100.00 163,250 100.00

BPO Sector: Recent BPO Sector: Recent TrendsTrends

Sole dynamic sector in the economy in recent Sole dynamic sector in the economy in recent years.years. Regarded by the government as the panacea of Regarded by the government as the panacea of

the unemployment problem / jobless growth the unemployment problem / jobless growth phenomenon.phenomenon.

Employment in this sector is projected to rise Employment in this sector is projected to rise by 38% annually between 2005 and 2010. by 38% annually between 2005 and 2010. 27% of all new jobs in the country (if current 27% of all new jobs in the country (if current

trends persist) in 2010 will be generated by the trends persist) in 2010 will be generated by the BPO industry.BPO industry.

Credited for surge in demand for office Credited for surge in demand for office spaces / real estate, thus making the real spaces / real estate, thus making the real property sector the highest-growing Services property sector the highest-growing Services sub-sector in 2006.sub-sector in 2006.

Development Implications Development Implications of the BPO Sectorof the BPO Sector

Threats to Philippine performance in the global Threats to Philippine performance in the global BPO industry aboundBPO industry abound safety and political issues; poor infrastructure; safety and political issues; poor infrastructure;

expensive inputsexpensive inputs stiff competition from India, Malaysia, Chinastiff competition from India, Malaysia, China Job and Skills mismatch: Hiring rate for call center Job and Skills mismatch: Hiring rate for call center

applicants is only 14%.applicants is only 14%. Employee profile biased not only for highly Employee profile biased not only for highly

educated individuals, but particularly educated individuals, but particularly graduates of top schools who could otherwise graduates of top schools who could otherwise have been employed in more dynamic sectors have been employed in more dynamic sectors of the economy.of the economy. Diploma from a top school guarantees English Diploma from a top school guarantees English

proficiency, computer literacy.proficiency, computer literacy. Call centers also hire on average twice as many Call centers also hire on average twice as many

middle managers than call center agents.middle managers than call center agents. Non-trivial wage premium.Non-trivial wage premium.


Low knowledge intensity, no Low knowledge intensity, no technology transfer / human technology transfer / human resource development resource development BPO sector is clearly taking advantage BPO sector is clearly taking advantage

of cheap skilled labor.of cheap skilled labor. How can the sector move up the How can the sector move up the

knowledge intensity ladder? knowledge intensity ladder? Very low inter-sectoral linkages Very low inter-sectoral linkages

Estimates of the sector’s forward and Estimates of the sector’s forward and backward linkages are well below 1.backward linkages are well below 1.

The Philippine BPO industry is not a key The Philippine BPO industry is not a key sector.sector.


BPO sector does not represent BPO sector does not represent any opportunity for majority of any opportunity for majority of the unemployed, much less the the unemployed, much less the poor.poor. Most of the unemployed are 15 – 24 Most of the unemployed are 15 – 24

years old with no college diploma.years old with no college diploma. Poverty is still most deeply felt by Poverty is still most deeply felt by

the agricultural peasantry.the agricultural peasantry. BPO has no linkage to agricultural BPO has no linkage to agricultural

sector.sector.

Philippine Labor ExportsPhilippine Labor Exports

Deployed Overseas Filipino Workers (OFWs)

Year Total Land-Based Sea-Based

1990 446,095 334,883 111,212

1995 654.022 488,621 165,401

2000 841,628 643,304 198,324

2001 866,599 661,648 204,951

2002 891,908 682,315 209,593

2003 867,969 651,938 216,031

2004 933,588 704,586 229,002

2005 988,6155 740,632 247,983

2006 1,062,567 788,070 274,497

OFW Remittances, 1990 – OFW Remittances, 1990 – 20062006

(USD Thousands)(USD Thousands)

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

1990 1992 1994 1996 1998 2000 2002 2004 2006

Year

Annual Growth Rate of OFW Annual Growth Rate of OFW RemittancesRemittances

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Remittances & FDI (1999 - Remittances & FDI (1999 - 2006)2006)

USD MillionsUSD Millions

0

2000

4000

6000

8000

10000

12000

14000

1999 2000 2001 2002 2003 2004 2005 2006

Remittances

FDI

Portfolio Inflows

Philippine Labor ExportsPhilippine Labor ExportsRemittances have grown at an annual Remittances have grown at an annual

average of 16.286% in the past five average of 16.286% in the past five yearsyears 16.91% average annual growth rate since 16.91% average annual growth rate since

19911991 Dip in remittances occurred during the Dip in remittances occurred during the

Estrada Administration (1998 – 2001)Estrada Administration (1998 – 2001)Along with the BPO sector, these Along with the BPO sector, these

remittances have fueled consumption remittances have fueled consumption growth and the recent real estate surge.growth and the recent real estate surge.

