GCSR on
Philippines Country
As partial fulfillment of
Master in Business Administration
By
Narmada College of Management, Bharuch
Year 2012
PART – I
General Overview of PHILIPPINES
INTRODUCTION OF PHILIPPINES
The Philippines is located in Southeast Asia. It is an archipelagic nation of more
than 7,100 islands and islets. It is surrounded by three bodies of water. On the
east, it is bounded by the Philippine Sea; on the south, it is bounded by the
Celebes Sea; and on the west and north, it is bounded by the South China Sea.
The Economy of the Philippines is the 46th largest in the world, Gross domestic
product of Philippines anticipated $200 doller in 2011
• Primary exports of Philippines include semiconductors and electronic
products, transport equipment, garments, copper products, petroleum
products, coconut oil, and fruits.
• Major trade partners include the United States, Japan, China, Singapore,
South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and Thailand.
• A newly urbanized country, the Philippine economy has been transitioning
from one based on agriculture to one based more on services and
manufacturing. The Goldman Sachs includes the country in its list of the Next
Eleven economies.
• The national language of the Philippines is Filipino, although the official
languages are Filipino and English. These official languages are also the
media of instruction in schools.
1.1 DEMOGRAPHIC INFORMATION OF PHILIPPINES:
• Population in phillipins is 101,833,938 (July 2011 est.) Age structure is 0-
14;years: 34.6% (male 17,999,279/female 17,285,040) ;15-64 years: 61.1%
(male 31,103,967/female 31,097,203) ;65 years and over: 4.3% (male
1,876,805/female 2,471,644) (2011 est.
• Median ageTotal: 22.9 years; Male: 22.4 years ;Female: 23.4 years (2011 est.)
• Population growth rate is1.903% (2011 est.) Birth rate is 25.34 births/1,000
population (2011 est.).Death rate is 5.02 deaths/1,000 population (July 2011
est.)
• Urbanization is Urban population: 49% of total population (2010) Rate of
urbanization: 2.3% annual rate of change (2010-15 est.)
• Sex ratio is,
At birth: 1.05 male(s)/female
under 15 years: 1.04 male(s)/female
15-64 years: 1 male(s)/female
65 years and over: 0.76 male(s)/female
Total population: 1 male(s)/female (2011 est.)
• Nationality in phillipines is Noun: Filipino(s) adjective: Philippine
• Ethnic groups in 2000 census at phillipines is Tagalog 28.1%, Cebuano 13.1%,
Ilocano 9%, Bisaya/Binisaya 7.6%, Hiligaynon Ilonggo 7.5%, Bikol 6%, Waray
3.4%, other 25.3%
• Religions in phillipines is Roman Catholic 80.9%, Muslim 5%, Evangelical 2.8%,
Iglesia ni Kristo 2.3%, Aglipayan 2%, other Christian 4.5%, other 1.8%,
unspecified 0.6%, none 0.1% (2000 census)
• Languages used in phillipines is Filipino (official; based on Tagalog) and
English (official); eight major languages are - Tagalog, Cebuano, Ilocano,
Hiligaynon or Ilonggo, Bicol, Waray, Pampango, and Pangasinan
• Literacy in phillipines is,
Definition: age 15 and over can read and write
total population: 92.6%
male: 92.5%
female: 92.7% (2000 census)
• 175 individual languages in the Philippines, 171 of which are living languages
while 4 no longer have any known speakers.
• Filipino and English are the official languages.
• Both Filipino and English are used in government, education, print, broadcast
media, and business.
1.2 Economic & industry overview of Philippines
Country economic background
Philippine GDP grew 7.3% in 2010, spurred by consumer demand, a rebound in
exports and investments, and election-related spending. The economy weathered
the 2008-09 global recessions better than its regional peers due to minimal exposure
to troubled international securities, lower dependence on exports, relatively resilient
domestic consumption, large remittances from four- to five-million overseas Filipino
workers, and a growing business process outsourcing industry.
Economic growth in the Philippines averaged 4.5% during the MACAPAGAL-
ARROYO administration. Despite this growth, poverty worsened, because of a high
population growth rate and inequitable distribution of income. The AQUINO
administration is working to reduce the government deficit from 3.9% of GDP, when
it took office, to 2% of GDP by 2013.
The government has had little difficulty issuing debt both locally and internationally to
finance the deficits. AQUINO's first budget emphasizes education, health, conditional
cash transfers for the poor, and other social spending programs, relying on the
private sector to finance important infrastructure projects. Weak tax collection,
exacerbated by new tax breaks and incentives, has limited the government's ability
to address major challenges. The AQUINO administration has vowed to focus on
improving tax collection efficiency - rather than imposing new taxes - as a part of its
good governance platform.
Economic Indicators GDP (USD million) 2006 1/ 117
GDP growth (annual %) 1/ 562
2000 6.0
2006 5.4
Sectoral distribution of GDP 2006 1/
% agriculture 14
% industry 32
% manufacturing 23
% services 54
General government final consumption expenditure (as % of GDP) 10
Household final consumption expenditure, etc. (as % of GDP) 77
Total expenditure (% of GDP) 2006 1/ n/a
Total external debt (USD million) 2006 1/ 60
Present value of debt (as % of GNI) 2006 1/ 57
Total debt service (% of GNI) 2006 1/ 11
Lending interest rate (%) 2006 1/ 10
Deposit interest rate (%) 2006 1/ 5
Current economic structure and growth The Philippines did not experience consistent double-digit growth in the same
manner as the other Asian tiger countries, but its economic performance since 2001
has been respectable. Growth from 2001-2007 has averaged 5.5 per cent, which is
about the same average growth as Thailand and Indonesia, although much less than
fast-growing Viet Nam. In 2007, it posted its highest growth rate of 7.8 per cent.
Much of the Philippine economy’s growth has come from the services sector. The
share of manufacturing has been declining, compared to those of other Asian
countries, while the share of services is comparably higher. Well-known major dollar
earners are the overseas Filipino workers, who pumped more than US$14 billion in
remitt ances into the economy in 2007, and outsourced business processes (BPOs).
INDUSTRIES OVERVIEW OF PHILIPPINES:
Agriculture:
Traditionally employing nearly 38 percent of the labor force while accounting
for barely a fifth of GDP, Philippine agriculture is considered to be inefficient.
Not been able to cope with the growing food demand. The Philippines formally
joined the WTO in 1995, the year the country became a net food importer.
The Philippines has a relatively open trading system and has some of the
lowest applied tariffs in the region in agriculture.
Important trading partners are U.S, Japan, Korea and the ASEAN-member
countries in agriculture sector. Poor acceptance is because of the
liberalization indirect by the commitments was supposed as too fast and
further than the country’s capacity to comply.
In this agriculture it has some sub sectors which follows by agriculture industry:
INCREASED YIELD OF PLANTS Biotechnology provides the opportunity for researchers to improve plant growth,
development, and yield by providing for the basic needs of the plant such as
biofertilizers and biocontrol agents.
LIVESTOCK Tremendous opportunities are available for live-stock biotechnology, including the
production of vaccines for foot and mouth disease and hemorrhagic septicemia, for
diagnostics, and in vitro fertilization.
Fishery: Fisheries products while negative trade balance prevails in other land based
production system such as agriculture and forestry.
Forestry Sector: The optimal area of forest for the Philippines is believed to be about 12 million
hectares, or 40% of the land area. Private sector plantations will focus on timber
production. The National Forestation Programme (NFP) aims to reforest 100,000ha
each year. JOINT R&D COLLABORATION Collaboration between Philippine and overseas researchers is one opportunity that is
now well in place. Many researchers actively collaborate with researchers from
Australia, Canada, USA, Japan, South Korea, and countries of the European Union.
The above challenges, opportunities, and constraints at the international level and by
national R&D centers at a country level, with harmonized activities at international,
regional and country levels. For developing countries, the small farmers and fisher
folks should be the main beneficiaries of biotechnology R&D. Biotechnology will only
prosper if the private sector actively participates in the R&D aspect as well as in the
commercialization stage.
Education Sector
There are three government organizations handle education in the Philippines.
These are the Department of Education, Culture, and Sports (DECS), the
Commission on Higher Education (CHED) and the Technical Education and Skills
Development Authority (TESDA).
Develop the high-level professions that will provide leadership for the nation,
advance knowledge through research, and apply new knowledge for improving the
quality of human life.
The mission of this is to provide quality basic education that is fairly accessible to all
and lays the foundation for life-long learning and service for the common good. It
inspects all basic education institutions, both public and private, establishment and
maintenance of a whole, sufficient and included system of education relevant to the
goals of national development.
(CHED) is self-governing and part from the DepEd. The hire is responsible for
formulating and implementing policies, plans and programmes for the development
and well-organized operation of the system of higher education in the country.
Health Care:
The services of medical professionals, including medical and dental professionals,
midwives, nurses, physiotherapists and paramedical personnel; and Health services,
covering hospital services (including psychiatric hospitals) and the services of
medical laboratories, ambulances, and residential health care other than hospitals.14
This huge consumption value has attracted multinational corporations to engage in
the production and supply of various healthcare goods and services in the Asian
market.
Health care tools and services generally include company and entity that offer
medical tool, medical supplies, and health care services like hospitals, home health
care providers, and nursing homes.
The second industry group pharmaceuticals, biotechnology & linked life sciences
comprise sectors companies that construct biotechnology, pharmaceuticals, and
various scientific services related to health & life.
NATURAL RESOURCES
The Philippines is rich in natural resources. It has fertile, arable lands, diverse flora
and fauna, extensive coastlines, and rich mineral deposits.
In Philippines basically following natural resources are used.
1) Water resources
2) Forest resources
a. Bamboo
b. Mangrove forest
3) Marine industry
4) Mining Industry
a. Mineral resources
5) Oil and gas industry
Automotive
The ABS used in Mercedes-Benz, BMW, and Volvo cars are made in the Philippines.
Ford, Toyota, Mitsubishi, Nissan and Honda are the most prominent automakers
developed cars in the country. Kia and Suzuki produce small cars in the country.
Isuzu also produces SUVs in the country. Honda and Suzuki produce motorcycles in
the country
Electronics
Intel has been in the Philippines for 28 years as a major creator of products including
the Pentium 4 processor. A Texas Instruments plant in Baguio has been in service
for 20 years and is the largest creator of DSP chips in the world.
FINANCIAL SECTOR
Financial sector considers a various investment in Philippines. In that it includes
indo- Phil textiles, Bio-seed Research, Chemical plant, Pharma Company, etc.
J.V. Merida Ecological Industries: This joint venture was set up in 2001 in Bangalore,
India, for processing of waste. Ayala Group teamed up with L&T for consultancy for
construction of the Howrah road bridge. Ayala Group’s BPO Company, LiveIT
Solutions Inc., has acquired majority shareholding in Integrand Managed Solutions
Inc. which has operations in the USA and India.
Infrastructure Sector In Philippines
During 1990s, the Government of the Philippines started facing a problem of
declining financial resources in comparison with the rising demand for more
infrastructure services.
The quantity and quality of the country’s infrastructure have mostly failed to keep
pace with the increasing demands of the population.
• Power: In terms of electricity, the country performs quite adequately. The
scenario has improved to a great extent. But still, in Philippines main problem
is quality of service.
• Telecommunications Access to the fixed telephone lines is very low in the
country although this is reduced by the substantially greater level of access to
mobiles.
• BPO industry BPO is the biggest motivating factor behind the country’s
growing services. As of the year 2010, the country has bitten India as the
world leader in business support functions, as per the IBM Global Location
Trends Annual Report.
• Roads Philippines enjoy a favorable position in terms of the road density at
2.5 Kms/1000 people in 2001. However, the national data does not properly
point to the huge regional variations in road density in the nation. Metro
Manila position at the lowest in terms of kms per population with 0.5 km /1000
people.
1.3 General Overview of Trade and Commerce Trade structure
The Philippines is part of the electronics production network in Asia, which explains
why electronic products are among its top exports and imports. In 2007, electronic
exports represented 62 per cent of total exports and 45 per cent of total imports.
Garments occupy a distant second place with less than 5 per cent, or slightly over
two billion dollars exports, while woodcraft s and furniture is in fi ft h place with more
than one billion dollar in sales. Together, the top ten exports account for almost 80
per cent of the total value of Philippine exports. It is interesting to note that the
combined top ten exports, excluding semiconductors, is worth close to US$9 billion
in 2007, but this sum is significantly dwarfed by remittances of US$14 billion from
overseas Filipino workers.
Most of the Philippine’s exports are in manufactures. Coconut and bananas are the
only agriculture exports that made it in the top ten. Total agriculture export constitute
only a meagre 5.4 per cent to total exports (as of 2005), but it is noteworthy that its
growth outpaced that of non-agriculture exports (35 per cent versus 7 per cent
between 2000 and 2005). The majority of the country’s imports are raw materials
and intermediate goods, comprising 66 per cent of total imports. Of this, electronics
or semiconductor inputs take up 45 per cent of total imports, while fuel and lubricants
accounted for 17 per cent of imports. The Philippines is a net importing country.
However, the rapid appreciation of the currency in 2007 due to strong foreign
remittances from overseas workers caused exports to falter. The United States and
Japan are the Philippines’ top trading partners. But China’s increasing role in
Philippine trade is highly noticeable. From being ranked 12th, with 1.7 per cent of
total Philippine exports in 2000, it rose to fourth place taking 11.4 per cent of exports
in 2007. Similarly, in terms of imports, China ranked 12th in 2000 but became 5th in
2007. The Philippines also had the second biggest trade surplus with China of
approximately 1.7 billion US dollars in 2007, next only to its surplus with Hong Kong
(China). In contrast, the Philippines has a huge bilateral deficit with its top trading
partner, the United States. Interestingly, 78 per cent of Philippine exports to China
are electronic products and 39 per cent of Philippine imports from China is likewise
in electronics, implying that China is also part of the global production network in the
electronics industry.
As of 2007, under the ASEAN Harmonized Tariff Nomenclature (AHTN), the
Philippines had a total of 11,490 tariff lines. Half of these had rates ranging from 0-3
per cent tariff , another 27 per cent ranged between 5-10 per cent, and the rest for
15 per cent tariff s and above. Overall, average tariff stands at 7.82 per cent. But
average tariff s for agriculture, fishery and forestry are 11.82 per cent, while that for
manufacturing is 7.82 per cent. The tariff s for the agriculture sector range from 0-65
per cent, 1-5 per cent in mining, and 0-30 per cent in manufacturing.
The remaining 46 lines, which include rice, have not yet been placed under the
normal AFTA track. With regard to preferential trade agreements, the Philippines is
part of the ASEAN Free Trade Area (AFTA). Under the regional grouping of ASEAN,
it has also signed regional trade agreements with China, the Republic of Korea,
Japan, India, Australia and New Zealand, while another ASEAN regional trade
agreement is currently being negotiated with the European Union. Besides these
regional agreements, the Philippines also has a bilateral trade agreement with Japan
which was approved by the Senate in September 2008.
The most important provisions of the 1987 Philippine Constitution which pertain to
the framing of Philippine foreign policy are as follows:
Article II, Section 2: "The Philippines renounces war as an instrument of national
policy, adopts the generally accepted principles of international law as part of the law
of the land and adheres to the policy of peace, equality, justice."
Article II, Section 7: "The State shall pursue an independent foreign policy. In its
relations with other states the paramount consideration shall be national sovereignty,
territorial integrity, national interest, and the right to self-determination."
Republic Act No. 7157, otherwise known as "Philippine Foreign Service Act of 1991",
gives mandate to the Department of Foreign Affairs to implement the three (3) pillars
of the Philippine Foreign Policy, as follows:
1. Preservation and enhancement of national security
2. Promotion and attainment of economic security
3. Protection of the rights and promotion of the welfare and interest of Filipinos
overseas.
These pillars overlap and cannot be considered apart from each other. Together with
the eight (8) foreign policy realities outlined by the President, they reinforce each
other and must be addressed as one whole.
These eight foreign policy realities are:
China, Japan and the United States and their relationship will be a
determining influence in the security situation and economic evolution of East
Asia;
Philippine foreign policy decisions have to be made in the context of ASEAN;
The international Islamic community will continue to be important for the
Philippines;
The coming years will see the growing importance of multilateral and inter-
regional organizations to promote common interests;
As an archipelagic state, the defense of the nation's sovereignty and the
protection of its environment and natural resources can be carried out only to
the extent that it asserts its rights over the maritime territory and gets others to
respect those rights;
The country's economic policy will continue to be friendly to both domestic
and foreign direct investments;
The Philippines can benefit most quickly from international tourism
Overseas Filipinos will continue to be recognized for their critical role in the
country's economic and social stability.
1.4 Overview of Major Economic Sectors of Philippines In Philippines there are major three sectors as follows; among them the service
sector is growing faster than other two sectors. In 1999 GDP growth rate is 3.2%
because of industries the rate of industrial growth is only 0.5%.
Agriculture
Agriculture, which employs the majority of the poor and is intensive in the
employment of unskilled labor, has grown more slowly than other sectors. Its overall
contribution to total GDP growth was only around 13 percent over 1997-07 — the
same as the transport & communications sector, which accounts for a much smaller
share of GDP. As a result, the share of agriculture in GDP fell from 19 to 14 percent
over the last 10 years. Although agriculture continues to play a significant role as the
most employment-intensive sector, its employment generation record in recent years
has been disappointing. Agriculture sector contribute 14.2% in GDP of country, this
sector is showing continuously declined trend. The major reasons for such decline
are lower rate of productivity, lack in infrastructure, problem to achieve economic of
scale. So the contribution is lower compare to other two sectors.
The agriculture products are Rice, Mango pork, Eggs, Aquaculture, Corn, Banana,
Pineapple, Coconut Products Etc. This sector is showing continuously declined
trend. The major reasons for such decline are lower rate of productivity, lack in
infrastructure, problem to achieve economic of scale
.
Industries
Industries contribute 32.1% to country GDP. This sector is concentrated major in
processing and assembling of various consumer products. Like Rubber products,
Footwear & clothing , Textiles Tobacco, Pharma products, Plywood, Paper & its
products, Electronics, Cement, Chemicals, Fertilizers, Iron, Steel, Glass, Petroleum
products. This sector is concentrated majorly in processing and assembling of
various consumer products.
Services
This sector in Philippines is shown growth over the past years. This sector
contributes around 53.7% to the GDP. And also provide higher rate of employment.
Around 49% workforce is to be employed by this sector.Provide higher rate of
employment. Around 49% workforce is to be employed by this sector.
1.5 LEGAL ASPECT OF TRADE IN PHILLIPINES
The current era of globalization, characterized by liberal trade regimes followed by
most countries, has positively impacted on bilateral relations. Trade has also been
growing. It has reached US$ 1.3 billion by now. As per the latest trade figures for FY
2010-11, the total growth rate is 23.57% at the total value of US$ 1,312.13 million
with India’s exports at US$ 882.74 million registering a growth rate of 17.89% and
imports at US$ 429.39 million registering a growth rate of 37.15%. Required
agreements / MoUs for facilitation of economic and commercial relations such as
avoidance of double taxation and prevention of fiscal evasion, agreement for
promotion and protection of investments, MOU for cooperation in the field of
Agriculture and related fields have been signed. The
India – Philippines Joint Working Group (JWG) on Trade and Economic Relations
has been meeting regularly under the joint chairmanship of Commerce Secretary
and Philippines Undersecretary for Trade and Industry.
The last (Tenth) JWG Meeting was held in New Delhi on 21-22 November 2008.
The first meeting of the Joint Working Group on Agriculture took place in New
Delhi in August 2008; the second JWG on the same subject is expected to take
place in Manila in the near future. The first meeting of the Joint Working Group on
Tourism took place in Manila in July 2008. The Philippines Airlines have started
direct flights between Manila and New Delhi since March, 2011. To facilitate faster
growth of tourism and people-to-people contacts, Prime Minister announced at the
Hanoi India-ASEAN Summit on 30 October, 2010 the tourist visa-on-arrival facility for
the citizens of the Philippines with effect from 1 January, 2011. The First Meeting of
the India-Philippines Joint Working Group (JWG) on Health and Medicine was held
on 18-19 October 2011 at Manila.
Relations with the United States remain of major importance to the Philippines. The
US is the largest bilateral trading partner and source of foreign investment. Although
the US no longer has a permanent military presence in the Philippines, there are
annual joint exercises and the US provides support for Philippine counter-terrorism
efforts.
