Transcript Makati Sports Club

PRESIDENT'S REPORT
Positioning Philippine Exports
in the Global Map
SERGIO R. ORTIZ-LUIS, JR.
President - PHILEXPORT
2nd General Membership Meeting
July 2, 2009  1:30 – 5:30p.m.
Makati Sports Club
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Export industry - hardest hit
segment of the domestic
economy by the lingering
global economic crisis.
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Most industries suffered
double-digit declines – food
and furniture.
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Exports contracted by 2.86%
last year. But turned out to be
only the beginning.
The full impact of the global
trade slowdown came to us in
the first half of this year.
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Major exports are beginning
to recover, with new orders
trickling back.
This, coupled with the perking
up of consumer spending in
the US, could mean - the
WORST IS OVER.
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Latest forecast made by the
Export Development Council
is that, counting out services
exports, our sector will most
likely retreat by 16% for the
whole of this year.
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The best economists led by
noble laureate Paul Krugman,
see a slow, painful recovery
for the highly industrialized
economies that are now under
recession.
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Economic managers say that
the crisis would not affect us
as badly as our neighbors
that are very dependent on
exports like Singapore,
Thailand, Malaysia, Japan and
South Korea.
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Exports made up close to half
of the GDP during the boom
years.
Exports share in the GDP
47% in 2006; retreated to 43%
in 2007 and declined 38% last
year.
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If services export are counted
in like the BPO industry and
OFWs, the combined share of
the productive economy
exceeds 60%, with OFW
money estimated by foreign
chambers to contribute 12%
of the yearly GDP.
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If circumstances beyond ours
and government’s control,
crush dollar earnings from
exports and OFWs, the whole
economy will suffer an
economic catastrophe of
national proportions.
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We could not, and we
must not, make this worst
scenario happen.
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Prospects of a gradual global
recovery prompted your
leadership to look beyond the
present crisis, search for new
opportunities, plan and
implement programs that are
more lasting.
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Theme:
Moving Forward:
Identifying and Riding
on Post-Crisis Opportunities
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PHILEXPORT’s role, from
frontline services to advocacy:
Prying open new markets
and expanding existing ones.
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Advocacy Work:
 Passage into law of the
Export Development Act
of 1994 in preparation to
our accession to the
World Trade Organization
the following year.
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Under the Act:
 EDC was institutionalized
 PHILEXPORT played a frontline
role in the formation of another
institution, the National
Competitiveness Council.
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The EDC and the NCC have
assumed much of the reform
advocacies PHILEXPORT had
borne on its shoulders in the
past decade.
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The need to upgrade and match
educational training with the
needs of the productive
economy, making local
governments more businessfriendly and bringing down
business costs.
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High-impact achievement -grant of the P1 billion Export
Support Fund or ESF that has
supplanted the initial P280M
Export Promotions Fund put
together in late 2007 and spent
in projects last year.
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It is now called ESF because
the scope of projects is no
longer limited to export
promotions. It now includes
development projects:
 fish laboratory facility of tuna industry in
GenSan
 other industry-wide common facilities –
furniture design center in Cebu
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The new funding, with a first
tranche of P200 million, has
been released to DTI and must
be spent soonest.
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All committees have been
constituted. PHILEXPORT
trustees are committee
members and now are
evaluating project proposals;
Approving committee hopes to
approved the first projects
under the new ESF before the
end of this week.
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70% of the P1 billion will be
plowed into projects of
exporting groups composed
mainly of SMEs.
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30% will be used by the big
groups, particularly the
electronics, BPO and IT
industries for a high-profile
international investment
promotions campaign for new
locators.
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We expect that direct
government grants for the ESF
will continue to come while
PGMA is in Malacanang,
although we have advocated
for a more sustainable
government support.
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We do have funding support
for long-nurtured, strategic
projects that need to be put
immediately on the ground.
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We are already finding ways
of making the present
export slump as a blessing
to our collective future.
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Our export facilitation service
has been moving at full speed:
Electronic linkages between
our OSEDC in Manila to the
Bureau of Customs is
presently under test
operations
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Similar interconnection will
soon follow in other one-stop
centers in Subic, Clark, Cebu
and the rest of the major
exporting regions with similar
facilities, may get linked to
the BOC later this year.
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We expect a major jump in trade
facilitation reform also this year
with the Senate approval of the
accession documents to the
Revised Kyoto Convention, the
global blueprint for simplified
and harmonized customs
administration practices.
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Legislative reforms to facilitate
trade, complement our lowprofile activities:
buyer-seller matching
travel tax exemption
visa-free APEC business
cards
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We have strived to help build
the capabilities of our affiliates,
regional chapters with some
funding support.
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Our tie-up with the CBI, the
capability building is more
direct to pre-screened
exporters that are helped in
breaking into the European
market. This, we have been
doing for about seventeen
years.
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We can do much more in
systematizing capability
building initiatives of chapters
and industry association with
proper allocation of the P1
billion ESF that we must
commit to projects this year.
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We have intensified our
information gathering and
dissemination of urgent
information that they need to
know through e-mail and the
mainstream media.
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These are Market and Policy
Advisories, in addition to the
weekly PHILEXPORT News
and Features (PNF).
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PHILEXPORT look for ways to
further deepen our capabilities
to get market and competitor
information that we find very
important.
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Highly-developed countries –
like EU and US may be tempted
to put up more non-tariff
barriers to trade:
 mandatatory pre-testing of food products;
 Fish catch traceability – EU
 Wood supply traceability for furniture
export to US
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This is another area we need to
help partners in government,
particularly our commercial
attaches.
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Our information gathering
and dissemination arms must
now link up more closely and
work as a team.
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Commercial attaches have
easier access to the most
recent trade info that our
exporters and policy-makers
may require, while our team
has direct access to the
exporters.
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We can do a lot more in the
service of our constituents if
the two set up regular, twoway communications.
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It is not the end of our
voyage.
You are all here because we
are still looking for solutions
and have not given up.
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Hope is alive that we can survive
through the recovery stage.
The seas are stormy now, the
sailing tough. But sooner or
later, we will reach calm waters
and call port to safely unload our
cargoes.
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It has happened before;
it will happen again
in this crisis.
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Mabuhay!!!
And may we all have a
fruitful afternoon.