Dramatic appreciation of the Philippine Dramatic appreciation of the Philippine pesopeso The government is by and large pleased The government is by and large pleased

with this.with this.

PhP / USD Exchange Rate PhP / USD Exchange Rate TrendsTrends

1996 1997 1998 1999 2000 2001 2002 2003

PhP/ USD

26.22 29.47 40.89 39.09 44.19 50.99 51.60 54.20

% -1.9 -12.4 -38.8 4.4 -13.1 -15.4 -1.2 -5.0

2004 2005 20062007

Jan Feb Mar Apr May

PhP/ USD

56.04 55.09 51.31 48.91 48.38 48.52 47.82 46.81

% -3.4 1.7 6.8 8.8

PhP Cross RatesPhP Cross RatesPerio

dEURO HK SK Sing Malay Thai Indo India

Dollar Dollar Won Dollar Ringgit

Baht Rupiah

Rupee

1997 3.8068 0.0314 19.7974

10.5341

0.9684 0.0105

1998 5.279 0.0294 24.4744

10.4582

0.9981 0.0042

1999 41.7205

5.0337 0.0329 23.0852

10.2879

1.034 0.0051 0.9093

2000 40.7246

5.6715 0.0391 25.6243

11.6296

1.0997 0.0053 0.984

2001 45.6939

6.5404 0.0397 28.4775

13.4208

1.1472 0.005 1.0826

2002 48.8125

6.6174 0.0424 28.8364

13.6979

1.2006 0.0056 1.0764

2003 61.3506

6.961 0.0456 31.1237

14.2659

1.307 0.0063 1.1661

2004 69.6852

7.1955 0.049 33.1644

14.749 1.3932 0.0063 1.2391

2005 68.6102

7.083 0.0538 33.109 14.5482

1.3697 0.0057 1.2523

2006 64.4473

6.606 0.0538 32.302 13.9972

1.3542 0.0056 1.136

PhP has been appreciating PhP has been appreciating against other currencies as well against other currencies as well in the past two years.in the past two years.

Philippine Labor ExportsPhilippine Labor Exports

Moreover, the inflow of OFW Moreover, the inflow of OFW remittances has enabled the BSP remittances has enabled the BSP to increase its foreign exchange to increase its foreign exchange reserves to about 4 months’ reserves to about 4 months’ worth of imports.worth of imports.

Gross Intl Reserves Gross Intl Reserves (1997-2007)(1997-2007)

USD MillionsUSD Millions

0

5000

10000

15000

20000

25000

30000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Development Implications Development Implications of of

Labor ExportsLabor ExportsPrimary example of brain drainPrimary example of brain drain

Mobile labor is well-educated, Mobile labor is well-educated, highly-skilled, and often belonging highly-skilled, and often belonging to the Philippine middle classto the Philippine middle class

Medical doctors, nurses, and other Medical doctors, nurses, and other medical practitioners, engineers, medical practitioners, engineers, teachers.teachers.

De-skilling: De-skilling: Doctors taking up nursing courses in Doctors taking up nursing courses in

order to leave the country.order to leave the country. Nurses becoming careworkers. Nurses becoming careworkers.


Labor ExportsLabor ExportsHollowing out of the labor Hollowing out of the labor

marketmarket More difficult to move up the More difficult to move up the

knowledge-intensity ladder in knowledge-intensity ladder in exportsexports


Labor ExportsLabor Exports Peso appreciationPeso appreciation

With further appreciation of the peso, the With further appreciation of the peso, the effect of cheaper inputs (since exports are effect of cheaper inputs (since exports are also largely input dependent) will be also largely input dependent) will be outweighed by higher domestic costs, thus outweighed by higher domestic costs, thus eroding whatever little export eroding whatever little export competitiveness the Philippines possesses.competitiveness the Philippines possesses.

Already, exporters have been wary of signing Already, exporters have been wary of signing contractscontracts Standard contracts are for 2 years.Standard contracts are for 2 years.