China is also increasingly important as both a trading partner and a source of
development assistance. There is an established and wealthy Chinese-Filipino
community in the Philippines that predates the first Spanish settlement. Chinese
interest is welcomed as a counterbalance to US influence. Tensions remain however
over the Spratly Islands, where the two countries have competing territorial claims.
The Philippines was a founder member of the ASEAN in the year of 1967. It remains
actively engaged with this and other international organizations such as the UN,
where it is a member of the G77 group of developing nations. Current international
negotiations of particular concern include the WTO Doha Development round and
the UNFCCC climate change negotiations.
The President “Nuclear Non-Proliferation Treaty Review Conference” which was held
in May 2010 was Ambassador Cabatulan from the Philippines. He won praise for his
work to ensure a successful and balanced outcome.
Ensuring the safety and wellbeing of Overseas Filipino Workers (OFWs) is a key
foreign policy concern. Over 1 million Filipinos leave the country each year for short-
term contracts abroad, primarily in North America and the Middle East. There are
currently approximately 250,000 Filipinos living in the UK.
International trade in Philippines is regulated by many government agencies.
Following are the examples of few agreements of trade:
MOST FAVOURED NATION STATUS
THE GENERALIZED SYSTEM OF PREFERENCES (GSP)
GATT
ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN)
Preferential Trade Agreement (PTA)
ASEAN Free Trade Area (AFTA)
ASEAN Industrial Complementation Agreement
ASEAN External relations
1.6 Present trade relation with india
Year 2005-06 2006-07 2007-08 2008-09 2009-10
Export 494.66 580.98 620.32 743.77 748.77
Import 235.49 166.79 204.54 254.77 313.07
Total trade 730.16 747.77 824.87 998.54 1061.84
India and the Philippines signed a Trade Agreement in 1979. Growth of bilateral
trade between the two countries had been slow till the late 90s, but has picked up in
the last few years. Balance of trade has been heavily in favour of India. Trade
however still remains below its potential. However, the visits by the Indian President
(February 2006) and then the Indian PM (January 2007) to the Philippines and later
by the Philippines President to India (October 2007), have acted as a stimulus to
bilateral trade and investment links. Presently (2009-10) bilateral trade between India
and the Philippines is US$ 1061.84 million of which US$ 748.77 million forms Indian
exports to the Philippines and US$ 313.07 million is the component of India’s imports
from the Philippines (Source: Department of Commerce, Government of India).
Major items of Indian exports are: Frozen buffalo meat (12.24%); iron and steel
(9.53%); vehicles (8.21%); oil seeds and olea etc (8.05%).; rubber and articles
thereof (6.85%); pharmaceutical products (6.56%); electrical & electronic machinery
(6.20%); organic chemicals (3.91%) etc.
The percentages shown in brackets is the share of the item to the total value of
exports from India in the year 2009-10
Major imports from Philippines are: electrical and electronic machinery and
equipment (41.52%); mineral fuels and mineral oils (14.77%); newsprint paper and
paperboard (10.10%); vehicles (6.99%); optical instruments (3.18%); etc.
The percentages shown in brackets is the share of the item to the total value of
imports by India in the year 2009-10
Trade Statistics
In 2009, India position was 18th as PH trading partner, 22nd as export marketplace,
and 18th as import provider of the Philippines. Philippine exports to India improved
from US$ 200.3 mn value of goods in 2009 from US$ 193.35 mn in 2008.
Philippine imports on the other hand, decrease in 2009 to US$ 502.3 mn from US$
615.1 mn in 2008. As of November 2010, whole trade reached US$ 865.12 mn,
which is short US$ 135 mn short of the bilateral goal of US$ 1 bn in total trade for 2
countries.
Exports (Billion $)
Country 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010
Philippines 34.8 38 37 35.1 34.56 38.63 41.25 47.2 48.2 37.51 50.72
Imports (Billion $)
Country 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010
Philippines 30.7 35 30 33.5 35.97 37.5 42.66 51.6 60.78 46.39 59.9
PRESENT TRADE RELATION OF INDIA AND PHILIPINES
INDIA’S EXPORT TO PHILIPPINES
PRODUCT 2010-11
Meat & Edible Meat 109.78
Oil seed 33.74
Residues & waste from food 38.33
Mineral fuels 25.53
Pharmaceutical products 36.38
Rubber and articles thereof 46.75
Iron and steel 64.40
Nuclear reactors and boilers 41.00
Electrical machinery & equipment parts 35.90
Vehicle parts 66.18
PHILIPPINES EXPORT TO INDIA
PRODUCT 2008-09
Animal veg fats 11.20
Mineral fuels, oils 47.82
Organic chemicals 4.58
Chemical products 4.20
Paper & paper board 23.32
Iron and steel 15.37
Nuclear reactors and boilers & machinery 15.86
Electrical machinery equipment parts 28.95
Vehicle parts 18.50
Optical, photos, cine parts 7.42
As the trade pact was becoming functioning with the country , the contract signed
with the Association of Southeast Asian Nations (Asean) community in 2009 has
now become efficient with the nine member countries of the ASEAN. When the pact
was signed between ASEAN and India, New Delhi had to independently inform with
each of the south east Asian nations.
From the time it achieved independence in 1947 until the early 1990s, India
maintained rigid control over exports and imports of both non-agricultural and
agricultural merchandise, making it one of the most blocked economies in the world.
India’s bound agricultural tariffs are among the highest tariffs in the world, where
applied tariffs for many products are set well lower bound rates. India’s policy has
been adjusted the applied tariffs from time to time to help meet domestic price
permanence goals. In 2009 and 2010, India reduced tariffs for a number of major
commodities—in a number of cases to zero—to help limit inflationary pressures and
reasonable the impact of high world prices in the home market.
EARLY IMPORT ACTIVITIES OF PHILIPPINES
• Rice imports are the source of national shame.
• Reasons:
– Conversion of rice land to other uses
– Backward rice farmers
– Deteriorating irrigation systems
– less arable land and more varied landscapes
– absence of river deltas
– Numerous typhoons which makes the production of rice more risky and
difficult.
ACCORDING TO 2010 STATISTICS
Agriculture products: There are cassavas, mangoes ,eggs, beef, fish pork,
sugarcane, coconut, rice, corn and bananas.
Industries: Electronics assembly, garments, footwear, pharmaceuticals,
chemicals, wood products, food processing, petroleum refining, fishing.
Industrial growth rate: 7%
Electricity exports: 0 kWh
Electricity imports: 0 kWh
Oil exports: 34,900 bbl/day
Natural gas exports: 0 cu m
Natural gas imports: 0 cu m
Exports: $48.38 billion
Export commodities: Semiconductors and electronic products, transport
equipment, garments, copper products, petroleum products, coconut oil, fruits.
Export partners: US-18.3%, Japan-16.5%, Netherlands-10.1%, china-9.8%,
Hongkong-7.8%, Singapore-7.3%, Malaysia-5.6%, Taiwan-4.3%
Imports: $53.96 billion
Import commodities: machinery and transport equipment, Electronic
products, mineral fuels, iron and steel, textile fabrics, grains, chemicals and
plastics
Import partners: US-16.3%, %, Japan-13.6%, China-7.1%, Hongkong-4%,
Singapore-8.5%, Malaysia-4.1%, Taiwan-8%, Thailand-4.1%, South Korea-
6.2%, Saudi Arabia-5.8%
Stock of FDI (at home)- $16.02 billion
Stock of FDI (abroad)- $2.131 billion
Currency (code): Philippine peso (PHP)
1.7 Present Trade Relations and Business Volume of different products with India
The economy is exhibiting a slow but steady structural transformation, broadly in line
with international development experience. The service sector—which includes
transport and communications, finance, private services, business process
outsourcing, other information technology, and commerce—has been a leader; its
share of GDP rose from 53.1 percent to 53.7 percent in the past five years (to 2006).
Over the same period, industry’s share of GDP rose marginally, from 31.8 to 32.1
percent. Agriculture has been the lagging sector, with a GDP share that declined by
nearly a full percentage point, from 15.1 to 14.2 percent.
The economic structure in 2006 is very similar to the median for LMI countries
globally. For that benchmark group, the corresponding figures are a 53.7 percent
share of GDP for services; 31.7 percent for industry, and 12.0 percent for agriculture.
But the service sector accounts for a much larger share of GDP in the Philippines
(53.7 percent) than in Indonesia (45.3 percent) or Thailand (43.5 percent). As for
agriculture, the GDP share in the Philippines is virtually the same as in Indonesia
(14.0 percent), but considerably higher than in Thailand (9.6 percent).
These differences in economic structure are important because labor productivity is
particularly high in manufacturing and very low in agriculture. In 2006, only 14.8
percent of the labor force was engaged in industry yet produced close to one-third of
the economy’s output. In comparison, 36.7 percent of the labor force is engaged in
agriculture yet produces just 14.2 percent of GDP. This means that each job in
industry produces nearly six times as much as each job in agriculture. In the service
sector, average productivity is nearly three times higher than in agriculture, but
barely half the level attained in industry.
Potential Areas Synergy
• Pharmaceuticals
• Steel
• Textiles
• Motorcycles and Auto-Parts
• Mining and Infrastructure
• Dairy and other Agro-Based Industry
• CNG For Public Transport
• Bio-and Thermal Energy
• Space And Defense- Related Industries
• Construction
• Meet Processing
• Environmental Energy
• Coal
India’s Trade with ASEAN Member Countries
Value in US$ Million
Latest Trade figure for the ASEAN Country 2008-09 2009-10 2010-11(P) Exports Import
s Total Trade
Exports
Imports
Total Trade
Exports
Imports
Total Trade
Brunei 17.64 397.52
415.16
24.43 428.65
453.08
10.65 85.87 96.52
Cambodia
46.9 2.72 49.62 45.54 5.05 50.59 28.08 3.35 31.43
Indonesia
2559.82
6666.34
9226.16
3059.52
8551.62
11611.14
2242.07
4301.66
6543.73
Lao PDR
9 0.53 9.53 16.93 20.05 36.98 2.39 0.13 2.52
Malaysia 3419.97
7184.78
10604.75
2835.38
5176.24
8011.62
1989.96
2929.93
4919.89
Myanmar
221.64
928.97
1150.61
207.97
1289.35
1497.32
129.87 610.72
740.59
Philippines
743.77
254.77
998.54
748.71
312.71
1061.42
371.47 204.96
576.43
Singapore
8444.93
7654.86
16099.79
7568.29
6163.91
13732.2
4643.38
3488.34
8131.72
Thailand 1938.31
2703.82
4642.13
1740.1
2930.13
4670.23
1088.47
1976.11
3064.58
Vietnam 1738.65
408.66
2147.31
1838.87
521.8 2360.67
1102.12
449.72
1551.84
ASEAN 19140.63
26202.97
45343.6
18085.74
25399.51
43485.25
11608.47
14050.8
25659.27
India's total Trade
185295.36
303696.31
488991.67
178662.17
286822.8
465484.94
105351.89
161449.28
266801.17
Trade with
ASEAN as %age
of total
10.33%
8.63%
9.27% 10.12%
8.86% 9.34% 11.02%
8.70% 9.62%
1.8 PESTEL ANALYSIS
Political environment The Philippines, compared to other countries, has a multi-party system where
plurality in political participation is encouraged. The Constitution also provides for a
party-list system, which is defined in the Party-list Act as “a mechanism of
proportional representation in the election of representatives in the House of
Representatives from national, regional and sectoral parties or organizations or
coalitions registered with the Commission on Elections (COMELECThe following are
some of the guidelines followed by the COMELEC and by political parties during the
election period:
• Parties must be furnished with a copy of COMELEC directives and orders pursuant
to the provisions of the Omnibus Election Code.
• The COMELEC and all parties shall each have a representative in the Board of
Election Inspector in every precinct and in the Board of Canvassers.
• All parties can assign watchers to every polling place.
• Parties may hold party conventions or meetings to nominate their official
candidates 30 days before the campaign period; for the presidential and vice-
presidential candidates, it must be done 45 days prior to the campaign period.
The role of political parties, especially in the Philippines, is central to the growth of
democracy. A good partnership between civil society and political parties is an
important prerequisite for this growth of democracy in the whole country and even
within political parties.
Economic environment The economy is exhibiting a slow but steady structural transformation, broadly in line
with international development experience. The service sector—which includes
transport and communications, finance, private services, business process
outsourcing, other information technology, and commerce—has been a leader; its
share of GDP rose from 53.1 percent to 53.7 percent in the past five years (to 2006).
Over the same period, industry’s share of GDP rose marginally, from 31.8 to 32.1
percent. Agriculture has been the lagging sector, with a GDP share that declined by
nearly a full percentage point, from 15.1 to 14.2 percent.
These differences in economic structure are important because labor productivity is
particularly high in manufacturing and very low in agriculture. In 2006, only 14.8
percent of the labor force was engaged in industry yet produced close to one-third of
the economy’s output. In comparison, 36.7 percent of the labor force is engaged in
agriculture yet produces just 14.2 percent of GDP. This means that each job in
industry produces nearly six times as much as each job in agriculture. In the service
sector, average productivity is nearly three times higher than in agriculture, but
barely half the level attained in industry.
Social environment
The Filipino character is actually a little bit of all the cultures put together. The
bayanihan or spirit of kinship and camaraderie that Filipinos are famous for is said to
be taken from Malay forefathers. The close family relations are said to have been
inherited from the Chinese. The piousness comes from the Spaniards who
introduced Christianity in the 16th century. Hospitality is a common denominator in
the Filipino character and this is what distinguishes the Filipino. Filipinos are
probably one of the few, if not the only, English-proficient Oriental people today.
Pilipino is the official national language, with English considered as the country's
unofficial one.
The Filipinos are divided geographically and culturally into regions, and each
regional group is recognizable by distinct traits and dialects - the sturdy and frugal
llocanos of the north, the industrious Tagalogs of the central plains, the carefree
Visayans from the central islands and the colorful tribesmen and religious Moslems
of Mindanao. Tribal communities can be found scattered across the archipelago. The
Philippines has more than 111 dialects spoken, owing to the subdivisions of these
basic regional and cultural groups.
Some 80 percent of the population is Catholic, Spain's lasting legacy. About 15
percent is Moslem and these people can be found basically in Mindanao. The rest of
the population is made up mostly of smaller Christian denominations and Buddhist.
Technology environment Science and technology are vital to a dynamic business environment and a driving
force behind increased productivity and competitiveness. Even for lower-middle-
income countries such as the Philippines, transformational development depends on
acquiring and adapting technology from the global economy. Lack of capacity to
access and use technology prevents an economy from leveraging the benefits of
globalization. Unfortunately, very few international indicators can be used to judge
performance in this area for low- and lower-middle-income countries.
The Philippines received a rating of 3.0 on the WEF executive survey in 2006, which
is well below the scores for Indonesia (3.6) and Thailand (4.2). It is likely that this
ranking will increase, however, because of improvements in the coordination among
agencies enforcing intellectual property rights; on this basis, the U.S Trade
Representative in 2006 removed the Philippines from its Special 301 Watch List,
which is an annual review of intellectual property rights protection. Part of the
problem may be a lack of attractive domestic opportunities for skilled scientists and
engineers because of weaknesses in the investment climate. But the indicators also
suggest a possible need to strengthen science and technology education.
Environmental analysis: Mauritius has a Ministry of Environment that is responsible for the cleanliness of the
island. One of its tasks is garbage and litter collection at public places, and it does an
admirable job in the areas it services. Environmental complaints can be filed online
and requests for Environmental Awareness can also be made. Due to garbage the
lend is becoming toxic chemicals.
Legal environment Philippines follow the French legal tradition and has one of the poorest records in
Asia in protecting minority shareholders’ interests. It fares quite poorly in protecting
Creditor Rights, Rule of Law and Corruption. The per capita GDP of Philippines is
USD 850. Ownership data from indicate that almost 81 per cent of the firms have a
controlling shareholder. Also, the mean ownership by three largest shareholders is
about 57 per cent indicating relatively high degree of ownership concentration. The
mean voting rights of 32 per cent for the typical firm is slightly higher than the
ownership of 28 per cent indicating that the probability of expropriation is not
substantial. Although Philippines has a set of rules and regulations regarding CG
practices, enforcement has often been a problem.
The Philippine Stock Exchange and Securities and Exchange Commission are
empowered to investigate and impose penalties. But the process is laden with delays
and loopholes. Not surprisingly, the weighted score for CG Environment of
Philippines is the second lowest in the set of countries studied.
SUMMARY
The Philippines Economy is the 46th largest in the whole world, with an estimated
2010 gross domestic product (nominal) of $189 billion. In the Primary exports there
are semiconductors and electronic products, , petroleum products, coconut oil, and
fruits, transport equipment, garments, copper products. The United States, Japan,
China are the major trading partners. Of the country's total labor force of around 38.1
million, the agricultural sector gives employment to 32% but it contributes to only
about 13.8% of GDP. The industrial sector gives employment to around 13.7% of the
labor force and accounts for 30% of GDP. Where the 46.5% of workers involved in
the service sector are accountablr for 56.2% of GDP.
The agricultural sector in the country, though considerable continues to decline
having contributed only 14.2% of the country's GDP which is the lowest compared to
the service and industrial sector. Most of the agricultural products are coconut
products ,rice, sugar, corn, bananas, pineapple products , mangoes pork, and eggs.
The agricultural sector is topic to low productivity, insufficient infrastructure and low
economies-of-scale.
The Philippines has a delegate democracy based on the U.S. system. Political risks
are increasing as a result of pessimistic impact that rising rice and other food prices
are likely to give impact on society. The accounting system of the country is strongly
influenced by US and, and also , by the international practices. The governing
legislative and institutional structure is broad—the components of a developed and
healthy structure are identifiable. The Gross National Product (GNP) is the total
value of all final goods and services produced within a nation in a particular year,
plus income earned by its citizens minus income of non-residents located in the
country.GNP measures the value of goods and services that the country's citizens
produced regardless of their location.
CHALLENGES Although the country recognizes the tremendous potential that can be achieved from
biotechnol-
ogy, several challenges need to be met before the goals set can be achieved.
Increase Productivity Yields of crops and livestock have been declining, while
demands are increasing, because of the rapid increase in population. Conversion of
prime agricultural lands into other uses has placed tremendous pressure on the
agricultural sector to increase productivity per unit area.
GLOBAL COMPETITIVENESS With impending trade liberalization, the country expects to receive cheap agricultural
products from other countries, thus widening its balance of trade. In 1997, the value
of Philippine exports was US$25.2 million while imports were valued at US$35.9
million giving a negative trade balance of US$10.7 million. The challenge is to use
biotechnology to produce local products that are highly competitive with those from
foreign sources, thereby promoting exports of quality products while reducing
imports.
TRADE-RELATED ISSUES Transgenic crops and other GIO products may become trade-related issues in the
future because of trade liberalization. It is expected that new genetically improved
crops will be imported into the Philippines. The challenge is to create public
awareness of the benefits and risks of any newproduct and assist acceptance of new
technologies by consumers, where these are beneficial.
PART – II
Sector specific study of PHILIPPINES
INTRODUCTION Since end of the II World War, the Philippine economy had a mixed history of growth
as well as development. Over the years, the country has gone from one of the
richest countries in Asia to one of the poorest. Also the growth after the war which
earlier was rapid, but gradually slowed down over time.
Major sectors of the country include agriculture and industry, especially food
processing, textiles and garments, as well as electronics and also automobile parts.
Most of the industries are located in the urban areas around the capital Manila.
1. Financial Sector
2. Infrastructure Sector
3. Agriculture Sector
4. Education Sector
5. Natural Resources Sector
6. Healthcare Sector
FINANCIAL SERVICE SECTOR Analysis of financial service sector The financial sector of Philippines fared relatively well
compared to the crisis economies Indonesia, Korea &
Thailand, in the there were no large financial failures in
the Philippines. This has been partly attributed to the
reforms that had been implemented in the financial sector
begging in the early 1980, including the strengthening of
prudential regulation & supervision of the banking system. Financial services
integration or convergence has affected the effectiveness & efficiency of financial
sector regulation.
Financial services are traditionally classified into three major sectors- banking,
insurance & securities. Financial services integration or financial convergence refers
to the production or distribution of a financial service traditionally associated with one
of the three major financial sector by service providers from another sector. A
universal bank can also be considered a financial conglomerate, which is defined as
consisting of firms under common control that provide services in at least two
financial sectors. The structure that a bank adopts in delivering integrated financial
services is influences primarily by regulation. There are also other factors, including
the historical development of a country’s financial market.
A foreign insurance or reinsurance company or intermediary was allowed entry
under one of the following modes: ownership of the voting stock of an existing
domestic insurance or reinsurance incorporated in the Philippines; investment in new
insurance or reinsurance company or intermediary incorporated in the Philippines; or
establishment for a branch, but not for an intermediary. To qualify for entry, the
companies had to belong to the top 200 foreign insurance or reinsurance or
intermediaries in the world or among the top 10 in their country of origin, and had
been in the business for at least 10 years. The regulatory framework governing the
insurance industry was marked by conservatism and risk aversion. Although this
resulted in overall financial soundness, it was also seen as overly cautious therefore
constrained the growth and development of the sector.
MUTUAL FUND Mutual fund collected money from corporate & individual investors. Fund manager
managed these type of funds & they are invests the money in different securities
such as stocks, money market instruments, bonds, and/or other securities.
Mutual fund is a one type of investment instrument where investors can invest their
money. Mutual funds may become a good option to park hard-earned cash for those
people who have not time to invest. There is also some risk like such as in regular
investment products, mutual funds also carry some risks such as the risk of losing
one’s capital. So, that it’s necessary to tell people to understand & learn the products
which they are investing in.
STOCK EXCHANGE Philippines stock exchange is the earliest stock exchange in Asia.
Started with two former bourses: the manila stock exchange and the
Makati stock exchange December 23,1992 manila stock exchange
and Makati stock exchange united to form Philippine stock exchange. June 1998,the
Philippines securities and exchange commission gave the pse a “self-regulatory
organization” status allowing pse to implement rules and impose penalties on
companies. After January 4,1993 the stock exchange of manila started the
computerization system with the help of stratus trading system along with the
company known as intelligent wave Philippines. Pse started the trading of bonds in
the mid of january2001 the system was modified in such a way which allows stock
brokers to trade bonds to using the same terminal.
CREDIT RATING Credit rating is the symbolic indicator of the current opinion of the credit rating
agency regarding the relative ability of the issuer of the financial (debt) instrument to
meet the (debt) services obligations as and when they arise. it provides a relative
ranking of the credit quality of debt/financial instrument or their grading according it
investment qualities. In other words, credit rating provides a simple system of
gradating by which the relative capacities of some companies to make the timely
repayment of interest and principal on a specific type of debt/financial instrument can
be noted.
The Philippine rating series corporation is domestic credit rating agency in the
Philippine accredited by the bangko sentral ng Philippines and Securities and
Exchange Commission it is also founding member of the association of credit rating
agencies in Asia. They start their operation in 1985. From rating only commercial
papers (CPs) in the 1980s, phi ratings conduct its credit rating in professional,
courteous, fair, and thorough manner. It has avoided and managed “conflict-of-
interest” situations and is always focused on the integrity & integrity quality of the
rating process.
BANK The Philippine banking has been considered to be superior on to the global
parameters. The major attractions include the cell-phone as well as internet banking.
The cell phone banking occupies major attraction in the sense that after activating
the cell phone banking you can do your dealings through branches to pay your
invoices or transfer money from one Philippine bank account to other through phone
cards.
Considering the global scenario the banks have focused on to the “Smart Money”
debit card to address the domestic issues.
INSURANCE In Philippines, after the global finance crisis in 2008, the
insurance industry gives the mediocre performance.
According to insurance commission & industry sources,
crisis gives the greater effect on life insurance sector &
less effect on non-life insurance sector. In September
2010, there were a 30 life insurance firms &22 domestic
& 8 foreign-owned.
The insurance commission, an agency of the department of finance (DOF), is the
regulator & controller of all type of insurance. The Philippines life insurance
association (PLIA)is the leading industry group in the Philippines. Most Filipino in the
Philippines still can not afford policies, so the insurance sector in Philippines are
limited. Market penetration, as measured by the ratio of life insurance policies in
force to total population, was at about 13.9% as end of 2009, according to data of
the insurance commission. Existing Filipino-owned life & non life insurers to raise
their minimum paid-in capital from P50m by P25m annually until it reaches P250m
by December 2011 which required by the DOF issued Order No 27-06 in September
2006.pertly foreign –owned insurers were required to increase capitalization more
sharply. Those with foreign equity of 40% or less had to raise their paid-in capital to
P150m by end of 2007 & to P300m by end of 2010.
BUSINESS ACTIVITIES OF FINANCIAL SERVICES IN PHILLIPINES
The financial services marketplace in phillipines is huge demanding—and less
forgiving—than ever before. Customers are savvier, mistake is tighter and
competition is growing. Worldwide an accenture works with more than 600 clients of
financial services, helping them use of services to transform and optimize their
capital markets and insurance businesses & banking.
Financial intermediation is less expensive & also economical to both small
businesses and small savers.
(a) Because of high transaction costs, small businesses for which it is difficult to sell
bonds & stocks, so it provides some funds for them.
(b) It also beneficial for the small savers by pooling their funds and also diversifying
their investments.
Banking industry group Acquire, Target and retain customers
• To offer services & expand product. • To Manage the risk • fulfill with total new regulatory initiatives • Leverage new type of distribution channels and
technologies
Capital markets industry group
• To make Simple and some what different their operating models
• Increase the competitiveness which is beneficial
• Implement the innovative trading, information management systems & asset
management and solutions.
Insurance industry group
• Improve business performance & processes
• Accelerate speed to market
• Latest technologies
• Optimize sourcing and transform cost structures
• Reduce risk
• Increase enhance customer service & distribution effectiveness
Stock exchange industry Manila Stock Exchange started the computerization of its operations using with the
Stratus Trading System (STS) On January 4, 1993, with a company called Equicom.
After that year, the former Makati Stock Exchange adopted the MakTrade trading
system on June 15. On March 25, both systems were linked. After that to produce a
One Price-One Market exchange. After that two years, the implementation of the
Unified Trading System (UTS) on November 13, 1995, allowed with the use of a
single-order-book system on MakTrade software where all type of orders are
matched & posted in one computer.
FUNCTION OF FINANCIAL SERVICES IN PHILLIPINES
There are functions of some small sub sector of financial services.
INSURANCE Providing protection:- its allow security against future risk, accident & uncertainty.
Collective risk bearing:-It is a medium through which some losses are divided
among large number of people.
Evaluating risk: - fixes the volume of risk by assessing diverse factors which give
rise to risk. Risk is the basis for ascertaining the premium rate as well.
Preventing losses- warns individuals from uncertainty & risk by observing safety
instruction; installation of automatic sparkler or alarm system, etc.
Covering bigger risks with small capital- provide security & this is done by paying
small amount of premium against larger risks & dubiety.
Medium of to earn foreign exchange- Being an international business, any country
can earn foreign exchange with the help of issue of marine insurance policies & a
different other way.
Stock exchange PH is one of the online trading facility of Accord Capital Equities Corporation, the first
local broker dealer in S.E.C history to abide by the SRC Ruling 28.1-1 which requires
an UNIMPAIRED PAID-UP CAPITAL of 125 Million Pesos. Top 30 local full service
brokerage firm in the Philippines from accord Capital ranks. We have long-term
history of an excellent reputation of imparting to clients personalized attention, of
being related oriented and not transaction driven brokerage firm.
Non banking
• Inducement to Save
• Mobilisation of Saving
• Investment of Funds
Credit rating
• Credit rating agencies rate the credit – worthiness of securities instruments.
• Credit rating is an opinion that provides a measure of credit quality.
• Phil Ratings’ provided judgment about the degree of credit risk in relation to a
particular transaction or company.
• It promote transparency and to enable the market to best judge the aggregate
performance or to assess the predictive quality of the Credit Ratings, Phil
Ratings will undertake to publish sufficient information about its historical
default rates by rating category.
• Credit rating assesses a company’s capability to pay a specific debt
instrument according to the terms (e.g. amount, maturity) of the issue.
COMPARATIVE POSITION OF BANKING SECTOR IN PHILIPPINES & INDIA
CRITERIA FOR COMPRISON
INDIA
PHILIPPINES
Currency Indian Rupee (INR) Peso
DEC alternative
conversion factor > LCU
per US$
44.27 54.72
ISO code INR 356 PHP 680
Official exchange rate >
LCU per US$, period
average
45.31 51.31
PPP conversion factor to
official exchange rate
ratio
0.21
(Ranked 143rd in 2005)
0.23
(Ranked 141st in 2005.
10% more than India)
Regime float float
S&P/EMDB indexes >
annual % change
46.7 annual % change
(Ranked 17th in 2006.
5% more than Mauritius)
50.3 annual % change
(Ranked 14th in 2006.
8% more than India)
Subdivision 100
(Ranked 116th)
100
(Ranked 63rd)
Symbol dashed P
Terms of trade since
1995
92.9
(Ranked 77th)
110.91
(Ranked 26th. 19% more than India)
TRENDS OF PHILIPPINES WITH INDIA IN RESPECT OF BANKING SECTOR
Foreign direct investment, net inflows (BoP, current US$) Foreign direct investment are the net inflows of investment which is acquire a lasting
management interest (10 percent or more of voting stock) in an enterprise which is
operating in an economy other than that of the investor. This is shows net inflows (new
investment inflows less disinvestment) in the reporting economy from foreign investors.
Data are in current U.S. dollars.
Real Interest Rate (%) Real interest rate is the lending interest rate adjusted for inflation as measured by the GDP
deflator.
YEAR PHIIPPINES INDIA 2002 1542 5626 2003 491 4322 2004 688 5771 2005 1854 7606 2006 2921 20335 2007 2916 25482 2008 1544 43406 2009 1963 35595 2010 1713 24159
YEAR PHILIPPINES INDIA 2002 4.8 7.8 2003 6.1 7.6 2004 4.3 2 2005 4.1 6.3 2006 4.6 4.5 2007 5.4 6.9 2008 1.1 6.2 2009 5.6 4.3 2010 3.3 4.3
Domestic credit which is provided by banking sector (% of GDP)
Domestic credit which is provided by the banking sector includes all credit to various sectors
on a gross basis, with the exception of credit to the central government, which is net. The
banking sector also includes deposit money banks & monetary authorities & also other
banking institutions where data are available (including institutions that do not accept
transferable deposits but do incur such liabilities as time and savings deposits).
Lending interest rate (%)
Lending interest rate is the rate charged by banks on loans to prime customers.
•
YEAR PHILIPPINES INDIA 2002 55.1 58.9 2003 54.3 57.4 2004 54.0 57.6 2005 47.2 58.4 2006 48.2 60.9 2007 48.3 60.8 2008 47.44 68.2 2009 48.7 69.4 2010 49.2 71.1
YEAR PHILIPPINES INDIA 2002 9.1 11.9 2003 9.5 11.5 2004 10.1 10.9 2005 10.2 10.8 2006 9.8 11.2 2007 8.7 13 2008 8.8 13.3 2009 8.6 12.2 2010 7.7 12
Official exchange rate (LCU per US$, period average)
Official exchange rate refers to the exchange rate determined by national authorities or to
the rate determined in the legally sanctioned exchange market. It is calculated as an annual
average based on monthly averages (local currency units relative to the U.S. dollar).
•
Current account balance (BoP, current US$)
Current account balance is the sum of net exports of goods, services, net income, and net
current transfers. Data are in current U.S. dollars.
•
•
YEAR PHILIPPINES INDIA 2002 51.60 48.61 2003 54.20 46.58 2004 56.04 45.32 2005 55.09 44.1 2006 51.31 45.31 2007 46.15 41.35 2008 44.32 43.51 2009 47.68 48.41 2010 45.11 45.73
YEAR PHILIPPINES INDIA 2002 -282 7059 2003 285 8772 2004 1625 780 2005 1980 -10283 2006 5341 -9299 2007 7112 -8076 2008 3627 -30972 2009 9358 -25922 2010 8924 -51780
Indian
phillipines
Customs and other import duties > current LCU
1,184,050,000,000 (Ranked 2nd in 2008. 4 times more than Philippines)
260,248,000,000 (Ranked 8th in 2008)
Net taxes on products > constant LCU
1144320000000 71380000000
Net taxes on products > current LCU
3162450000000 349594000000
Net taxes on products > current US$
71429870000 (Ranked 10th in 2005. 10 times more than Philippines)
6388834000 (Ranked 37th in 2005.)
Net taxes on products > current US$ (per capita)
65257.6 $per 1000 people (Ranked 89th in 2005.)
76923.4 $ per 1000 people (Ranked 85th in 2005. 18% more than India)
Net taxes on products > current US$ (per $ GDP)
0.1 $ per $ 1 billion of GDP(ranked 80th in 2005.37% more than phillipines)
0.1 $ per $ 1 billion of GDP
(ranked 104th in 2005)
Taxes on goods & services> % of revenue
26.67% (ranked 62nd in 2008.2% maore than phillipines)
26.15% (ranked 64th in 2008)
Taxes on income, profits & capital gains> current LCU
3551260000000 482248000000
Taxes on income, profits & capital gains including income tax > % of total tax
51.64% (ranked 13th in 2008. 12% more than phillipines)
45.96% (ranked 24th in 2008)
Taxes on international trade > % of revenue
14.87% 22.19%
Tax payment 14.31 (ranked 79th in 2008)
15.8 (ranked 76th in 2008. 10% more than india)
Tax revenue > % of GDP
12.3% (ranked 75th in 2008)
14.1 (ranked 66th in 2008. 15% more than india)
Tax revenue 6877150000000 (ranked 5th in 2008. 6 times more than phillipines)
1049179000000 (ranked 16th in 2008)
Policies & norms of financial service sector in phillipines (import/export)
Trade policy has been the Philippines' major tool for achieving industrialization and
economic development since gaining its political independence. Like her other
ASEAN neighbors’, the Philippines' trade policy started with an inward-looking
import-substitution orientation based mainly on the infant industry argument.
The removal of non-tariff barriers started under the import liberalization programmers
for the period 1986-89 by gradually removing non-tariff restrictions on imports mainly
for import licensing requirements and outright import bans. These programmers
resulted in the reduction of regulated items from 32 per cent of the total PSCC lines
in 1985
The primary authority controlling imports is the Bureau of Customs (BOC).It
enforces the country's Tariff and Customs Code. Other important regulatory
agencies include: the National Economic and Development Authority (NEDA), the
Bangko Sentral Pilipinas(BSP), the Industry Section of the Department of Trade and
Industry(DTI),the Board of Investments (BOI) of DTI, the Environmental
Management Bureau (EMB)the Department of Health (DOH).
Policies & norms of financial service sector in India
Together with other financial services, insurance services contributed 7% of the
country’s GDP in 2009. A well developed and evolved insurance sector is a boon for
economic development as it provides long-term funds for infrastructure development
and concurrently strengthens the risk-taking ability of the country. Further, insurance
has been a notable employment generator, not only for the insurance industry, but
has also created significant demand for a range of associated professionals such as
brokers, insurance advisors, agents, underwriters, claims managers and actuaries.
The Indian experience demonstrates that financial inclusion can work within the
framework of mainstream banking within a sound
regulatory framework. Regulations have been used to
facilitate financial inclusion without subventions or
compromising on prudential and financial integrity norms.
Regulations have been proportional to the risks. Non-banking non-financial players
are encouraged to be partners and agents of banks rather than principal providers of
financial services.
Reform process initiated in 1991.
Abolition of Licensing, Permits and Quotas in Industrial Sector
Financial Sector Reforms
1. Banking Sector Reforms
- Freeing of interest rates by the Central Bank
- Rationalization of priority sector landings & lowering of directed credit
2. Capital Market Sector Reforms
- Abolition of Controller of Capital Issues and Establishment of
Securities and Exchange Board of India in 1992.
- Issuance of regulations for mutual funds, portfolio managers,
registrars, merchant bankers, depository and participants, etc.
3. Insurance Sector Reforms
• Many regulations under the Banking Regulation Act which at present has the
requirement that banks obtain regulatory approval for a range of routine
business matters including opening branches, remuneration to board
members and even payment of fees to investment bankers managing equal
capital offerings as pointed out by the Raghuram Rajan Committee report.
• In the case of insurance, besides, cap on foreign investment of 26
percent/other restrictions like minimum capitalization norms, funds of policy
holders to be retained within the country, compulsory exposure to rural and
social sectors and backward classes.
• as well as international accounting firms and tax advisory firms as well as
specialist management consulting firms focusing on the International Financial
Services sector.
• Providing extended banking arrangements by greater coordination among the
existing network of banks.
Some of the important credit and finance related issues & norms for services are the
following:
• Addressing the issue of withholding tax on interest paid on ECBs. The
requirement of overseas lenders/ investors is that interest due to them be paid
without deducting any withholding tax in India. Exemptions could be
considered at least for foreign currency borrowings raised for financing all
export related activities and overseas acquisitions.
• The venture industry not only provides the capital to create some of the most
innovative and successful companies , but also becomes actively engaged
with a company, typically taking a board seat. With a startup, daily interaction
with the management team is common. Given the fact that some of the
renowned venture capital backed companies include Intel Corporation,
Microsoft, Apple, Google and Starbucks Corporation among others, there is a
need to focus on Venture Capital for services sector.
Service
• Facility of duty free import for service sector having a minimum foreign
exchange earnings of Rs.10 lakhs.
• Entitlement of the duty free shall be 10% of the average foreign exchange
earned in the preceding 3 licensing years.
• Export profits are exempt from income tax. Higher royalty payments of 8%
(net of taxes) are permitted on export sales as compared to 5% on
domestic sales. Export commissions up to 10% are also permissible. Policies & norms of insurance sector in India In case of an insurer carrying on general insurance business in India, the appoint
edactuary is required to ensure that the rates are fair in respect of those contracts
that are governed by the insurer's in-house tariff and that the actuarial principles, in
the determination of liabilities, have been used in the calculation of reserves for
incurred but not reported claims and other reserves where actuarial advice is sought
by the authority. Non-residents can invest directly in India, either w holly or as a joint
venture. Foreign investment is allowed in virtually all sectors including the services
sect or, subject to Government permission in certain cases.
The Finance Act, 2002 has brought insurance within the service tax net. The insured
is thus liable to pay service tax at the r ate of 5%.An insurance policy needs to be
duly stamped in accordance with the stamp duty prescribed for each kind of policy
under the Indian Stamp Act, 1899 (“Stamp Act”). Non-payment of stamp duty is a
punishable offence with a fine which may extend up to rupees two hundred if an
insurer receives the premium for an insurance policy and does not execute a policy
or executes a policy which is not stamped.
Policies & norms of Mutual funds Under the FOF scheme, investments are made in other mutual fund schemes rather
than in securities. Unlike equity schemes where there is no tax on dividend
distribution, FOFs are still required to pay the dividend distribution tax. Further, while
equity funds are exempt from capital gains tax for investors for holding for more than
a year, FOFs do not qualify under the same clause. This is because they do not
purchase equities as an asset class, but equity funds as securities.
Policies & norms of domestic credit rating agency A DCRA should adopt written internal procedures and mechanisms to (1) Identify (2) Eliminate, or manage and disclose, as appropriate, any actual or
potential conflicts of interest that may influence the opinions and analyses.
A DCRA analysis of the individuals a DCRA employs who have an influence on ratings decisions. A DCRA’s code of conduct should also state that the DCRA will disclose such conflict avoidance and management measures. DCRA’s Independence and Avoidance of Conflicts of Interest A DCRA should disclose the general nature of its compensation arrangement with
rated entities.
Where a DCRA receives from a rated entity compensation unrelated to its ratings service, such as compensation for consulting services, a DCRA should disclose the proportion such non-rating fees constitute against the fees the DCRA receives from the entity for ratings services
[54]
Business opportunities in future
The average growth rate of the Philippines is about 5 percent over the last decade,
which is significantly very high than the previous last two decades. In the year 2010,
the Philippines grew by 7.6 percent, which is highest in the last 30 years. In recent
year, Philippines is able to restore its macroeconomic stability and has proved
flexible to the external shocks like the global financial crisis and recession, food and
fuel price hikes, and the impact of typhoon and El Nino. A strong basis for currency
stability and a healthy build up of international reserves is due to the rising and
counter-cyclical remittances. Philippines enjoy a savings rate which exceeds
investment. The human capitals of Philippines are in high demand around the world.