De facto Factor Price Equalization, but via De facto Factor Price Equalization, but via the exchange ratethe exchange rate OFWs are complaining more and more about the OFWs are complaining more and more about the

smaller wage premium they enjoy.smaller wage premium they enjoy.


Labor ExportsLabor ExportsSocial cost of foreign reservesSocial cost of foreign reserves

Reserves generally seen as Reserves generally seen as necessary to preclude financial necessary to preclude financial crisescrises

Bilateral Investment and/or Bilateral Investment and/or Trade Treaties (BITTs)Trade Treaties (BITTs)

ArgentinaArgentina AustraliaAustralia AustriaAustria Bangladesh Bangladesh BelgiumBelgium Cambodia Cambodia Canada Canada Chile Chile China China Czech Republic Czech Republic DenmarkDenmark FinlandFinland FranceFrance GermanyGermany ItalyItaly

JapanJapan MyanmarMyanmar NetherlandsNetherlands Pakistan Pakistan PortugalPortugal Republic of KoreaRepublic of Korea RomaniaRomania Russian FederationRussian Federation SpainSpain SwedenSweden SwitzerlandSwitzerland ThailandThailand TurkeyTurkey United KingdomUnited Kingdom

BITTs OverviewBITTs Overview

Standard provisions on Standard provisions on national treatmentnational treatment ExpropriationExpropriation CompensationCompensation Dispute settlement. Dispute settlement.

Excerpts from Australia – Excerpts from Australia – RP BITRP BIT

1. Neither Party shall nationalise, expropriate or subject to 1. Neither Party shall nationalise, expropriate or subject to measures having effect equivalent to nationalisation or measures having effect equivalent to nationalisation or expropriation (hereinafter referred to as "expropriation") expropriation (hereinafter referred to as "expropriation") the investments of investors of the other Party unless the investments of investors of the other Party unless the following conditions are complied with: the following conditions are complied with:

(a) the expropriation is for a public purpose related to the (a) the expropriation is for a public purpose related to the internal needs of that Party and under due process of internal needs of that Party and under due process of law; law;

(b) the expropriation is non-discriminatory; and (b) the expropriation is non-discriminatory; and (c) the expropriation is accompanied by the payment of (c) the expropriation is accompanied by the payment of

prompt, adequate and effectiveprompt, adequate and effective compensation. compensation. 2. The compensation … shall be computed on the basis of 2. The compensation … shall be computed on the basis of

the the market valuemarket value of the investment of the investment immediately before immediately before the expropriation or impending expropriation became the expropriation or impending expropriation became public knowledge.public knowledge. Where that value cannot be readily Where that value cannot be readily ascertained, the compensation shall be determined in ascertained, the compensation shall be determined in accordance with generally recognised principles of accordance with generally recognised principles of valuation and equitable principles taking into account valuation and equitable principles taking into account the capital invested, depreciation, capital already the capital invested, depreciation, capital already repatriated, replacement value, currency exchange rate repatriated, replacement value, currency exchange rate movements and other relevant factors.movements and other relevant factors.

BITTs OverviewBITTs Overview

Rejection of the Calvo doctrine Rejection of the Calvo doctrine insists that investment disputes lie within insists that investment disputes lie within

the exclusive purview of domestic the exclusive purview of domestic legislation, and legislation, and

strikes at the core of the international strikes at the core of the international minimum standard by repudiating the claim minimum standard by repudiating the claim to MFN status.to MFN status.

Japan – Philippines Economic Japan – Philippines Economic Partnership Agreement (JPEPA): Partnership Agreement (JPEPA): 9 September 20069 September 2006 most recent and probably the most most recent and probably the most

controversial BITT that the Philippines is controversial BITT that the Philippines is party to. party to.

JPEPA ProvisionsJPEPA ProvisionsComprehensive BITT covering major areas Comprehensive BITT covering major areas

including: including: trade in goods and servicestrade in goods and services

Removal of tariffs on products (agricultural and Removal of tariffs on products (agricultural and non-agricultural)non-agricultural)

Gradual tariff reduction towards zero tariff on Gradual tariff reduction towards zero tariff on selected agricultural and non-agricultural items.selected agricultural and non-agricultural items.