Regardless of these achievements, inclusive growth that benefits the poor has been
a continuing challenge for the Philippines. The level of poverty has remained same
over the last decade with no significant changes. The government has taken the
following steps to improve the livelihoods of the poor:
- An improved business climate
- Infrastructure development
- Investment in Human capital
- Social protection
- Increased budget allocation for health and education
- And conditional cash transfer programs
The country has a high priority towards Good Governance. The current focus of
Administration is on anti-corruption to improve the investment climate for domestic
and foreign investors and to enhance social service delivery and help reduce poverty
through more accountable governance.
The voice of the public for urgent reforms is well articulated by a vibrant media, a
dynamic civil society. Media has highlighted the work of civil society groups which
has contributed to the successful promotion of specific reforms in the fields of the
following:
- Procurement
[55]
- Textbook delivery
- Budget transparency
- Community infrastructure
To achieve inclusive growth and address these challenges, the Philippines
Development Plan 2011-2016 under the administration of President Benigno S.
Aquino 3 has adopted three broad strategies which are as follows:
1. Promoting equal access to development opportunities through:
- Better education
- Primary healthcare and nutrition
- Basic social services
- Equal access to infrastructure, land, credit, technology and other
productive inputs
- Good governance
- Strong institution to promote competition
2. Establishing effective and responsive social protection to protect and
enable those who do not have the capability to participate in the economic
growth process
3. Overarching theme of good governance
President Aquino has pursued an agenda of transparency and accountability, civil
society participation and anti-corruption.
In the insurance sector profitability requires the ability to gauge high degree of risk &
rewards. The insurance sector became expert in expected behavior but missed the
small distinctions whih predict different outcomes. For the new business
opportunities, Insurance companies are using data warehousing techniques. In this
sector, this is the uncover opportunities for both level micro & macro. Macro view
[56]
allows understanding a market & geography in detail with the help of combining
broad array of external sources. The micro view exploits pattern recognition
techniques to reveal hidden & sometimes counter-intuitive facts & associations which
is then used to create new products or services or processes.
Conclusion The Philippine financial sector comprises a variety of institutions, including banks
(commercial banks whose operations include investment banking, thrift banks, rural
banks, and development banks) and non-bank institutions (insurance companies,
finance companies, pension funds, and the securities markets). The sector is highly
dominated by banking, which itself is highly concentrated, with the six largest
commercial banks controlling around 60% of all bank assets.
The big commercial banks are most often parts of family- owned business
conglomerates and tend to operate as in-house banks for the non-bank business
and commercial operations of the controlling families. The contractual savings
sector, which is composed of public and private pension funds and insurance
companies, is another very small segment of the financial system. Capital markets
are even much smaller in size and as a source of financing for private businesses,
since they cater primarily to government domestic borrowing.
In the insurance sector profitability requires the ability to gauge high degree of risk &
rewards. The insurance sector became expert in expected behavior but missed the
small distinctions which predict different outcomes. For the new business
opportunities, Insurance companies are using data warehousing techniques.
An important segment of the Philippine financial system which has rapidly emerged
is Non-Banking Financial Companies (NBFC). NBFCs has primarily catered to the
credit requirements of the unorganized sector such as wholesale and retail trader,
small scale industries and small borrowers at the local level. NBFC constitutes of a
heterogeneous group of financial institutions which performs wide range of activities
like: Hire purchase finance, Vehicle financing, Equipment lease finance, Personal
loans, Working capital loans, Housing loans, Loans against shares and investment
etc.
[57]
Recommendations
Philippine’s is a developing country and has a great potential for growth which can
be seen by analyzing its GDP growth over the decades. This nation has a huge
investment return opportunities, and supporting this are various financial instruments
were we can invest.
In Insurance sector, there is the uncover opportunities for both level micro & macro.
Macro view allows understanding a market & geography in detail with the help of
combining broad array of external sources. The micro view exploits pattern
recognition techniques to reveal hidden & sometimes counter-intuitive facts &
associations which are then used to create new products or services or processes.
A considerable growth is seen in NBFCs segment and is recognized as
complementary to the banking sector due to implementation of innovative marketing
strategies, introduction of tailor-made products, customer oriented services, and
attractive rates of return on deposits and simplified procedures.
Mutual fund is a one type of investment instrument where investors can invest their
money. Mutual funds may become a good option to park hard-earned cash for those
people who have not time to invest. There is also some risk like such as in regular
investment products, mutual funds also carry some risks such as the risk of losing
one’s capital. So, that it’s necessary to tell people to understand & learn the products
which they are investing in.
INFRASTRUCTURE SECTOR
1.1 Introduction
Infrastructure sector is one of the most important sectors in Philippines. It is a
capital intensive sector. But, there is no appropriate development in this sector due
to lack of financial resources. As a result, the quality and quantity of infrastructure
services is not up to the mark. Among the economies of ASEAN countries, the
country’s on the whole infrastructure quality is below Singapore, Malaysia, and
[58]
Thailand and almost same as that of Indonesia and Vietnam as mentioned by Global
competitiveness reports.
This sector mainly comprises of different sub sectors like:
• Information and communication technology
• Power
• Roadways
• Airports
• Seaports
The Philippines faces certain infrastructure challenges. The most vital is to
assure proper supply of power. Next step is to improve the efficiency of
transportation through various modes because of increasing population and its
spending power. Also the supply of water is also not enough for drinking as well as
farming, and the sanitation facilities as well as the solid waste disposal systems are
very poor.
1.2 Role of Infrastructure sector in Economy of Philippines
Good infrastructure improves a country’s growth prospects by strengthening
its investment climate. Safe, reliable, and cost-effective infrastructure can have a
significant effect on industrial productivity and costs, and thus on investment,
employment, and export earnings—all growth-enhancing factors.
Because of the difference in economic activities between urban and rural
areas, rapid urbanization in the Philippines is also changing the nature of the
infrastructure that will be needed in order to meet the demand.
1.3 Structure, Functions and Business Activities of Infrastructure Sector
1.3.1 Telecommunications Sector
Structure Earlier the telecommunication sector was a private monopoly of PDLT. Due to
this there was a lower telephone penetration rate and under investment. But in 1990,
the government thought to divest through privatization. As a result of this
liberalization, many new players entered the market which in turn increased
competition.
[59]
Source: Philippine Telecommunications Industry (pre-CICT)
DOTC (from Minges, et.al. 2002)
Hence a successful implementation of the liberalization, deregulation and
interconnection policies in the telecommunications industry gave birth to ICT sector
in Philippines.
Functions DOTC
• Formulating and implementing policies and guidelines for the communication
systems at local as well as national level.
• Establishing and administering integrated programs for communication
• Assessing and reviewing communication research programs of government.
NTC
• Developing tariff regulations, policies regarding market entry, licensing, and
competition and technology regulations.
• Granting permission to install and operate telecommunication and broadcast
services and radio stations.
• Prescribing and regulating the areas of operating of various service providers.
• Deciding the rates and charges of various operations.
Business activities
• Providers of connectivity specifically telecommunications encompassing fixed
lines, fixed mobile, wireless mobile, and satellite technologies
[60]
• Information and Communication Technology enablers that facilitates the
electronic transmission of data. These include the Internet Service Providers
(ISPs), hardware and software services, user interfaces, among others.
1.3.2 Power Sector
Structure
Source http://pdf.usaid.gov/pdf_docs/PNACH433.pdf
In power sector structure mainly divided in four parts
• Regulation / policy include the government
• Generation include the IPP
• Transmission to NAPOCOR
• Distribution to consumers / companies
Business Activities
1. Generation, transmission as well as distribution of power
2. Supply of electricity including collection and metering,
3. Related businesses which utilize the generation, transmission, distribution or
supply assets for non-electricity related services and
1.3.3 Road Transport
Structure
[61]
Construction and maintenance of roads and bridges is a mandate of the
Department for public works and highways. The two major toll roads namely North
Luzon Expressway as well as South Luzon Expressway are constructed by DPWH in
the year 1975–1977 and then given franchise to a private company namely
Construction & Development Corporation, in year 1977.
Functions Department of public works and highways
• It is responsible for planning, design, construction & maintenance of national
road network.
• It sets technical standards for all road and bridge classes and establishes
regulations regarding vehicle weights and axle loading.
• NEDA monitors and coordinates public sector investments (both foreign and
domestic exceeding P300 million) through its Investment Coordination
Committee.
• DBM drafts the annual national budget for approval of Congress and sets the
budgetary ceilings through its Development Budget Coordinating Committee.
All foreign funding and official development assistance (ODA) is approved by
NEDA and the Department of Finance.
Business Activities
• Road freight and haulage services
• Bus services
1.3.4 Airports
Structure
For the development of the Manila International Airport final approval was got
by the dissemination of Executive order no.381. A master plan was made in 1973 by
Airways Engineering Corporation. The terminal was designed with the capacity of 4.5
million passengers per year.
Functions
[62]
Airports are meant so that people can go from one destination to other.
Airports bring in returns to the city since airlines have to pay to rent gate space and
also pay for take-off as well as landing rights. NAIA is known as the main gateway for the visitors to the Philippines. It is a
main hub for all the Philippines airlines.
Business Activities
• Connects the cities & countries with each other so it helps the business
within the country as well as outside the country
• Provide good facilities in the fast movement of man & any materials which
help in promoting trade & commerce.
• It provides employment opportunities to the workers who are working at
the construction site when the airport is being built.
2.1 Comparative position of infrastructure sector with India 2.1.1 ICT sector ICT indicators
Source:http://www.investphilippines.info/wp-content/uploads/2010/12/08.-Part-3-Seven-Big-Winner-Sectors-Reforming-the-Infrastructure-Policy-
Environment1.pdf
[63]
Source: http://www.investphilippines.info/wp-content/uploads/2010/12/08.-Part-
3-Seven-Big-Winner-Sectors-Reforming-the-Infrastructure-Policy-Environment1.pdf
Both the figures indicate the level of penetration of mobile as well as
computers. Its 81 out of 100 for mobiles which is much higher compared to India that
had just 43.8 mobile users per 100 inhabitants. Also the proportion of households
having computers was 12.7% in Philippines which is much higher than 4.4% in India
in 2009.
Till now India was considered as an outsourcing hub, but now Philippines is
on the verge of overtaking India.
Below are the few reasons as to why Philippines have competitive advantage over
India:
1. Skilled Workers – India lacks in the availability of skilled workers and this has
caused prices to rise in recent years, on the contrary, Philippines has a huge
pool of talents which has still remained un accessed and also fewer options
allows for higher employee retention and continuous development with their
offshore counterparts.
2. Cost – Philippines remain a less expensive option. In certain industries, costs
of employment in India have risen to approximately 60% to that in the US,
with Philippines only gaining roughly 30% for those same.
3. High tax incentives and business friendly policies – Philippines
government also invests heavily in infrastructure for the development of the
nation.
Another advantage that Philippines has, is the dominance in its
telecommunication infrastructure which is more established and maintained because
[64]
of striking economic incentives and extremely skilled human resources. But still, due
to good educational system, India has a pool of IT professionals which is not
available in Philippines and moreover India enjoys greater bandwidth due to
undersea cables and low telecom rates.
2.1.2 Power sector India’s total installed capacity of power sector has been 141 Giga Watts.
India has fifth largest generation capacity in the world and low per capita
consumption at 631 units which is less than half of china. India’s transmission and
distribution network is of 6.6 million circuit km. This is considered to be third largest
in the world.
The Philippines ranks highly for having attracted large investments into its
power sector and also navigating the shocks of the Asian financial crisis in a way
that has maintained the confidence of most IPP investors.
2.1.3 Road transport
India has a wide network of national highways that links all the major cities
and the state capitals, which forms the economic backbone of the country. India has
a total of 70,934 km National Highways, of which 200 km are expressways.
Transport infrastructure plays an important role in integrating the island
economies of an archipelago such as the Philippines. The Philippines has total of
165 kms. Comparison of road lengths in India and Philippines:
INDIA 25,50,000 km
PHILIPPINES 202205 km
Source: International labor organization
[65]
Source:http://www.fidelity.com.au/insights-centre/investment-articles/indias-
infrastructure-needs-fixing-fast/
So we can see that no. of paved roads in Philippines as compared to India is less.
2.1.4 Airport transport Passenger volumes for airport (in millions)
SOURCE: http://www.investphilippines.info/wp-content/uploads/2010/12/08.-Part-3-Seven-Big-Winner-Sectors-Reforming-the-Infrastructure-Policy-
Environment1.pdf
The Philippines airport sector has seen steady growth compared to India. The
steady growth has seen in recent years. This growth is particularly as a result of the
introduction of low cost carrier. The Low cost carrier would become a very important
growth driver.
2.2 Present Position and Trend of Business (import / export) with India / Gujarat during last 3 to 5 years
[66]
Major imports by India from Philippines: Iron and steel; machinery;
Electrical and electronic machinery and equipment; vehicles; newsprint paper and
paperboard; auto components along with animal or vegetable fats and oils and
organic chemicals.
2.2.1 ICT sector
The value of the ICT market in the Philippines is estimated to be US$37
billion, with Business process outsourcing (BPO) contributing 30 percent to total ICT
sales. BPO is a subset of outsourcing that involves contracting another company to
handle specific business functions.
Electronic Exports: Texas Instruments (US), is the chief investor in the sector.
Computers as well as computer components and accessories are also assembled
here by companies such as Integrated Microelectronics (Philippines), Lexmark (US),
Epson (Japan), and Acer (Taiwan).
Electronics exports growth and share of total exports, 1992-2009
Source: http://www.investphilippines.info/arangkada/manufacturing-logistics/
Figure shows that the rate of growth of electronics exports is very high and is
growing as fast as 50% in 1995, and the share of electronics exports in total exports
is also major, reaching more than 70% in 1999.
Import trends
In 2010, the Philippines imported a total of US$20 billion worth of ICT goods.
The majority of imported ICT products were electronic integrated circuits / micro-
[67]
assemblies, constituting 61 percent of total ICT imports, and parts and accessories
of computers and office machines (20 percent). Indian companies have invested in
chemicals and IT in the Philippines while Filipino investments in India are in telecom,
waste processing and human resources development.
2.2.2 Power Sector Import trends:
2.2.3 Road Sector
Considering the India-Philippines trade relations, materials that are required in
construction of roads i.e. iron and steel are imported and exported.
Exports of Iron and steel from India to Philippines from 2007-2010 is as
follows: (Value in mn US$) 2007-08 2008-09 2009-10 Iron &steel 37.84 63.17 71.41
Imports to India from Philippines
(Value in mn US$)
[68]
2007-08 2008-09 2009-10 Iron &steel 37.23 11.21 4.19
Source: http://www.embindia.org.ph/commercialbrief.pdf So from above tables we can see that India’s exports has increased to
Philippines while on other hand imports has reduced from Philippines to India.
Indian Investments in Philippines:
Global Steel Philippines Inc. of the Ispat Group, in Iligian City,
Mindanao province, with a capacity of 1.2 million hot/cold rolled coils. Total
investment is Peso 13 billion (US$ 245 million) payable over a period of 8
years.
Key areas of collaboration:
• Health & medicines
• Defense securities
• Energy
• Agriculture
• Tourism
• Construction
3.1 Policy norms for import / export including licensing / permission, taxation etc in infrastructure sector in Philippines • Build-Operate-Transfer (BOT) Law
The BOT Law, formed in 1990 and modified in 1994, provides the legal
framework for build-operate-transfer and public-private-partnership projects. Still,
there is not a single government agency which is in charge for project preparation
and planning.
• Joint Venture Agreements The government agency’s head has full authority to sign a Joint Venture
Agreement. But the process is not transparent. The public becomes aware of the
project only after JV agreement has been made, and conditions of such agreement
are not revealed.
[69]
3.1.1 Policies and norms for ICT services export/import in Philippines Duties and tariffs:
As Philippines the world trade organization, it has been complying with the
Information-Technology Agreement (ITA) since 2000 by imposing a zero-tariff on
most information-technology equipment and inputs. The free trade pact aims to
further reduce or eliminate tariffs in the next 12 years. Value added tax (VAT) of 12
percent is levied on all imports.
Licensing and registration requirements: The Philippines' National Telecommunication Commission (NTC) issues
certification of telecom equipment. Mobile telephones also require an approval.
Some equipment is required to be tested at the incumbent telecom carrier
laboratories while other equipment is reviewed using foreign standard test reports.
3.1.2 Policies and Norms of Philippines for import/export in Power
Under the Omnibus Investments Code of 1987, foreign and domestic investors
may avail of fiscal and non-fiscal incentives provided they invest in preferred areas of
investment identified annually in the Investment Priorities Plan (IPP). If the areas of
investment are not listed in the IPP, they may still be entitled to incentives, provided:
• At least fifty percent of manufacturing is for exports, for Filipino-owned
enterprises;
• Minimum 70% of manufacturing is for production, for majority foreign-owned
enterprises (more than 40% of foreign equity).
Tax Exemptions a) Income Tax Holiday (ITH)
• Six years for new projects granted pioneer status;
• Six years for projects locating in Less Developed Areas (LDA), regardless of
status (pioneer or non-pioneer) and regardless of type (new or expansion);
• Four years for new projects granted non-pioneer status; and
b) Relaxation from taxes as well as duties on the imported spare parts
c) Exemption from excise and export taxes, duty, impost and fees for tenure of
ten years from the registration date.
[70]
3.1.3 Policies and Norms of Philippines for Import/Export in roadways
Norms for imports: The authority controlling imports is Bureau of customs. It levies country’s Tariff as
well as codes. In 1999 August, Executive order 470 cut numbers of tariff categories
and established following structure:
• 10% for raw materials
• 20% for intermediate, semi-finished
• 30 for finished goods
A specific excise tax is calculated based on weight, volume, capacity or another
physical unit of measurement.
Norms for exports: Bureau of customs & Bureau of export trade promotion of DTI are government
agencies that look after export procedures.
The central bank monitors all the export transactions. There are 250
registered companies in EPZ’s most of which are involved in manufacture and export
of electronics, plastics, fabricated metals and transport equipment.
3.1.4 Policies and Norms of Philippines for import / export in Airport Regulations for Import:
Items Prohibited:
• Printed subversive, obscene and pornographic materials;
• Firearms and its parts, replicas as well as explosives and ammunition;
• Articles made from gold, silver and other precious metals without any mention of
actual goodness of quality;
Regulations for Export:
[71]
• Free export by travelers (18 years and above)
1.) 200 no. of cigarettes / 50 cigars / 500 grams of tobacco;
2.) 1 quart of alcoholic drink.
Regulations for Baggage Clearance:
Baggage is to be cleared at the 1st port of entry. Crew members must clear their
baggage at the Customs Counter.
3.2 Policies and norms of export/import in India:
Indian Infrastructure policy:
Major policy amendments such as deregulation, feasibility gap funding ,
Infrastructure finance company of India, Infrastructure Committee , Program on rural
infrastructure, mission for National and urban renewal, public and private
partnerships and the commencement of private sector infrastructure funds are being
implemented in infrastructure sector.7
3.2.1 Policies and norms of ICT export/import in India
Telecommunication Policy in India
74% FDI is permitted in fixed and wireless, Services for Unified Access,
National and International Long Distance, Public Mobile Radio Trucked Services, V-
Sat, Global Mobile Personal Communications Services and similar other value
added services, ISP with gateways and radio paging.
Some major policy changes in improving human capital, exports, and e-governance
are highlighted below, including recent initiatives by NASSCOM.
Human capital The National Council for Education Research and Training (NCERT)
introduced the National Curriculum Framework School Education in 2000. Major
objectives of this framework include the use of computers in the curriculum,
enhancing learning opportunities by using ICT across the curriculum, designing
curriculum with inter-disciplinary and cross-disciplinary areas.
Export promotion In order to promote exports, the Indian Government has initiated several
schemes to attract and encourage manufacture and export. Free Trade Zones
provide competitive infrastructure facilities, duty free imports of capital goods, raw
[72]
materials, components and other inputs, tax holidays for exports and access to
domestic markets.
Special Economic Zones (SEZs) The objective of the SEZs is to provide an export environment, with lower
regulations on taxes, duties, labor laws and business infrastructure. Under the Act,
SEZs can be developed either jointly or separately by the central government, state
government, or any individual party (including private parties).
Source: DSTI/ICCP/IE (2008)7/FINAL, http://ncert.nic.in/.
3.2.2 Indian Power Policy:
Indian power policy allows 100% FDI in generation, transmission, distribution
as well as trading of electricity. Establishment of power plants without any permit,
transmission services for autonomous power transmission companies.
3.2.3 Policies and Norms of India for Import/Export in roadways: Indian Road Policy: Infrastructure policy of India on roads allow duty free import of
high capacity as well as modern equipments in construction of roads, total tax
holiday for any ten uninterrupted years of 20 years. Elongated concession tenure of
up to 30 years is allowed according to the policy of roads in India. New industrial
policy of GOI has opened the steel and iron sector for private investment by
removing it from list of industries reserved for public sector and exempting it from
compulsory licensing. Imports:
These products are freely importable as per extant policy. Advance licensing
scheme permits duty free import of raw materials.
Exports:
Government formulated schemes with Duty Entitlement pass Book scheme to
facilitate exports. Under this scheme, exporters are granted due credits which
enables them to import duty free goods in return.
National steel policy 2005 helps the removal of procedural and policy
bottlenecks that affect availability of production inputs and creation of road, railway
and port infrastructure.
[73]
Source: Iron and steel industry in India, March 2012
3.2.4 Policies and Norms of India for Import/Export in airport
Indian Airports Policy: Airport policy of India allows 100% tax exclusion for projects
for a period of 10 years, 100% equity ownership held by the NRI’s, 100% FDI in India
in existing as well as Greenfield airport projects, 49% FDI and 100% NRI investment
are also allowed in air transport services.
3.3 Present trade barriers for import/export in Infrastructure Sector
3.3.1 Present Trade barriers for import / Export of ICT services 1. Long Term Strategic Issues for Exporters to Consider
The Philippines has a large informal / underground market.
Competition from
Parallel imports or unauthorized imports of some products may be encountered by
exporters. In the software sector, pirated or unlicensed software products may find
their way to commercial users. This has led to the creation of the government
agency Optical Media Board (formerly Video Regulatory Board) and the private
sector-led Business Software Alliance (BSA) as watchdog organizations to guard
against the use of illegally-sourced software products. 2.Distribution Channels
Import distribution is usually handled by a local company. It is better to have
partnership with a reliable and well-connected business entity that may help to
understand the local market and the various nuances of Philippine business culture.
3. Pricing
As the purchasing power of Filipinos is relatively lower than in other Asian
countries, the market is price sensitive. Exporters must be prepared to negotiate on
price points. Initial visits to the market are essential and productive but follow-up
visits are more important.
3.3.2 Present Trade barriers for import / Export of Power
[74]
Philippine merchandise exports continue to face a range of non-tariff barriers
that restrict its access to a number of country markets.
The government of Philippines maintains that compliance with the plethora of
SPS and product standards requirements has proven to be onerous and expensive.
In some cases, the Philippines had to meet exhaustive data collection and
certification requirements that take years to complete.
3.3.3 Present Trade barriers in roadways: Approval for Slow Project
Approval for the Infrastructure project is very slow. Investors may have to wait
for at least five years former to the approval. Enormous time and efforts are required
from the beginning of the planning stage to the approval stage. Moreover,
inefficiency increases the project expenditure, along with a rise in the cost of doing
business and that of the project itself.
3.3.4 Present Trade barriers in airports: Customs Barriers
The government of Philippines has made growth in civilizing its customs
regime since its execution of the agreement of WTO on Customs Valuation in the
year 2001. It is currently taking steps to accede to the Revised Kyoto Convention of
World Customs Organization, hard work supported by technical assistance programs
by U.S.
4.1 Potential for import and export in infrastructure sector in India:
Philippines were outside India's trade radar since long time and even after the
'Look East' policy which was launched in the early period of 1990's, the bilateral
trade with Philippines did not increase whereas India’s trade with other countries
such as Vietnam, Malaysia, Thailand, Indonesia, and Singapore grew rapidly. One
reason for this is the aggressiveness that was shown by these countries as long as
trade with our country is concerned. On the other hand, Philippines just remained a
spectator.
Infrastructure of Highways and Roads: The road network in India has evolved as the world’s second largest road network
[75]
with a total of 3.3 million kilometers composed of national highways and State
highways of (65,569 km. and 128,000 km) respectively and a broad network of
district as well as rural roads.
4.1.1 Potential for import and export of ICT services in India and Gujarat Market
Philippines seems to be looking at India to source its requirements for
training and development, as well as B2B collaboration in IT and ITES rather than
from the US or UK. Increasing the penetration of ICT in India will create tremendous
opportunities for both Indian and Filipino companies, said Mr Tiwathia. T-ITeS
companies in Gujarat have grown from less than 10 in 1996 to about 415 by the end
of 2004-05. The software exports have grown from a meager INR 4.75 crore to INR
200 crore, during the same period. In the recently held 'Vibrant Gujarat IT Summit',
19 companies signed Memorandum of Understandings (MoU) to invest a total of INR
11,067 crore. In the recently announced IT policy, the Government has targeted to
create 200,000 jobs by 2011 in this industry.
4.1.2 Potential for import / export in India for Power:
At present the installed ability of stations for electric power generation is
about 130000MW and the capacity of generation is to be amplified to 2,20,000
Mega Watts by 2012.There is almost 8% average annual shortage of power. Central
government has started taking action to increase capacity by establishing Ultra mega
power projects (UMPPs). A plan to raise Nuclear power ability from 3900MW to
10000 MW is also made
4.1.3 Potential for import / export in India for Iron & steel:
India’s exports have increased to Philippines of iron and steel in 2009-2010
which has been U.S $71.41mn.whereas its imports from Philippines have reduced
which has been U.S $ 4.19 MN as compared to U.S $11.21 MN in 2008-09.
India is having great opportunities for doing business with developed
economies like china and other European countries. So it is likely to deal less with
Philippines in iron and steel products.
[76]
It has been estimated that world consumption is going to double in next 25
years and so improved quality of Indian steel along with low cost advantages is
going to help it explore export opportunities.
4.1.4 Potential for import / export in India for Airports:
Passenger along with cargo traffic is growing at over 20% each year and
crossed 100 million passengers annually in 2010 and cargo traffic of 3.3 million
tones.
4.2 Business opportunities in infrastructure sector in Philippines
The immense potential of the Philippines infrastructure sector will be one of
the biggest attraction for the investors, as mentioned by a high-ranking financial
executive named Jose Isidro, and also told that the domestic and foreign players will
surely invest in power, transport and utilities as well as other infrastructure-related
areas.
4.2.1 ICT Sector:
Following points indicates the future scope in ICT sector in Philippines:
1. Wireless and broadband technology and services
2. Applications for social media and Web-enabled devices
3. Call centre management software and other solutions for BPOs
4. ERP and other e-business applications such as supply chain, CRM and
database
5. Content and solutions for mobile phones including games and e-
payment
Moreover, there has been an increase in the ICT related applications like:
• Mobile based payment
• Health and medical tourism – providing medical services to remote areas
through ICT services
• Government – providing software solutions for proper governance and
administration
[77]
• Education and social media- providing marketing and analytical tools to
businesses for future decision making.
4.2.2 Power Sector:
. The infusion of fresh capital and firming up of financial commitment from the
industry players and stakeholders are essential factors in realizing the energy sector
goals. Table below shows estimated Giga Watt capacity for geothermal, wind, hydro, and biomass
for 5 Asian countries.
Liquefied natural gas is a practical solution for power fuel in the country. Its trade is a very
large business – with countries like China, South Korea, and Japan as the largest markets. 4.3 Business opportunities in infrastructure sector in India
. The increasing population in India and its flourishing economy are
generating significant pressures to revise and develop India’s infrastructure. The
formation of excellent quality of infrastructure would need huge investments in
referring the shortage in quality as well as quantity. More than 475 US Billion Dollars
appealing investment is to come to India’s infrastructure by 2012. With the above
mentioned investments Indian infrastructure would be at par to world best by 2017.
During next five years, investment in India in infrastructure in some key sectors are
(at recent prices): renovation of highways -US$ 75 billion, growth of civil aviation
US$ 12 billion, growth of Irrigation system- US$ 18 billion, advancement of Ports-
US$ 26 billion, progress of Railways- US$ 71 billion, improvement of Telecom- US$
32 billion, expansion of Power -US$ 232 billion.
5 Conclusion:
[78]
The Philippines is not investing significantly in physical infrastructure. Its
public sector infrastructure budget is much below the GDP. It also spends less on
education and health infrastructure. Corruption has been a persistent problem in the
Philippines. Reports of corruption remain common despite recent governmental
efforts to enhance transparency and accountability. Foreign and domestic investors
express concern over the propensity of Philippine courts and regulators to drift
beyond problems of legal interpretation into the policy making and about the lack of
transparency in these processes.
6 Recommendations:
• Increase transparency and also try to mitigate corruption as well as
controversy over infrastructure projects.
• There is a need for an extensive higher-speed broadband network as
the Philippines’ broadband infrastructure is insufficiently robust
• Government should accelerate planning and encourage investment in
infrastructure projects
HEALTHCARE
We can define the healthcare sector as, “It is a category of stocks relating to medical
and healthcare goods or services. The healthcare sector mostly includes hospital
management firms, health maintenance organizations , biotechnology and a variety
of medical products.”
We can also explains 'Healthcare Sector' as, Stocks in the healthcare sector are
frequently considered to be self-protective because the products and services are
essential. Even for the period of economic downturns, people will still have need of
medical aid and medicine to overcome illness. Having a constant require for goods
and services makes this sector less sensitive to business cycle fluctuations.
Source : www.investopedia.com/terms/h/health_care_sector.asp
[79]
The health care industry is a sector inside the economic system which provides
goods and services to treat all patients with curative, preventive, rehabilitative,
palliative, or at times, needless care. The current health care sector is divided into
many sub-sectors, and it depends on interdisciplinary teams of skilled professionals
and Para professional to meet up health needs of individuals as well as the
populations. In today’s world we can say that, the health care industry is one of the
world's major and fastest-growing industry. It consuming over 10 % of gross
domestic product (GDP) of most urbanized nations, health care can form a huge
fraction of a country's economy.
Background:
For the purpose of finance and management, the health care industry is classically
separated into a number of areas. As a fundamental structure for defining the sector,
the United Nations International Standard Industrial Classification (ISIC) categorize
the health care industry as below:
1. hospital actions
2. medical and dental observe activities
3. "Other human health behavior ".
This “other human health behavior ” basically involves activities of, or activities done
below the direction of nurse , midwives, physiotherapists, scientific or diagnostic
laboratories, pathology clinics, residential health services , or other related health
professions, e.g. in the meadow of optometry, hydro therapy, medical massage,
yoga therapy, music therapy, work-related therapy, speech therapy, chiropody,
homeopathy, chiropractics, acupuncture, etc.
The worldwide Industry categorization Standard and the Industry categorization
Benchmark further make a division into two main groups as below :
1. health care tools and services; and
2. Pharmaceuticals, biotechnology and linked life sciences.
[80]
Health care tools and services generally include company and entity that offer
medical tool , medical supplies, and health care services like hospitals, home health
care providers, and nursing homes.
The second industry group pharmaceuticals, biotechnology & linked life sciences comprise sectors companies that construct biotechnology,
pharmaceuticals, and various scientific services related to health & life.
There are some other key approaches related to health which define the scope of
healthcare industry. They are mainly, education & training of health professionals,
the regulation & management of health services delivery, the provision of traditional
& complementary medicines and finally the administration of health insurance.
Delivery of healthcare services :
The rescue of health care services is being done from primary care to secondary and
tertiary levels of care. It is the most observable part of any health care system for
both the users and the general public. There are lots of ways available to offer health
care in the present world. The set of release may be in the home, the community, the
workplace, or in health facilities. The mainly universal way of delivering a service is
face-to-face delivery, where care supplier and patient see each other. This is what
occur in universal medicine in the majority countries. However, with present
telecommunications technology, health care is becoming very common. This could
be helpful when practitioner and patient communicate with each other by the phone,
video conferencing, the internet, email, text messages, or any additional form of non-
face-to-face communication.
civilizing access, exposure and excellence of health services basically depends on
the manner the services are organized and managed, and on the incentives
influence provider and users. In market-based health care systems, for example in
the United States, such services are typically paid for by the patient or throughout
the patient's health insurance company. Other mechanisms contain government-
financed systems (such as the National Health Service in the United Kingdom). In a
lot of inferior countries, development aid, as well as funding throughout charity or
[81]
volunteers, help maintain the delivery and financing of health care services along
with large segment of the population.
ROLE OF HEALTHCARE SECTOR IN THE ECONOMY OF PHILLIPINES:
Healthcare was one of the priority sectors identified for accelerated economic
integration toward a single ASEAN market.13 In November 2004, the ASEAN Trade
Ministers adopted a Roadmap which was significantly concerned with promoting
trade in healthcare goods, such as pharmaceuticals and medical equipment. In
addition, two service sub-sectors in the healthcare industry have been specifically
targeted for progressive liberalization, namely, (a) the services of medical
professionals, including medical and dental professionals, midwives, nurses,
physiotherapists and paramedical personnel; and (b) health services, covering
hospital services (including psychiatric hospitals) and the services of medical
laboratories, ambulances, and residential health care other than hospitals.14 This
huge consumption value has attracted multinational corporations to engage in the
production and supply of various healthcare goods and services in the Asian market.
Healthcare goods. The giant pharmaceutical companies that operate in the sub-
region include Pfizer (USA), Johnson and Johnson (USA), GlaxoSmithKline (UK),
Bayer (Germany), Roche (Switzerland), Sanofi-Aventis (France), Novartis
(Switzerland), Astra-Zeneca (UK/Sweden), Abbott (USA) and Merck & Company
(USA). (See Annex 8 for full listing) The same listing shows that the drug industry is
a huge market, with the multinational companies gaining net incomes in billions of
US dollars and employing sizable workforces. The market is expected to remain big,
since all members of the ASEAN are net importers of pharmaceuticals and all, save
for Singapore, do not have research and development capability for drugs.15 In the
case of Singapore, its health authority is aiming for the country to become a centre of
excellence in ASEAN for biologics and biotechnological products.
HMOs. There are also Health Medical Organizations (HMOs), and medical care
equipment or technology suppliers, such as Philips Healthcare. The HMOs include
health insurance companies, such as AON AIG/AIU, CIGNA, and AXA. The first
[82]
three have their mother companies in the United States of America while AXA’s
mother company is located in France.
Medical professional services. Cross-border trade in medical professional
services predominantly happens through Mode 4, the movement of natural persons.
This mode of trans-border movement is overwhelmingly made up of individual
professionals, mostly female nurses and midwives that are hired as temporary
migrant workers by firms in another country. To a lesser degree, it also involves the
movement of medical employees to a country where their firms have set up overseas
operations. Recruitment of medical professionals for overseas work is a lucrative
business, and it takes place either through a government placement agency, private
recruiting firms or via direct hiring by foreign hospitals. As a result of the increased
deployment of female nurses and care-givers, the number of Filipino women working
overseas had exponentially increased to account for up to 70 percent of all overseas
contract workers deployed in a single year.17 Two of the largest source countries of
healthcare professionals who are deployed as temporary overseas workers in the
world are the Philippines and Indonesia, while the main destinations for these
individual professionals are the richer countries, including the relatively more wealthy
ASEAN countries of Singapore, Malaysia (which is also a source country), Thailand,
and to a lesser extent, Brunei.
Health services. These are primarily facilities-based services that cross borders
through foreign-investment in hospitals and other health facilities and medical
services. Within the ASEAN, Singapore and Thailand have led other countries in
setting up joint ventures with hospitals. The key players are the Parkway Group
Healthcare (Singapore) and two Thai companies, namely, Bumrungrad Hospital and
Bangkok Hospital.19 ASEAN governments try to attract foreign investment in
hospitals and other healthcare facilities as a strategy linked to their health tourism
plan, which is meant to attract the upper and middle class individuals from other
countries, or from richer ASEAN countries, to utilise health services in their
countries. The medical tourism industry in Asia is being catalyzed by the Medical
Tourism Association (MTA), a US based non-profit organization that is aiming to set
global standards for this industry. Health services tourism has become big in
Singapore, Thailand and Malaysia. This has also motivated lower income countries,
[83]
such as, Cambodia, the Lao People’s Democratic Republic, and Vietnam, to be
relatively lax in allowing foreign hospitals to operate in their countries. Medical
transcription services firms have also begun to spring up. As of 2004, there were 25
firms owned by US investors in the Philippines, where medical college graduates
waiting to take their board examinations, provide medical transcriptions to foreign
clients.
Medical, Dental & Nursing Schools. An allied development has been the rapid
development of medical, dental and nursing schools throughout the region, which
provides training for health professionals.22 Some of those who had taken up
nursing degrees and left to work overseas as nurses were actually licensed Filipino
doctors who could not find good pay in their home country.23 This phenomenon of
“nurse- medics” needs to be further investigated and may not only be taking place in
the Philippines.
1.2 STRUCTURE, FUNCTION & BUSINESS ACTIVITIES OF HEALTHCARE SECTOR:
Mainly the structure of healthcare sector is divided into two basic care.:
(1) primary care
(2) Secondary care.
Medical tourism
[84]
Medical tourism which includes medical travel, health tourism or universal health
care. It is a term which is originally coined by travel agencies and the mass media
to explain the rapidly-growing practice of travelling crosswise international
boundaries to acquire health care & healthcare services.
Such services normally comprise optional procedures as well as compound
specialized surgeries like, joint replacement (knee/hip), cardiac surgery, dental
surgery, and cosmetic surgeries. Yet, practically all type of health care, together with
psychiatry, option treatments, recovery care and even memorial service services are
provided. As a matter-of-fact, providers and customers usually use familiar channels
of communication-connection-contract, and in such cases this tend to mean not as
much of rigid or legal mistake to assure quality and less formal option to repayment
or redress, if it is needed.
More than 50 countries have recognized medical tourism as a countrywide industry.
However, official approval and other events of quality differ widely across the world ,
and there are risks and moral issue that make this method of access medical care
hot . Also, some destination may become dangerous for medical tourists to think .
The delivery of modern health care depends on groups of trained professionals and
Para professionals coming together as teams. This includes professional in
medicine, nursing, dentistry and related health, plus a lot of others such as
community health practitioners, community health staff and assistive personnel, who
methodically offer personal and population-based protective , healing and
rehabilitative care services.
While the definition of the a variety of health care differ depending on the different
cultural, political, organizational and disciplinary perspective , there appear to be
some agreement that primary care constitute the first part of a ongoing health care
process, that may also include the condition of secondary and tertiary level of care.
Primary care
Primary care is the word for the health care services which play a part in the limited
community. It refers to the work of health care professional who perform as a first
[85]
point of session for all patients within the health care system. Such a professional
would normally be a primary care physician, such as a ordinary practitioner or family
physician, or a non-physician primary care provider, such as a physician supporter or
nurse practitioner. Depending on the area , health system association , and
occasionally at the patient's discretion, they may see an additional health care
professional first, like a pharmacist, a nurse (such as in the United Kingdom), a
clinical administrator (such as in parts of Africa), or an ayurvedic or other
conventional medicine professional (such as in parts of Asia). Depending on the
character of the health condition, patients may afterward be referred for secondary or
tertiary care.
Primary care involve the wide possibility of health care, including all ages of patients,
patients of all socioeconomic and geographic origins, patients looking for to maintain
best health, and patients with all manner of keen and chronic physical, mental and
social health issue , including multiple chronic disease. Consequently, a primary care
practitioner must have a wide wideness of information in many areas. stability is a
key feature of primary care, as patients usually prefer to check with the same
practitioner for regular check-ups and defensive care, health education, and every
time they require an first consultation about a new health problem. The International
Classification of Primary Care (ICPC) is a identical tool for understanding and
analyzing information on intervention in primary care by the cause for the patient
visit.
Ordinary chronic illness usually treated in primary care may include, for example:
hypertension, diabetes, asthma, depression and anxiety, back pain, arthritis or
thyroid dysfunction. Primary care also include many fundamental caring and child
health care services, such as family planning services and vaccinations.