MFN tariffs on the automotive sector (sensitive MFN tariffs on the automotive sector (sensitive sector for RP)sector for RP) elimination of tariffs by 2010 under AFTAelimination of tariffs by 2010 under AFTA

Exclusions: Rice, wheat, milk, herrings, Exclusions: Rice, wheat, milk, herrings, sardines, mackerel, and other fish.sardines, mackerel, and other fish.

Japan will allow Filipino nurses and careworkers Japan will allow Filipino nurses and careworkers to access the Japanese market, with conditions.to access the Japanese market, with conditions. must master written and spoken Nippongo must master written and spoken Nippongo must pass the nursing board exam within two yearsmust pass the nursing board exam within two years

JPEPA ProvisionsJPEPA Provisions investmentsinvestments

Article 89: National TreatmentArticle 89: National Treatment Article 90: MFN TreatmentArticle 90: MFN Treatment prohibits requirements on export volumes, prohibits requirements on export volumes,

domestic content, input, foreign exchange domestic content, input, foreign exchange earning , employment, technology transfer, earning , employment, technology transfer, R&D, etcR&D, etc

intellectual property intellectual property Article 127Article 127New Varieties of PlantsNew Varieties of PlantsEach Party recognizes the importance of providing Each Party recognizes the importance of providing

a system of protection of a system of protection of new varieties of plantsnew varieties of plants and shall, within its capabilities, endeavor and shall, within its capabilities, endeavor to to increase the number of plant genera and increase the number of plant genera and species that can be protected under its laws species that can be protected under its laws and regulations. and regulations. In this regard, each Party shall In this regard, each Party shall consider the concerns of the other Party.consider the concerns of the other Party.

JPEPA ProvisionsJPEPA Provisions

government procurementgovernment procurement accords MFN treatment in government accords MFN treatment in government

procurement procedures, with a new procurement procedures, with a new round of negotiations for national round of negotiations for national treatment in five years.treatment in five years.

Trade facilitation and Trade facilitation and harmonization of customs harmonization of customs procedures, use of ICT and procedures, use of ICT and paperless tradingpaperless trading

movement of natural personsmovement of natural personscompetition policycompetition policy

JPEPA’s Development JPEPA’s Development ImplicationsImplications

Philippine trade law experts have said Philippine trade law experts have said that the JPEPA’s implications are “very that the JPEPA’s implications are “very far-reaching” that it may possibly far-reaching” that it may possibly require full-bodied legislation and/or require full-bodied legislation and/or amendments to existing legislation.amendments to existing legislation.

Fiscal ImpactFiscal Impact DOF estimates PhP 4 billion in forgone DOF estimates PhP 4 billion in forgone

revenues. revenues. Other estimates: PhP 3 – 5 billion range.Other estimates: PhP 3 – 5 billion range. huge costs in order to comply with huge costs in order to comply with

numerous provisions of the treaty, most if numerous provisions of the treaty, most if not all of which are not development not all of which are not development priorities.priorities.


Negligible growth impact: Negligible growth impact: Most upbeat estimate is that the Most upbeat estimate is that the

treaty will contribute 0.09% GDP treaty will contribute 0.09% GDP growth. growth.

Japan is already the 2nd largest Japan is already the 2nd largest trading partner of the Philippinestrading partner of the Philippines USD 1.5B total exports and imports in USD 1.5B total exports and imports in

2005)2005) any comparative advantage the any comparative advantage the

Philippines has vis-a-vis Japan will Philippines has vis-a-vis Japan will come to pass with or without a come to pass with or without a JPEPA. JPEPA.

Overview of Philippine Overview of Philippine TariffsTariffs

SectorNo. of Lines

Simple Average

Weighted Ave.

Agriculture and Food 1,407 11.85 9.22

Chemicals and Chemical Products

2,122 4.64 4.16

Textiles, Paper, Wood, and Leather

1,966 9.18 6.84

Base Metals and Non-base Metals

1,317 5.69 3.69

Machinery and Transport Equipment

4,497 7.96 1.78

Agriculture 1,407 11.87 9.22

Mining 131 2.47 2.79

Manufacturing 9,711 7.26 2.97

Overall 11,309 7.77 3.56


It can be argued that further reduction of tariffs It can be argued that further reduction of tariffs will no longer pose much harm to industries. will no longer pose much harm to industries. JPEPA’s pernicious elements, however, lie JPEPA’s pernicious elements, however, lie beyond the standard tariff reduction beyond the standard tariff reduction requirements of a FTA / BTT agreement, requirements of a FTA / BTT agreement, particularly in its provisions on other issues particularly in its provisions on other issues such as the following:such as the following:

The Singapore Issues: The Singapore Issues: investment, competition policy, trade facilitation, investment, competition policy, trade facilitation,

and government procurementand government procurement have not made headway in the WTO talks, with have not made headway in the WTO talks, with

developing-country members insisting that the more developing-country members insisting that the more fundamental and developmental issues.fundamental and developmental issues.