In context of worldwide population aging, with increasing numbers of older adults at
superior risk of constant non-communicable diseases, quickly increasing require for
primary care services is expected around the world, in both urbanized and rising
countries. The World Health Organization attribute the condition of necessary
primary care as an important component of a complete primary health care strategy.
[86]
Secondary care
Secondary care is the services of health care which is being offered by medical
experts and other health professionals who generally do not have primary contact
with patients, like, cardiologists, urologists and dermatologists.
It includes sensitive care like, required treatment for a short period of time for a brief
but severe illness, injury or other health condition, such as in a hospital urgent
situation department. It also includes expert attendance during childbirth, severe
care, and medical imaging services.
The "secondary care" is occasionally used synonymously with "hospital care".
However numerous secondary care provider don’t necessarily work in hospitals,
such as psychiatrists, clinical psychologists or physiotherapists, and some primary
care services which are delivered within hospitals. As per the association and
policies of the nationalized health system, patients may be necessary to see a
primary care provider for a move before they can right to use secondary care.
CHAPTER - 2 India and Philippines Trade Relation: India and Philippines Signed a Trade Agreement in 1979. Growth of cooperative
trade between the two countries had been deliberate till the late 1990, but has picked
up in the last few years. stability of trade has been heavily in favour of India. Trade
however still residue below its Potential. However the visits by the Indian President
(February 2006) and then the Indian PM (January2007) to the Philippines and later
by the Philippines President to India (October2007), have acted as a motivation to
[87]
two-sided trade and Investment links. Present (2009-2010) bilateral trade between
India and Philippines in US $1061.84 million of which US $ 748.77 million form
Indian Exports to the Philippines and US $313.07 million is mechanism of India’s
imports from the Philippines.
Bilateral Trade Statistics (Value in million US $)
2003-
2004
2004-
2005
2005-
2006
2006-
2007
2007-
2008
2008-
2009-
2009-
2010
India’s
Exports
%
Growth
321.53 412.23
(+28.21%)
490.56
(+20%)
582.09
(+17.67%)
618.65
(+6.23%)
743.77
(+19.90%)
748.77
India’s
Imports
%
Growth
122.11 187.39
(+53.46%)
235.49
(+25.67%)
167.25
(-28.98%)
204.64
(+22.36%)
254.77
(+24.55%)
313.07
Total
Trade
443.64 599.62
(+35.16%)
730.15
(+21.76%)
749.34
(+2.63%)
823.29
(+9.87%)
998.54
(21.05%)
1061.84
(+6.33%)
Indian Investments in Philippines Healthcare Sector:
Pharma companies including Dabur Pharma, Torrent, zydus Cadila, Ranbaxy
Laboratories and Claris Life sciences have subsidiaries / representative
offices in Manila to promote their Products.
M/s Lupin Limited of India acquired a Majority stake of 51% in the Local
Pharmaceutical Company, M/s Multicare Pharmaceutical Philippines, Inc in
March 2009. Lupin Limited Procedure generic and branded formulations and
APIs for the developed and developing markets of the world and has a
Presence in Anti-TB, Diabetes, Asthma segments etc.
India- Philippines Exports Relations: Contact Address:
[88]
International Trade Resource Center (ITRC)
Trade and Information Assistance Group (TIAG)
Bureou of Export Trade Promotion (BETP)
Ground Flr. DTI International Bldg, 375, sen. Gill Puyat Avenue,
Makati city 1200 Philippines
Phone: +632890-4660
TeleFax: +632890-4721
www.itrc.dti.gov.ph
Philippine Export Development plan: (PEDP) The PEDP for 2008-2010 is now Undergoing regional Consultations. It has gone
through the Sectoral Consultations applying the tool on Value-chain analysis to come
up With the Strategies to develop and promote the exports of the revenue Streams.
The PEDP is rolling three year plan, which defines the annual and medium term
exports thrusts, strategies, Programs and Project. It is implemented by the
government, exporters and other concerned sectors. It is prepared by the DTI in
cooperation with the Export Development Council (EDC) and the Philippine
Exporters confederation, Inc (PHILEXPORT) Project on Partnership and advocacy in
competitiveness and trade.
EXPONET Agency provides information on Exporter: Export seminar schedules
Export organizing
Export Procedure and documentation
Import policies for Exporter
Buyer linkages
Export financing and Incentives
Product and material Sourcing
Statistical Information
India and Philippine Export Data: (1) Overall Exports to Philippines till date 28/04/2012
[89]
Date:
28/04/2012
Values in
Rs. Lacs
Sr.No Country 2010-2011 % Share 2011-2012
(Apr-Jun)
% Share
1 PHILIPPINES 401,240.74 0.3511 104239.24 0.3205
India’s total
Export
114,264,897.18 32,525,048.92
(2) Healthcare Exports From India to Philippines:
Value in Million US
$
Sr.No HS
Code
Product/
Commodity
2003-
2004
2004-
2005
2005-
2006
2006-
2007
2007-
2008
2008-
2009
2009-
2010
1 30 Pharmaceutical
Products
19.36 14.02 22.19 25.18 30.01 39.65 49.15
Current Year Healthcare Exports from India to Philippines:
Values. In
RS Lacs
Sr.No HS Code Commodity 2010-2011 2011-
2012(Apr-Jun)
1 30 Pharmaceutical
Products
30,098.82 7054.28
Gujarat Companies Export Healthcare Products in Philippines: Company Name: Prince care Pharma PVT Ltd- India
[90]
Products: Food supplements, pain care products, Pain relief oil, pain balm, pain
care ointment, Beauty care Products, Cold cream, digestive candy, nasal inhaler,
Personal care Products, energy drink etc.
Address: 5, city center complex, kalanala, Bhavnagar, Gujarat, India
Website : www.princare.net
India-Philippines Import Relation: The Bureou of Import Services facilitates imports, administers import regulation on
selected items and monitors the importation of Liberalized and sensitive items. It
initiates and Contact Preliminary investigations on dumping, Countervailing and
safeguard protests.
Contact Information: Bureau of Import Services
3F Tara blg, 389 Sen.Gil Puyat Ave, Makati City
Directors Office
Tel.Nos: (+632) 8964431 or 9868972
Bureau of Import Services Flowchart:
[91]
India and Philippines Import Data: (1) Overall Import to Philippines till date 28/04/2012
Date:
28/04/2012
Values in
Rs. Lacs
Sr.No Country 2010-2011 % Share 2011-2012
(Apr-Jun)
% Share
1 PHILIPPINES 195046.60 0.1159 49332.95 0.0912
India’s total
Export
168346695.57 54120658.61
Healthcare Import from Philippines to India:
Values. In
RS Lacs
Sr.No HS Code Commodity 2010-2011 2011-2012
(Apr-Jun)
1 30 Pharmaceutical
Products
42.14 224.13
Prohibited Import Products: List of Regulated Import Commodities and Administering Agencies / bureau:
Government Agencies/ Issuing Permits/Clearance/legal Basis
Commodity Description/ Commodity Group/ Tariff Heading (TH)
Philippine Drug Enforcement Agency
(PDEA) and Dangerous Drugs Board
(DDB)
Republic Act(RA) No 9165 ( The
comprehensive Dangerous Drugs Act of
2002) dated 7 June 2002
Essential chemicals & controlled
precursors and Dangerous Drugs
(Getamine, Psedoephedrine, oripavine
and Amineptine).
Department of Health Bureau of Food and Semi Synthetic antibiotics ( all form and
[92]
Drugs (DOH-BFAD)
Executive order No 776. Dated 24
February 1992 and Bureau circular No-03
As 2000
R.A. No 8976 ( Philippine Food
Fortification Act of 2000) dated 7
November 2000
salts of ampicilin, amoxicillin and
cloxacilin)
Wheat Flaour/ TH 1101
R.A. No 8172 (An Act for salt Iodization
Nationwide ASIN) dated 20 December
1995
Iodized Salt/TH 2501
Philippines, India reaffirm Partnership in health services, medicine, global healthcare travel: Health Secretary Enrique Ona and Indian Ambassador to the Philippines Shri
Yogendra Kumar reaffirmed the cooperation between the Government of Republic of
the Philippines and Government of the Republic of India on matters of improving the
State of Healthcare in both countries during the 1st Philippine Global Healthcare
Forum at the National Kidney and Transplant Institute (NKTI).
India and Philippines are working together under a memorandum of understanding to
exchange knowledge, expertise and training in various areas of Healthcare and
medicine for their mutual benefit. These are Include:
Medical Education.
Public Health.
Hospital Management.
Health Tourism.
Drugs and Pharmaceutical Products.
Medical consumable Products.
Medical Equipment.
Communicable Disease Control and Surveillance.
[93]
Traditional and Alternative Medicine.
Business Opportunities in the Philippines
• Opportunities in the Philippines
Remarkably superb and happy with beautiful beaches and enthralling panoramic
sights the Philippines has been recognized as the Pearl of the Orient Seas because
of its copious natural resources. This made the Philippines on top of the world’s
famous most tourist destination in the past few decades.
You would love to feel and witness the romantic sunset as the sky tinted with
crimson, the hardly diffused light of the setting sun as twilight unfurl.
A number of tourists think they have been lucky to have settled in this tropical
country, taking pleasure in all the services and accessibility of the country. The
archipelago is a blissful place that anyone would wish visiting for. In the past years
the Philippines has been the country of preference for retirees from the western
countries for they believe that there are opportunities in the Philippines and a
great place to spend their retirement years.
• Business Opportunities in the Philippines
If you are business enthusiasts, there are a numerous of investment opportunities in the Philippines. Manila and Makati City are the centers of business and
investment. Makati City is the chief trade, financial, and economic center of the
Philippines. The Philippine Stock Exchange and the prominent Makati Business Club
are situated in this place. For this reason, the city is considered as the country’s
business capital. Makati is one of the cities that comprise Metropolitan Manila the
place of the national government. Generally the Philippines seize regional center
facilities similar to those in Southeast Asia, and considering a highly-educated
English-speaking workforce. Significantly, the growing consumer market of the
[94]
country is a primary factor of business investment in the country. There is large
domestic market base for consumer goods and a growing market for infrastructure
services and facilities. Apparently the Philippines’ is at a place for worldwide exports.
Large or small scale business opportunities in the Philippines are always open for
those who want to invest in the country.
• Foreign Investment Opportunities in the Philippines
Most of foreign investment opportunities in Philippines have been intensely
focused on export productions, utilities, mining, petroleum refining, and export-
oriented agriculture, with increase speed concentration in labor-intensive textiles,
footwear, electronics, and other non-traditional export industries.
The sprout of real estate business in areas where resorts and recreational venue is
viable has paved the way for Foreign Investment Opportunities in Philippines. Some
foreign retirees have invested a condominium at a resort area or properties operating
as Condotels, because a foreigner can take title to a condominium. The most
strategic favorite investment areas have been in Cebu, Subic, Puerto Galera, and
Boracay. Though, this type of investment requires a putting up of a huge sum of
cash as payment in full for the property.
• Health Care Opportunities in the Philippines
The recorded cases of drug addiction and undernourished in the Philippines has not
widely affect good quality of health care services in the country; however while it is
true that the facilities may not be as remarkable as those in modernized
sophisticated hospitals in the US yet there are a few Philippine Hospitals that can be
considered on top with regards to service and facilities. This includes the Medical
Center in Alabang, the Asian Hospital, the Makati Medical Center, the Medical City in
Ortigas, and St. Luke’s Medical Center in Quezon City.
The Philippines’ medical practitioners mostly are graduates from top universities in
the country, have specialized in their fields in United States medical schools as well,
practiced their medical profession in the US before sharing their expertise in the
Philippines. Even the Filipino nurses are also trained by nursing schools with the
[95]
best standards. It is a fact that most of the nurses working in the US and Europe are
Filipinos.
Health and medical care services and facilities are generally not that costly in the
Philippines. Medicines as well are very affordable and available. Many local folks
and foreigners can assert to the truth that medicines sold in the Philippines are very
much affordable as compared to the US price. Health and Medical opportunities in the Philippines are not just served to local folks alone, health and medical services
and facilities are offered to everybody local or foreign, rich or poor everybody has the
right and opportunity to avail and enjoy the benefits of the services and facilities.
Additionally, Communication is not a hitch when you are in the Philippines unlike in
some countries where most of the population does not speak English, in the
Philippines; almost ninety percent of their population can understand and speak
English well.
Consider the low cost of medicine and health care services in the Philippines to live
and settle in this country is not a thing to worry. The hospitality and friendly charm of
the people is irresistible. More so, the doctors and medical practitioners are
accommodating and cheerful to their patients. To look for an appropriate hospital in
the Philippines is not that hard since several numbers of choices are available.
Private and public health care institutions are options to consider too. Most of the
government or public hospitals offer quality healthcare the same way private
hospitals offers. (1)
References: http://www.opportunityphilippines.com/category/business-opportunities-
in-the-philippines-2/
Conclusion:
(1) Philippines have a Good opportunity in Healthcare sector.
[96]
(2) In the Medical Tourism Industry is a very less cost Medical Treatment in
compare of any Developing Countries. Ex. 83% to 84% savings in compare of
U.S.
(3) Philippines Healthcare sector is a very good opportunities in Health Insurance
Business.
(4) Philippines Pharmaceutical Business market share increasing so Indian
Pharma companies have a Good opportunity to start a Business on Public-
Private Partnership Basis or Joint Venture with any local companies of
Philippines
(5) Philippines Government have a support to Export Major Players and Giving a
export subsidies to Foreign Players.
(6) Philippines and Indian Government have also active to solve on Health
Related Issues:
• Medical Education.
• Public Health.
• Hospital Management.
• Health Tourism.
• Drugs and Pharmaceutical Products.
• Medical consumable Products.
• Medical Equipment.
• Communicable Disease Control and Surveillance.
• Traditional and Alternative Medicine.
(7) Philippines and India have a Partnership on to share the knowledge of
Medical Information; Let us Technology, R&D, Innovation in Medical.
(8) In Philippines is main advantage of Cheap Labour to work on industry in
Philippines to helpful to foreign Player to cost cutting.
[97]
OVERVIEW OF NATURAL RESOURCE SECTOR INTRODUCTION
The Philippines is rich in natural resources. It has fertile, arable lands, diverse
flora and fauna, extensive coastlines, and rich mineral deposits.
In Philippines basically following natural resources are used.
6) Water resources
7) Forest resources
a. Bamboo
b. Mangrove forest
8) Marine industry
9) Mining Industry
a. Mineral resources
10) Oil and gas industry
WATER RESOURCES
Water is a very useful element to our human life existence. Its role is vital in the
sustenance of all life forms, as well as in agricultural, industrial, households,
entertaining and environmental activities. As population continues to grow, so does
the demand for fresh water too. Water is a main factor shaping the natural
environment. It has a long-term influence on the vegetation, fauna, and shape of the
landscape and on various ecosystems.
• 1,830 sq kilometers of Philippine rivers and lakes cover 61% of the country’s
total land area
• 50,000 sq kilometers of groundwater reservoir is recharged by rain and
seepage from river and lakes
• 421 principal river basins, of which 20 are considered major river basins
• 79 lakes mostly utilized for fish production
• 86% of piped-water supply systems that use groundwater as a source
• 146 billion cu.m estimated amount of the country’s water supply
[98]
• 1.06 million lps surface water allocated for power generation in Region 2, the
largest in the entire country
• A survey of float up water storage possible has identified sites for 438 big
dams and 423 small dams
• As estimated 146,000 MCM total water resource potential
• 438 major dams and 423 smaller dams (total of 861 impounding dams and
reservoir sites) identified sites of water surface water storage potential
Source: www.denr.gov.ph
FOREST RESOURCES
Much of the Philippines are hilly areas and mountainous, with 52 % of its total land
area of 30 million hectares, correspondent to 15.8 million hectares, officially
classified as forestland managed by the Department of Environment and Natural
Resources.
The country has total land area of 30 million hectares out of which, around 53 % of it
is off the record as forestland, with slopes ranges more than 18 %.
Out Of the total forest area, open forest accounted for higher than half at 4.031
million hectares. The rest of the forest types contributed to the total as follows:
• Closed forest at 2.56 million hectares (35.71%),
• Plantation forest at 329,746 hectares (4.60%)
• Mangrove natural forest at around 247,309 hectares (3.45%)
Traditionally, the country was known to have one of the world’s rich tropical
rainforests. When the Spanish colonizers entered the archipelago in 1521, it was
reported that 90% of the country’s total land area or 27 million hectares were
enclosed with forest. About two years after the Americans alternate the Spanish
sometime in 1900; the country’s forest cover was recorded at about 70% or 21
million hectares.
In the 1990 Master Plan for Forestry Development (MPFD) prepared by the Forest
Management Bureau, it was expected that the total forest loss between 1934 and
[99]
1990 was about 10.9 million hectares, correspondent to an average annual loss of
194,000 hectares. There are around 3,000 tree species known to boom in the
country, with 96 of them known to have medicinal morals.
Source: www.denr.gov.ph
BAMBOO INDUSTRY
Bamboos are long-lived woody, evergreen grasses. These belong to the Family
Gramineae which include the grasses planted in lawns and such cereals as rice and
corn. There are 60 known bamboo species in the Philippines and their number is
increasing because of the newly-introduced species by plant collectors and bamboo
enthusiasts.
There are over a thousand different bamboos worldwide. Bamboos are used to make
fashionable furniture and handicrafts, musical instruments, as raw materials in
architecture and main ingredient for dishes. These are also considered as best
materials for the development of urban parks.
Bamboos are great for rehabilitating eroded slopes. They are also used as hedges,
live fences, and indoor and outdoor ornamentals.
Source: www.denr.gov.ph
MANGROVE FORESTS
Mangrove forest is also known as the “rainforest of the sea.” It grows well in tropical
countries, including the Philippines. Mangroves are an important part of the coastal
and marine ecosystem that includes the seagrass and the coral reefs. Of the world’s
more than 70 mangrove species, around 46 species are known to occur in various
parts of the country.
Mangroves provide economic as well as ecological benefits, such as the following:
• They are a good source of products like alcohol, medicine, tannin, charcoal,
timber and housing materials
• They support fisheries production and aquaculture;
• They provide nursery grounds, shelter and food for fish and other sea
creature;
[100]
• They protect coastal communities from storm surges, waves, tides and
currents;
• They act as carbon sink by reducing organic pollution along shore areas;
• They serve as recreational grounds for wildlife enthusiasts; and
• They stabilize the coastline by reducing erosion.
Source: www.denr.gov.ph
MARINE INDUSTRY
The Philippines, a country consisting of approximately 7,107 islands, boasts of
having a very long coastline with a length of 235,973 square kms, longer than that of
the United States. The country has three main island groups, Luzon, Visayas and
Mindanao which serves as the core of regional subdivisions upon which political and
economic development revolve.
The archipelagic nature of the country explains the natural affinity of its people to the
seas, either as the source of food or as a means of livelihood considering that there
are 55 coastal provinces out of 76 provinces in the Philippines. It is of no surprise
therefore that in almost all provinces and across the archipelago one can find
clusters of fisher folks, seafarers, boat builders, shipping operators and beach resort
owners/operators.
1. Domestic merchant fleet The country is deemed to be a compact country linked only by the complex sea
lanes that are established all throughout the archipelago. Shipping routes in the
domestic trade depending on the volume of cargoes is characterized as primary,
secondary or tertiary routes.
2) Overseas merchant fleet The Philippine merchant fleet engaged in international voyages had been decreasing
in the past seven years. The decline can be explained if one has to consider that the
country’s bottoms is seen not only as a means by which to service the transport
requirements of the Philippine foreign trade but also as an opportunity by which
employment can be generated for the Filipino seafarer.
MINING SECTOR The Philippine is ranked as 5th in world for mining potential ,though its having 9 million hectares ,its having only 2% mining permits ,also its having an estimated us $
[101]
1.4 tn in reserves.There was a long period which was stagnant but now the sector is coming back,with a world-class legal framework for sustainable development. . Minerals progress is a top government main concern and has great probability for jobs and income. It is recognized by Government over 60 priority PPP projects. This sector can hold up poor rural areas by providing high quality jobs and society development. Considerable royalty and tax expenses is received by government .Yet, full growth of the sector continue to face important challenge. long, boring approvals for EPs keep on to obstruct investment. More than a few LGUs have stopped up their provinces to mining. The mining Industry is worried that the Writ of Kalikasan may disturb legal activities. When the land is ancestral land for an investor it is not easy to say it. mineral Tons(mn) Average grade Value (us$B) Gold 3869 2.68 367 copper 5051 0.9 318 nickel 783 2.62 328 chromite 38 24.55 1 Iron 483 42.05 103 manganes 3 45.31 0.1 Aluminium 434 27.5 263 Zinc 11.4 2.66 1 molybdenum 306 0.08 6 Total 1387
Table 3: Mining Data
MINERAL RESOURCES: There are basic two types of mineral resources.
Metallic and non-metallic
Metallic
minerals
Chromium Copper gold Iron
ore
lead Manganese silver Zinc
Non-
metallic
minerals
Asbestos Clay Coal gas Lime
stone
Oil salt Sand
Minerals are natural substances, which comprising “non-living element, which have
an arranged internal structure and individuality, chemical work of art, crystal form,
and objective properties”. Any attention of these minerals, with a potential economic
value that can be extracted at a profit, is measured a mineral resource.
[102]
Table 4: Exports of common metallic minerals extracted in the Philippines (2010):
Category Mineral FOB (in million USD)
% of Total Value
Precious Metals Gold 16.62 5.35 Silver 2.55 0.82 Base Metals Copper 7.41 2.39 Iron &Ferro-Alloy Metals Nickel 276.42 89.06
Chromite 7.39 2.38
Estimated value of Philippine mineral reserves (US$BN) TOTAL MINERALS EXPORT US$
Mining products exports distribution, 2009
[103]
The government has recognized over sixty mineral projects with key mineral
deposits all over the country. The projects are separated into
(a) operating/expansion stage (12)
(b) First tier priority projects construction/development stage (8)
(c) feasibility/financing stage (9)
(d) Advanced exploration stage (11)
(e) Second tier priority projects (3)
(f) Priority exploration projects (22)
OIL AND GAS INDUSTRY Oil industry of Philippines has been deregulated from 2010. It is currently conquered
by two major oil refining and marketing companies; 1. Petron & 2. Pilipinas Shell.
Another oil refiner and marketer named Caltex Philippines Inc, who transformed its
86,500 bbl/d refinery into an import workstation in 2011; it now run as a marketing
and distributing company under the name Chevron but maintain its Caltex brand.
Oil - production: 33,110 bbl/day (2010 est.)
This entry is the total oil produced in barrels per day (bbl/day). The discrepancy
between the amount of oil produced and/or imported and the amount consumed
and/or exported is due to the omission of stock changes, refinery gains, and other
complicating factors.
Source: CIA World Factbook - Unless otherwise noted, information in this page is
accurate as of January 9, 2012
[104]
Oil Imports
This data is the total oil imported in barrels every (bbl/day), including crude oil as well
as oil products.
Country 2003 2005 2007 2011 Philippines 312,000 355,800 342,200 338,400
Oil Exports
This entry provides the total US dollar amount of merchandise exports on an f.o.b.
(free on board) basis. These figures are calculated on an exchange rate basis, i.e.,
not in purchasing power parity (PPP) terms
Country 2006 2007 2008 2009 2010 Philippines 41.25 47.2 48.2 37.51 50.72
GAS: In the South China Sea, northwest to 80 kms of Palawan, Malampaya Deep Water
Gas to Power Project extracting gas from reservoir located 3000 mtrs below sea
level. The gas flows through 5 sub-sea well heads to a diverse in 820 mtr water
depth, 230 kilometer flow lines to be low water production platform gas is dried. The
dry gases is then delighted through a 504 kms sub-sea pipeline starting the platform
in offshore to onshore gas plant where gas is further process with the removal of
hydrogen sulfide and finally deliver 3 combined-cycle gas turbine power plants.
This natural gas is used fuel for 3 power plants, which provides up to 2700 MW of
electricity, representing 25% of installed capacity of Luzon grid. Gas production from
January to May 2006 reaches 42.3 billion cubic feet while condensate production
totaled 2.1 million barrels.
[105]
INDIA PHILIPPINESTRADE RELATIONS
1. TRADE India and the Philippines signed a Trade Agreement in 1979. Growth of mutual trade
among the two countries had been measured till the overdue 90s, but has picked up
in the last few years. Balance of trade has been heavily in favor of India. Trade
however still remains below its potential. However, the visits by the Indian President
(February 2006) and then the Indian PM (January 07) to the Philippines and later by
the Philippines President to India (October 07), have acted as a stimulus to bilateral
trade and investment links. currently (2009-2010) mutual trade between India and
the Philippines is US$ 1061.84 million of which US$ 748.77 million forms Indian
exports to the Philippines and US$ 313.07 million is the component of India‟s
imports from the Philippines
(Source: Department of Commerce, Government of India).
Major products of Indian exports are: Frozen buffalo meat (12.24%), iron and
steel (9.53%), vehicles (8.21%), oil seeds and olea etc (8.05%). rubber and articles
thereof (6.85%), pharmaceutical products (6.56%), electrical & electronic machinery
(6.20%), organic chemicals (3.91%) etc.
• The percentages shown in brackets is the share of the item to the total
value of exports from India in the year 2009-10
Major products imports from Philippines are: electrical and electronic machinery
and equipment (41.52%); mineral fuels and mineral oils (14.77%); newsprint paper
and paperboard (10.10%); vehicles (6.99%); optical instruments (3.18%); etc.
• The percentages shown in brackets is the share of the item to the total
value of imports by India in the year 2009-10
Source: http://www.embindia.org.ph
[106]
Source: http://commerce.nic.in/eidb/iecnt.asp
In above table data of total export and import and growth rate is shown from the
period of 2006-07 to 2010-11. By taking 2006-07 as a base year export as well as
import are increases every year except 2009-10.
Total trade is increases from US$ 747.77million to US$1312.12millions from 2006-07
to 2010-11, same way trade balance is US$ 414.19 millions, US$ 415.78 millions,
US$ 489millions,US$ 435.7millions,US$453.35 millions from 2006-07 to 2009-10
respectively.
India Export Import Data with Philippines Values in US $ Millions Country: PHILIPPINES S.No. Year 2006-07 2007-08 2008-09 2009-10 2010-11 1 EXPORT 580.98 620.32 743.77 748.77 882.74 2 %Growth 6.77 19.9 0.67 17.89 3 India's Total
Export 126,414.05 163,132.18 185,295.36 178,751.43 251,135.89
4 %Growth 29.05 13.59 -3.53 40.49 5 %Share 0.46 0.38 0.4 0.42 0.35 6 IMPORT 166.79 204.54 254.77 313.07 429.39 7 %Growth 22.64 24.55 22.88 37.15 8 India's Total
Import 185,735.24 251,654.01 303,696.31 288,372.88 369,769.13
9 %Growth 35.49 20.68 -5.05 28.23 10 %Share 0.09 0.08 0.08 0.11 0.12 11 TOTAL
TRADE 747.77 824.87 998.54 1,061.84 1,312.12
12 %Growth 10.31 21.05 6.34 23.57 13 India's Total
Trade 312,149.29 414,786.19 488,991.67 467,124.31 620,905.02
14 %Growth 32.88 17.89 -4.47 32.92 15 %Share 0.24 0.2 0.2 0.23 0.21 16 TRADE
BALANCE 414.19 415.78 489 435.7 453.35
17 India's Trade Balance
-59,321.19 -88,521.83 -118,400.95
-109,621.45
-118,633.24
Table 5: Import/export data
[107]
[108]
INDIA IMPORT DATA FROM PHILIPPINES IN NATURAL RESOURCE SECTOR
S.No. Commodity 2008-2009 2009-2010 %Growth
1 Live Trees And Other Plants, Bulbs, Roots And The Like, Cut Flowers And Ornamental Foliage.
30.00 6.20 -79.35
2. Oil Seeds And Olea. Fruits, Misc. Grains, Seeds And Fruit, Industrial Or Medicinal Plants, Straw And Fodder.
160.36 285.59 78.09
3. Mineral Fuels, Mineral Oils And Products Of Their Distillation, Bituminous Substances, Mineral Waxes.
19,373.81 22,364.77 15.44
4. Wood And Articles Of Wood; Wood Charcoal.
21.04 46.35 120.29
5. Articles Of Stone, Plaster, Cement, Asbestos, Mica Or Similar Materials.
454.89 144.80 -68.17
6. Natural Or Cultured Pearls, Precious Or Semiprecious Stones, Pre.Metals, Clad With Pre. Metal And Artcls Thereof,Imit. Jewlry, Coin.
1.01 3.92 289.88
7. Iron And Steel 5,184.15 2,004.81 -61.33 8. Articles Of Iron Or Steel 434.53 567.28 30.55 9. Copper And Articles Thereof. 504.60 190.97 -62.15 10. Aluminium And Articles Thereof. 284.90 309.17 8.52
11. Lead And Articles Thereof. 554.02 22.66 -95.91 12. Zinc And Articles Thereof. 260.01 353.50 35.96 13. Tin And Articles Thereof. 0.09 14. Other Base Metals; Cermets;
Articles Thereof. 1.29
15. Miscellaneous Articles Of Base Metal.
78.00 213.72 173.99
Source: Http://commerce.nic.in/eidb/Icntcom.asp
[109]
INDIA EXPORT DATA FROM PHILIPPINES IN NATURAL RESOURCE SECTOR S.No. Commodity 2010-2011 2011-
2012(Apr-Jun)
1 Fish And Crustaceans, Molluscs And Other Aquatic Invertabrates.
230.73
2 Products Of Animal Origin, Not Elsewhere Specified Or Included.
143.44 105.42
3. Live Trees And Other Plants; Bulbs; Roots And The Like; Cut Flowers And Ornamental Foliage.
8.88 1.50
4 Oil Seeds And Olea. Fruits; Misc. Grains, Seeds And Fruit; Industrial Or Medicinal Plants; Straw And Fodder.
25,470.90 8,519.41
5. Mineral Fuels, Mineral Oils And Products Of Their Distillation; Bituminous Substances; Mineral Waxes.
2,352.92 580.29
6. Wood And Articles Of Wood; Wood Charcoal. 74.95 41.87
7. Articles Of Stone, Plaster, Cement, Asbestos, Mica Or Similar Materials.
729.29 209.28
8. Natural Or Cultured Pearls,Precious Or Semiprecious Stones,Pre.Metals,Clad With Pre.Metal And Artcls Thereof;Imit.Jewlry;Coin.
33.82 12.59
9. Iron And Steel 7,710.98 2,426.65 10. Articles Of Iron Or Steel 9,445.66 3,247.35 11. Copper And Articles Thereof. 4,229.00 1,089.98 12. Nickel And Articles Thereof. 38.03 2.37 3. Aluminium And Articles Thereof. 3,275.10 368.48 14. Lead And Articles Thereof. 8.06 18.28 15. Zinc And Articles Thereof. 678.89 16. Other Base Metals; Cermets; Articles Thereof. 161.42 17.90
Source: http://commerce.nic.in/eidb/ecntcom.asp
[110]
2. INVESTMENTS India and Philippines signed an Agreement on evasion of Double Taxation and
avoidance of Fiscal Evasion in 1990, and an Agreement for Promotion and
Protection of Investments in 2000. Investments of India in the Philippines are mostly
in the areas of textiles business, garments, IT& ITes, steel, chemicals and
pharmaceuticals. Philippine investments in India are in telecommunications, IT, real
estate and reprocessing of waste and human resource development (management
education). Following is the list of major investments between the two countries:
INDIAN INVESTMENTS IN PHILIPPINES:
• Indo-Phil Textiles: A joint venture of Birla Group, established in 1975 is primarily
engaged in manufacture of yarn.
• Global Steel Philippines Inc. of the Ispat Group, in Iligian City, Mindanao
province, with a capacity of 1.2 million hot/cold rolled coils. Total investment is
Peso 13 billion (US$ 245 million) payable over a period of 8 years. The plant,
which is also the largest steel plant in the Philippines, was inaugurated in
February 2004 and has been exporting cold and hot rolled coils. A new product –
steel plate – has recently been added to their product line.
• Bio-seed Research Philippines, belonging to DSCL Group, has been present in
General Santos City, Mindanao, for the last 15 years. They produce seeds of
corn, cotton, rice and hybrid vegetables and market them in the country. They
also have research facilities for these seeds.
• HTMT BPO Center, belonging to Hinduja Group has been operating since 2003.
• Aditya Birla Group acquired an idle chemical plant in Jose Panganiban,
Camarines Norte. The plant has been producing oleo-chemicals from coconut for
use in detergents, pharmaceuticals and cosmetics.
• Garment manufacturing plants – there are a large number of these set up by
Indians and persons of Indian origin in Philippines. Some of them have closed
down following the end of textile quota
[111]
• Pharma companies including Dabur Pharma, Torrent, Zydus Cadilla, Ranbaxy
Laboratories and Claris Lifesciences have subsidiaries/rep offices in Manila to
promote their products.
• Aptech Limited has one franchisee computer training center in Bacolod and one
multimedia training center in Manila. They are in discussions for setting up more
such centers in the Philippines.
• Aditya Birla Minacs (ABM), of Adita Birla Group, opened a BPO unit in Manila in
August 2007.
• While several IT companies from India have already set up BPO operations in the
Philippines and these include companies like WIPRO (recently opened its BPO
operations in Cebu), TCS, L&T Infotech, Genpact, Infosys, Intelenet; some others
like HCL, Tech Mahindra etc. are planning to set up operations.
• Aegis BPO, part of India‟s Essar Group has acquired a California-based
outsourcing firm, People Support Inc (Philippines) at a price of $250 million.
• M/S Lupin Limited of India acquired a majority stake of 51% in the local
pharmaceutical company, M/s Multicare Pharmaceuticals Philippines, Inc in
March, 2009. Lupin Limited produces generic and branded formulations and APIs
for the developed and developing markets of the world and has a presence in
Anti-TB, Diabetes, asthma segments etc.
Source: www.embindia.org.ph
PHILIPPINE INVESTMENTS IN INDIA:
• J.V. Merida Ecological Industries: This joint venture was set up in 2001 in
Bangalore, India, for processing of waste.
• Ayala Group teamed up with L&T for consultancy for construction of the Howrah
road bridge.
• Philippine Wireless Inc. - Usha India Ltd: Set-up in India in 2000, the joint venture
was primarily engaged in providing paging services.
• SPI Technologies Inc. (since taken over by e-PLDT), a provider of IT-enabled
business process outsourcing solutions, expanded book services capabilities in
India through the acquisition of Kolam Information Services in 2003.
[112]
• ZMG Signium War Howell of Philippines has set up an Indian subsidiary in
Mumbai in 2003 – the company operates internet cafes and on-line video
gaming.
• Ayala Group‟s BPO Company, LiveIT Solutions Inc., has acquired majority
shareholding in Integreon Managed Solutions Inc. which has operations in the
USA and India. LiveIt also invested in e-Telecare and acquired (100%) Affinity
Express which have operations both in USA and India.
• Ayala Land has tied up recently with the Mahindra Group in developing a
township in Chennai.
• Del Monte, Philippines has concluded a JV with the Bharati Group for
investments in food processing plants in India.
Source: www.embindia.org.ph
PROJECTS EXECUTED BY INDIAN COMPANIES:
During the last few years, Indian companies have successfully executed some small
and medium-sized projects in the Philippines. These include:
KEC: This company implemented a contract for a 37 km. transmission line project in
Quezon in 1995; a US$ 3.4 mn. contract for supply of galvanised steel towers to
National Power Corporation project Negros IV - Panay IV in November 1997; and a
Single Circuit part of the “Supply & Delivery of 138 KV Single & Double Circuit for
Leyte Samar Transmission Line Project” in 1998. Kalpataru: Kalpataru Power Transmission Ltd. was awarded the Double Circuit part
of the Leyte Samar Transmission Line Project in 1998 which it implemented.
Kalpataru was again awarded the Sangali-Pitogo (Zamboanga City) transmission
line project in November 2005. Kalpataru won another contract for rehabilitation of
typhoon-damaged power transmission lines in Leyte in 2007. In the past few years
the company has undertaken and executed projects worth US$ 38 million. In March
2010 the company has been awarded a 230KV transmission line project on the
sector Abaga-Kirahon (in Mindanao). The project is worth US$26 million and has a
completion period of 450 days (15 months). The contract is effective as of 6th April
2010. The contract itself was awarded by the newly created National Grid
Corporation of the Philippines (NGCP).
[113]
Essar Oil: It was awarded a two-year contract in 1994 to bring in and operate a
drilling rig to enhance steam production in a geothermal project.
[114]
Source: www.embindia.org.ph
A REVIEW OF NATURAL RESOURCE POLICIES
INTRODUCTION The increasing degradation of natural ecosystems and rapid depletion of natural
resources have been recognized as significant contributors to the country’s
ecological and socioeconomic problems, and eventually led to incorporating
environmental dimensions into national development planning. National policies
were then developed and established for the integrated environmental protection
and natural resources management of the country. (1)
Sectoral legislation deals with three main sectors: natural resources
(forestry, fishery, and mineral resources) management and conservation,
pollution control, and land use planning and management – all of which relate in
one way or another to climate change. (2)
This section discusses some government actions, policies, and programs
in relation to climate change in the country. The main features of selected
Philippine policies on environment and natural resource management, and their
respective possible impacts relating to climate change is summarized in Table 8.
Table 8.Philippine Natural Resource Policies
Philippine Policies Brief Policy Description
Dec 1976: Presidential Decree No.1067 – The Water policy of the Philippines
Revises and consolidates the laws
governing the ownership,
appropriation, utilization, exploitation,
development,
conservation, and protection of water
resources
[115]
June 1977: Presidential Decree No. 1152 – Philippine Environment Code
Establishes specific environment and
natural resource management policies
and
prescribes environment quality
standards
June 1978: Presidential Decree No. 1586 – Establishment of the Environmental Impact Statement System of the Philippines
Pursues comprehensive and
integrated environmental protection
supporting socioeconomic
development
Dec 1985: Presidential Decree No. 2001 – Program to Withdraw the Use of Tetraethyl Lead (TEL) in Gasoline
To eliminate the use of tetraethyl lead
(TEL) in gasoline, in order to
safeguard human health against
poisoning from lead particulates in the
air
June 1988: Republic Act (RA) No. 6657 Comprehensive Agrarian Reform Program (CARP)
Promotes a more equitable distribution
and ownership of all public and private
agricultural lands; and provides
incentives to landowners to invest the
proceeds of the program in promoting
industrialization,
employment and privatization of public
sector enterprises
Local Government Code of 1991 Devolves central government
functions, such as the natural resource
management functions of the DENR,
to local government units (LGUs)
1997: Republic Act No. 8435 -- Agriculture and Fisheries Modernization Act (AFMA)
Prescribes a set of policies and
programs to modernize the Philippine
agriculture and
fisheries sectors
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1998: Republic Act No. 8550 - The Philippine Fisheries Code
Rational and sustainable development,
management and conservation of
fishery and aquatic resources in
Philippine waters
Presidential Decree 705 - - The Revised Forestry Code of the Philippines
Provides the country’s fundamental
forestry laws and policies; reinforced
the use of license/ lease agreements
to utilize natural resources
DENR Administrative Order No. 15-90 - Regulations Governing the Utilization, Development and Management of Mangrove Resources
To sustain optimum productivity by
conserving, protecting, rehabilitating
and developing remaining mangroves,
more with corporate collaboration than
individual initiatives
June 1992: Republic Act No. 7586 – National Integrated Protected Areas System (NIPAS) Act
Regarded as the main strategy in
biodiversity conservation through the
establishment of a comprehensive
system of integrated protected areas
1995: Executive Order No. 263 – The Community-Based Forest Management (CBFM) Program
Integrated and unified different upland
community programs and projects to
ensure the sustainable development of
forest land resources
1997: Republic Act No. 8371 – Indigenous People’s Rights Act
Recognize, protect and promote the
rights of indigenous cultural
communities to their ancestral
domains to ensure economic, social
and cultural well-being
March 1995: Republic Act No. 7942 -- Philippine Mining Act of 1995 and Presidential Decree 1899 –
Promotes rational exploration,
development, utilization and
conservation of all mineral resources,
and safeguarding the environment and
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Establishing Small-Scale Mining as a New Dimension in Mineral Development
protecting the rights of affected
communities
1999: Republic Act No. 8749 – The Philippine Clean Air Act
A comprehensive national
multispectral framework for an air
quality management program to
reduce GHG emissions
Aug2006: Green Philippine Highways Project
Involves planting more than 500,000
ornamental and forest trees along a
total of 3,439 kms. of major national
highways from north to south
Philippines
Jan 2007: Republic Act No. 9367 – Biofuels Act of 2006
Promotes the use of alternative
transport fuels
Feb 2007: Administrative Order No. 171 – Creation of the Presidential Task Force on Climate Change (PTFCC)
In general tasked to address the issue
of climate change, mitigate its impact,
and lead in adapting to these impacts
October 2007; Albay Declaration
Local government support to
mainstream climate change adaptation
to government
programs and activities
January 2008; Senate Bill 1890: Philippine Climate Change Act
An act establishing the framework
program for Climate Change, creating
the climate change commission,
appropriating funds therefore, and for
other purposes
Disaster Risk Reduction and Management (DRRM) Act of 2010
Provides for the development of
policies and plans and the
implementation of actions and
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measures pertaining to all aspects of
disaster risk reduction and
management
DENR Department Administrative Order (DAO) 2010-07 (2010)
Guidelines on the Continuing Phased
Devolution of Environment and Natural
Resources (ENR) functions to local
government units (LGUs)
Source: http://www.enrdph.org/policies/index.php (1) http://www.enrdph.org/policies/index.php (2) http://www.enrdph.org/policies/index.php
[119]
PROBLEMS AND PROSPECTS OF BUSINESS/ TRADE WITH PHILIPPINES
Incentives for new business:
• Philippines government offered lots of incentives to a foreign investor for
investing in the Philippines. Incentives like tax holidays, tax reduction for
labour expenses, and duty-free importation of capital equipment, and are
available for companies investing in preferred areas and registered with
the Board of Investments (BOI).