The Philippines was part of the G-22 alliance during The Philippines was part of the G-22 alliance during the Cancun ministerial of the WTO (2003). the Cancun ministerial of the WTO (2003).

All these issues now have been included in the All these issues now have been included in the JPEPA.JPEPA.


JPEPA and IPRJPEPA and IPR JPEPA effectively restricts and stifles the JPEPA effectively restricts and stifles the

recognized flexibilities under the TRIPSrecognized flexibilities under the TRIPS International Treaty on Plant Genetic International Treaty on Plant Genetic

Resources for Food and Agriculture (ITPGRFA) Resources for Food and Agriculture (ITPGRFA) (September 2006); awaiting concrete national (September 2006); awaiting concrete national implementation. implementation.

JPEPA does not recognize the inherent right of JPEPA does not recognize the inherent right of farmers to accumulate, use, exchange and sell farmers to accumulate, use, exchange and sell farm-saved seeds and/or propagating materials farm-saved seeds and/or propagating materials by either providing a limitation on its IPR by either providing a limitation on its IPR provisions or sufficient safeguards provisions or sufficient safeguards acknowledging and protecting it.acknowledging and protecting it.

Strengthening and increasing the scope of Strengthening and increasing the scope of plant variety protection will only promote plant variety protection will only promote further monopoly control over seeds by TNCs.further monopoly control over seeds by TNCs.


Legalization of trade in hazardous and toxic Legalization of trade in hazardous and toxic wastewaste Almost all goods, including toxic wastes, will be Almost all goods, including toxic wastes, will be

granted a preferential tariff rate of zero percent. granted a preferential tariff rate of zero percent. Article 29Article 29

Originating GoodsOriginating Goods2. For the purposes of subparagraph 1(a) above, the 2. For the purposes of subparagraph 1(a) above, the

following goods shall be considered as being wholly following goods shall be considered as being wholly obtained or produced entirely in a Party: …obtained or produced entirely in a Party: …

““(i) articles collected in the Party which (i) articles collected in the Party which can no longer can no longer perform their original purpose perform their original purpose in the Party nor in the Party nor are are

capable of being restored or repaired and which are fit capable of being restored or repaired and which are fit only for disposal only for disposal or for the recovery of parts or raw or for the recovery of parts or raw

materials;materials;““(j) (j) scrap and waste scrap and waste derived from manufacturing or derived from manufacturing or

processing operations or from consumption in the Party processing operations or from consumption in the Party and fit only for disposal or for the recovery of raw and fit only for disposal or for the recovery of raw

materials;materials;““(k) (k) parts or raw materials recovered parts or raw materials recovered in the Party from in the Party from

articles which can no longer perform their original articles which can no longer perform their original purpose nor are capable of being restored or repaired;purpose nor are capable of being restored or repaired;

DESCRIPTION MFN JPEPA

Ash and residues (other than from the manufacture of iron or steel), containing arsenic, mercury, thallium or their mixtures

3% 0%

Ash and residues from the incineration of municipal waste 3% 0%

Waste pharmaceuticals 20% 0%

Residual products of the chemical or allied industries, not elsewhere specified or included; municipal waste; sewage sludge; other wastes

30% 0%

Municipal waste 30% 0%

Sewage sludge 30% 0%

Clinical waste — adhesive dressings and other articles having adhesive layer; wadding gauze bandages, surgical gloves

30% 0%

Other clinical waste 30% 0%

Waste organic solvents — halogenated, and other 30% 0%

Other wastes from other chemical or allied industries containing organic constituents, other

30% 0%

Wastes of metal pickling liquors, hydraulic fluids, brake fluids and anti-freeze fluids

30% 0%

Worn clothing and other worn articles / 0%

Used or new rags, scrap twine, cordage, rope and cables and worn out articles of twine, cordage, rope or cables, of textile materials

/ 0%


According to law experts, the importation According to law experts, the importation of toxic and hazardous wastes comes into of toxic and hazardous wastes comes into conflict with numerous Philippines laws:conflict with numerous Philippines laws: Under the Constitution, the State is mandated to Under the Constitution, the State is mandated to

promote the people’s right to health (Art. II, Sec. promote the people’s right to health (Art. II, Sec. 15) and right to a balanced and healthful ecology 15) and right to a balanced and healthful ecology (Art. II, Sec. 16).(Art. II, Sec. 16).

Republic Act No. 6969, the Toxic Substance and Republic Act No. 6969, the Toxic Substance and Hazardous and Nuclear Waste Act of 1990Hazardous and Nuclear Waste Act of 1990

Clean Air Act of 1999 Clean Air Act of 1999 Republic Act No. 4653 Republic Act No. 4653 Basel Convention, which was adopted in 1989 by Basel Convention, which was adopted in 1989 by

133 countries (including the Philippines and 133 countries (including the Philippines and Japan) to minimize the production and regulate Japan) to minimize the production and regulate the trans-boundary movement of hazardous and the trans-boundary movement of hazardous and toxic materials.toxic materials.

Overall Development Overall Development ChallengesChallenges

Absence of an overarching industrial Absence of an overarching industrial and development strategyand development strategy Particularly in the context of already Particularly in the context of already

extremely low tariffsextremely low tariffs Aggressive negotiation and pursuit of Aggressive negotiation and pursuit of

trade deals in spite of the absence of a trade deals in spite of the absence of a master planmaster plan DTI handles GATT, NAMA, et alDTI handles GATT, NAMA, et al DoA handles AoADoA handles AoA NEDA handles GATSNEDA handles GATS

The Government’s strategy is laissez The Government’s strategy is laissez faire.faire.


GDP Growth at 6.9% in the first three months of GDP Growth at 6.9% in the first three months of 20072007

On the production side:On the production side: Service sector is highest contributor to growth (9.1%)Service sector is highest contributor to growth (9.1%)

Important Sub-sectors: finance (13.4%); transport, Important Sub-sectors: finance (13.4%); transport, communications, and storage (9.6%); wholesale and communications, and storage (9.6%); wholesale and retail trade (9.1%); private services (8.9%); government retail trade (9.1%); private services (8.9%); government services (7.1%)services (7.1%)

Industry grew at 5.3%Industry grew at 5.3% Agriculture at 4.3%Agriculture at 4.3%

Demand / Expenditure Side:Demand / Expenditure Side: Consumption grew at 5.9%Consumption grew at 5.9% Government Spending grew at 13.1%Government Spending grew at 13.1%

Due to expenditures in preparation for May 2007 Due to expenditures in preparation for May 2007 electionselections

Exports grew at 9.1%Exports grew at 9.1% Investments grew at 0.6%Investments grew at 0.6%

Investments in durable equipment decreased by -0.4% Investments in durable equipment decreased by -0.4% Government construction grew 16.9%Government construction grew 16.9%


Dismal outlook on overall economic Dismal outlook on overall economic performanceperformance

Government spending surely not sustainable: Government spending surely not sustainable: News on recent fiscal revenues have not been News on recent fiscal revenues have not been good.good.

Export outlook has also been bleak. Export outlook has also been bleak. Electronics demand worldwide is expected to slow Electronics demand worldwide is expected to slow

down, alongside projected slowdowns of major down, alongside projected slowdowns of major economies in the world. Electronics exports economies in the world. Electronics exports comprise almost 75% of our exports in recent comprise almost 75% of our exports in recent years.years.

Indeed, the paradoxical shrinking of the import bill Indeed, the paradoxical shrinking of the import bill has been partly due to a weakening of imports of has been partly due to a weakening of imports of electronic inputs. This is clear evidence of an electronic inputs. This is clear evidence of an export slowdown in the near future.export slowdown in the near future.

Philippine Globalization in the New Millennium IDEAs Conference on A Decade After: Recovery and Adjustment since the East Asian Crisis 12-14 July 2007.

Documents

bpo sector threats

bpo sector overview

bpo workers

center subsector

new jobs

global bpo industry

sole dynamic sector

total bpo revenues