• In January 1995, to develop the loyalty of foreign investors the land lease
times were stretched. The lease contract can be completed for 50 years &
be rehabilitated once for next 25 years.
Restrictions:
• Restrictions on foreign membership are mentioned in negative lists shown
below. These lists are administered by the National Economic and
Development Authority (NEDA). The distribution into domestic and export
enterprises is an important when talking related investment incentives.
The inspiration behind this is not to offer incentives to companies that
would use the benefit to participate in the Philippine market with local
companies. A domestic market enterprise produces goods or services on
their own for their own market. Domestic market enterprises with more
than 40% foreign membership should have a paid-up capital of minimum
US$ 500 000, if advanced technology is not used.
• If the investment is through Special Economic Zone (SEZ), there are no
restrictions on foreign participation. These companies have to export the
whole production, If the company has not received specific approval from
the Philippine Economic Zone Authority (PEZA). This approval is always
made in a specific situation and may not be issued beforehand. Once the
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approval is received, the domestic sales cannot go beyond 30% of the
production.
Investment negative lists
• List A- includes limitations prepared by constitution or special law.
• In this list it is restricted foreign investment in specific sectors like
fisheries, rice & corm farming, mass media, Professional services like
doctor, lawyers, accountant, engineers etc, small scale industries, Mining
sector, retail trade, private security agencies etc
• 25% foreign investment is allowed in
1. Locally funded public works projects
2. Recruitment agencies
• 30% foreign investment is allowed in advertizing sector
• 40% foreign investment is allowed in educational institutions,
infrastructure, financing companies, land purchase, resource utilization
and development.
List B
Due to reasons of security, defense, health, morals and protection of small and medium-sized enterprises Restricted foreign investment in particular sectors.
40% foreign participation is allowed in
• Gambling
• Massage Clinics
• dangerous drugs
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• small-scale export enterprises with capital investment less than US$
5,00,000 depleting natural resources
• domestic market enterprises with capital investment less than US$
5,00,000 provided enterprises don't use advanced technology
Source: http://www.remburssi.org/projects/philippines/invest.htm
Philippines Industry outlook
• Demand for gold, copper, iron ore, chromites and coal remain strong • Commodity prices, especially gold, remain high • Investors from Korea, Japan, Australia, and China continue to come
and come across joint venture projects • Interest of several new markets (i.e. Russia) in exploring mining
opportunities in the Philippines • Banks are liquid and project proponents are upbeat in accessing from
them their financial requirements • Several projects are being re-scheduled and some are pushed into
operation • Several projects in the pipeline are expected to be on-stream within
the next 3-5 years: Tampakan, Silangan (formerly Boyongan),
Kingking, Far South East.
Source: http://www.remburssi.org/projects/philippines/invest.htm
[122]
FINDINGS
Philippines is very rich in natural resources, and there are plenty of business
opportunity in Philippines.
• The biggest dispute facing the Philippines is to progress the economy to a
higher level of growth and job creation.
• Due to foreign investment in Philippines it will create millions of jobs in
sectors like mining, IT business specially in outsourcing business,
Infrastructure, Manufacturing and logistics, Agricultural business, Tourism,
medical travel etc and so on.
• In water resource sector there is an opportunity in fishery sector.
• From latest import data India importing mineral fuels, mineral oils and
found 15.44% growth in year 2009-10 compared to 2008-09.
• Philippines is very rich in forestry and from import data for the year 2009-
10 there is increase in 120% in wood & wood article. So there is a
business opportunity in paper and wood industry.
• Surging mineral demand from rapidly industrializing economies like China
and India.
• Continuous importation of mineral ores of Japan, Australia and other
trading associates in Asia.
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AGRICULTURE SECTOR
1.1 PHILIPINES FISHERIES SECTOR Philippines is net exporter of Fisheries products while negative trade balance
prevails in other land based production system such as agriculture and forestry.
The balance of trade remains positive but at declining trend. .
Fisheries is a net earner of foreign exchange for the country. The major fisheries
export commodities include tuna, shrimp/prawn, seaweeds, octopus,
cuttlefish/squid, crabs, cultured pearls, ornamental fishes, abalone, and sea
cucumbers.
Contribution to the economy • The fishing industry’s contribution to the economy’s Gross Domestic
Products (GDP) in 2009 were 2.2% and 4.4% at current and constant prices,
respectively.
• Accounted for 15% (P170.3 billion) and 24.4% (P63.2 billion) of the Gross
Value Added (GVA) in Agriculture, Fishery and Forestry Group of P1,138 billion
and P259.4 billion at current and constant prices, respectively, the largest share
next to agriculture crops.
• It provides direct employment and income to around 1,614,368
stakeholders, and supplies a major part of the dietary protein requirement of the
population.
1.2 CROP SECTOR Philippines has a growing economy with 47% of the total land area. Philippines is
not enough self sufficient for agriculture crop industry requirement and about 5 to
10% annual shortage in rice and corn needs.
The Philippines plantation crops in India: Plantation crop industry is growing day by day in Philippines. In which they
include, coconut, rubber, cacao, sugarcane etc.
1.3 FORESTRY SECTOR
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The optimal area of forest for the Philippines is believed to be about 12 million
hectares, or 40% of the land area. Private sector plantations will focus on timber
production.
The need for wood and forest products in the future; The need to protect
watersheds and other vital interests; To provide urgently needed employment in
rural and urban areas; the need to distribute the benefits of natural resource
exploitation more equitably.
FUNCTIONS AND BUSINESS ACTIVITIES Production and consumption of wood products:
There has been a drastic reduction in the volume of lumber produced since
1982 while the production of veneer and plywood has remained at about the
1982 level.
Export of logs and processed wood: Prior to 1995, the Philippines was a major exporter of logs, Lumber, veneer
and plywood. This resulted in the drastic reduction in the volume of exported
logs.
Import of round wood and processed wood products
To augment the amount of logs produced locally, wood product
manufacturers have been importing logs, timber, veneer and plywood. In 2009, it
imported about 165,000 m3 of logs.
Wood as a source of energy: The utilization of other fuels such as liquefied petroleum gas (LPG) and
electricity are better used the consumption of fuel wood, either as firewood or as
charcoal .
Production of non-wood forest products: [NWFP] The major NWFPs in the Philippines are rattan and bamboo. Rattan has been
a traditional and major source of raw material for the manufacture of fine and
high end furniture.
Herbal industry sector in the Philippines:
[125]
The NWFPs that have become prominent in the last 4-5 years are those that
provide the raw materials for herbal medicine, cosmetics and beauty care
products, and food supplements.
The service functions of forests: In recent years, there has been increasing awareness among people of
the service functions of forests.
1.4 SUGARCANE SECTOR
INTRODUCTION OF THE SUGARCANE SECTOR Sugar industry is the most important sector of the Philippine Economy as it is the
country’s one of the oldest and the leading export earnerImportant by-products of
the sugarcane industry which can be put to alternative use also are:
STRUCTURE OF SUGARCANE SECTOR
1) Sugar regulatory administration (SRA)
2) Philippine sugar miller association (PSMA)
FUNCTIONS OF THE SUGARCANE SECTOR (of SRA and PSMA)
• To form proper system for stable, sufficient and balanced production of
sugar.
• To ensure stable prices and reasonable profit margin for sugar producers.
• To promote merchandising of sugar in both local and foreign markets.
• To undertake studies which may help in policy formulation and attainment
of objectives.
• To provide platform for discussion of industry problems and thus take
agreed upon actions in common interest of all members.
• To set up machinery for settlement of disputes among industry members.
[126]
.
1.5 POULTRY The Philippines poultry industry is drives it comprises broiler chickens native
chicken and ducks. The production of broiler and layer chickens are
characterised by large scale. The min conclusion is that although demand
outlook is optimistic of Philippines poultry industry as whole because of
anticipated income and population growth,
Poultry trade: The tariffs were 50 to 70% for the period2001 to 2008, but these were reduced
to 40% by 2010.
Global poultry trends Asia is the major chicken meat-importing region purchasing around 4.7 million
tonnes of a global total of between 11 and 12 million tonnes. Indeed if account is
taken of all these factors the quantity of chicken meat traded currently is at least
11 million tonnes
PRESENT TRADE RELATIONSHIP WITH INDIAN TRADE AND COMMERCE, INVESTMENT, IMPORT-EXPORT
After independence, India and Philippines has signed the Treaty of Friendship in
July 1952 in Manila to strengthen and continue the relations prevailing between
the two countries.
INDIAN INVESTMENTS IN PHILIPPINES Bio-seed Research Philippines, belonging to DSCL Group, has been present in
General Santos City, Mindanao, for the last 15 years
PHILIPPINE INVESTMENTS IN INDIA Del Monte, Philippines has concluded a JV with the Bharati Group for
investments in food processing plants in India.
COOPERATION IN AGRICULTURE & FOOD PROCESSING
[127]
India and Philippines have been cooperating in the field of agriculture under the
framework of an MOU for Cooperation in Agricultural Sciences and Technology.
The MOU signed in 1991 and expired in 2001. On 4th February 2006, during the
visit of President Dr. A.P.J. Abdul Kalam to Manila, both sides signed a fresh
MOU on Cooperation in Agriculture and Related Fields.
At the 9th Joint Working Group in Manila on 1-2 September 2005, the Philippine
side informed that a proposal from the Philippine Coconut Authority (PCA) was
sent to the Indian Coir Board for an exploratory mission of PCA to study the coir
industry in India. The Indian side promised to facilitate an early visit.
Philippines has a major interest in safeguarding its agricultural export sector. As
part of G-20, it worked closely with India at the Cancun Ministerial 2003. It
CROP SECTOR In India organic farming is use in such producing a higher qualitative crops
production and exported it. In this organic farming there is not an single or central
agency that is handle this or collect this information. Land area for cropping is
41000 hectors.
POSITION OF INDIA
Agriculture in India, largest crops by economic value
Economic value
Unit priceAverage yield, India(2010)
World's most productive farms(2010)
Rank Produce (2009
prices, US$)
(US$ /
kilogram)
(tons per
hectare)
(tons per
hectare) Country
1 Rice $35.74
billion 0.27 3.3 10.8 Australia
2 Buffalo milk $25.07
billion 0.4 1.7 1.9 Pakistan
3 Cow milk $14.09
billion 0.31 1.2 10.3 Israel
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4 Wheat $12.13
billion 0.15 2.8 8.9 Netherlands
5 Sugar cane $8.61 billion 0.03 66 125 Peru
6 Mangoes $8.12 billion 0.6 6.3 40.6 Cape Verde
7 Bananas $7.60 billion 0.28 37.8 59.3 Indonesia
8 Cotton $5.81 billion 1.43 1.6 4.6 Israel
9 Potatoes $5.31 billion 0.15 19.9 44.3 USA
10 Fresh
Vegetables $5.28 billion 0.19 13.4 76.8 USA
11 Tomatoes $4.12 billion 0.37 19.3 524.9 Belgium
12 Buffalo meat $3.84 billion 2.69 0.138 0.424 Thailand
13 Onions $2.92 billion 0.21 16.6 67.3 Ireland
14 Okra $2.90 billion 0.64 10.6 20.2 Cyprus
15 Chick peas $2.83 billion 0.4 0.9 2.8 China
16 Fresh fruits $2.79 billion 0.35 7.6 23.9 Israel
17 Eggs $2.65 billion 0.83 13.8 24.7 Jordan
18 Soybean $2.61 billion 0.26 1.1 3.7 Turkey
19 Cattle meat $2.39 billion 2.7 0.1 0.42 Japan
20 Groundnuts $2.33 billion 0.42 1.1 5.5 Nicaragua
EXPORT MARKET
Export is one of the attracting factors which improving organic farming in India.
The current production of organic crops is around 14,000 tons. Out of this
production, tea and rice contributes around 24% each, fruits and vegetables
combine makes 17% of this total production. From India around 11,925 tons of
organic product is exported, that makes around 85% of total organic crop
[129]
production. Estimated quantity of various product that have exported from India
in following Table.1
Major organic products exported from India
Product Sales (Tons)
Tea 3000
Coffee 550
Spices 700
Rice 2500
Wheat 1150
Pulses 300
Oil Seeds 100
Fruits & Vegetables 1800
Cashew Nut 375
Cotton 1200
Herbal Products 250
Total 11,925
FORESTRY SECTOR
India produces forest products like, sawnwood, wood pulp, bamboo, rattan
ware and pine resin .India's paper industry produces over 3 million tones
annually from more than 400 mills. Wood is also the main part of furniture and
craft industry .Causes for less wood use ,
government subsidies on wood raw materials, poor regulations, lack of
competitive options for the rural and urban Indian consumer.
[130]
PHILLIIPPINES EXPORT/IMPORT
PLYWOOD [EXPORTS/ IMPORT]
Plywood was not a significant export for the Philippines. The other regions
shared a small proportion of plywood exports. Taiwan and Japan were the major
markets for plywood from the Philippines.
PARTICLE BOARD [EXPORTS/ IMPORTS]
The Philippines exported a total of 9000 m3 of particle board between 2005 and
2011, Taiwan and Japan were the leading markets for particleboard.
Imports of particleboard were consistently maintained during the period with a
total volume of 157 000 m3 valued at US$32 000.
FIBREBOARD [EXPORT/IMPORT]
The Philippines exported fibreboard only in 1997. The volume was less than 100
m3 and the value US$8 000, the importer was Taiwan.
A total volume of 544 000 m3 of fibreboard worth US$95.3 million was imported
between 2005 and 2011.Taiwan, Macau, Malaysia and Indonesia were the major
suppliers of fibreboard to the country.
WOOD PULP [EXPORT/IMPORT]
Wood pulp exports totalled less than one thousand MT over the five year period
and were worth US$592 000.
Chemical sulphite bleached and unbleached pulps had a combined five-year
import total of 8 000 MT or US$4.3 million.
RECOVERED PAPER [EXPORT/IMPORT]
[131]
The highest recorded recovered paper exportation was in 2009 with a weight of
9 000 MT, giving total foreign exchange earnings of US$880 000.
A total of 1.5 million MT of recovered paper, valued at US$288 million, were
imported
PAPER AND PAPERBOARD [EXPORT/IMPORT]
Among paper products, newsprint was the leading export. Neighbouring Asian
countries, such as China, Thailand, Singapore, Hong Kong, etc. were the major
destinations for newsprint.
EXPORT IMPORT OF FOREST PRODUCT IN INDIA
• The present Prime Minister Dr. Manmohan Singh had reduced the import
duty on timber to zero percent when he was the Finance Minister. All
imports of wood and wood based products were permitted freely, felling in
forests was curtailed and/or banned and since then the forest cover has
improved from 8% to 24%. One of the major exports from teak plantations
is thinning poles.
SUGARCANE SECTOR
Indo-Philippine textile mills Inc (Indo-Phil) largest Philippine investment in the
country. At the end of 2011 US$ 1 billion in bilateral trade set by Joint working
groups was met.
Joint working group on trade and investment These meeting is held on regular basis in New Delhi which reviews status and
progress between two countries regarding trade, investment and its related
technical activities.
[132]
Joint working group on investments Agreement of protection and promotion of Investments was held in Manila,
Philippine on 29th November, 2000. The main aim of these group is to enhance
commercial, industrial and economic industries.
Joint working group for Agricultural Cooperation (JWGAC) This group has been set up to promote agricultural relations and enhance export
and import relations between India and Philippines. The meeting of JWGAC is
held before meeting og Joint Working Group on trade and Investment.
Trade statistics According to the latest data of 2011, it was reported that 18th as trading partner of
Philippines, 22nd in terms of export market and 18th as import supplier of
Philippines.
IDENTIFICATION OF POSSIBILITIES/ NEW OPPORUNITIES OF BUSINESS FILIPINO TECHNIQUE USED IN BANANA PRODUCTION IN GUJARAT BANANA
The use of “Banana” fiber for textile and other purpose as natural material is a
new concept for India. It may be noted that this fiber is already used successfully
in Philippines since decades and hence it is also known popularly as “Manila
Hemp”. The other name of this fiber is “Abaca”, it belongs to musa sapientum
species.
Philippines and Japan are the countries using banana fiber on large scale for
commercial production of variety of textile items. Philippines is also exporting
huge quantity of ready made garments made from this fiber to Japan, Singapore,
Taiwan and all far East Asian countries. However, the use of Banana fiber in
commercial production is still to gear up in India, and is currently only limited for
[133]
consumption by cottage industry. Banana fiber offers excellent potential in terms
of its eco-friendly nature and properties as compared to other natural and man-
made fibers.
Why Gujarat? Gujarat ranks sixth in the area cultivation of banana in the country. Banana stem
waste is the basic raw material required for this project and Gujarat has sufficient
availability of the same to cater to the need.
Gujarat has well developed cotton textile industry hence this will find ready
market for blending. Banana fiber is a natural fiber with considerable strength
and can be used for various other purposes like preparing ropes for well drilling,
tug pulling in ports and other applications.
There are two methods for extraction of Banana fiber, namely Bacnis method
and Loenit method.
Gujarat is one of the largest producers of banana in the country. Bharuch farmers
bring in the latest agriculture technologies to increase their yield. Around 500
farmers from one Jhagadia block have an annual banana turnover worth Rs 3.5
crore. Banana grows with the latest Philipines technologies are exported to Saudi
Arab, USA and European nations. FISHERIES INCREASED FISH CONSUMPTION • Fish consumption has risen in both rural and urban areas in recent years
as the volume of fish production has grown each year. Fish is extremely
important in the countryside where sardines and rice is the staple diet for many
people.
• Fish canning/processing and allied industries source their fish supply from
local catch and import them during lean season to sustain the demand of
production for canned fish products.
EXPORTS / MAJOR EXPORT MARKET
Year
Export Volume (MT)
Export Value (US$ million)
[134]
2007 173,075.6 569.8
2008 205,274 769.6
2009 196,521 674.9
Major fishery exports, e.g., shrimp/prawn, crabs/crab fats, octopus, lapu-lapu,
cuttlefish/squid, ornamental fish, roundscad and sea cucumber constitute 86% or
US$581.7 million of the total US$674.9 million exports of fish and fishery
products.
MAJOR DESTINATION OF PHILIPPINE FISH AND FISHERY PRODUCTS
Country % Share Country % Share
USA 11.2 Germany 1.9
Japan 11.2 Singapore 1.3
Hong Kong 6.9 Republic of China 1.3
France 2.2 Belgium 1.3
Spain 2.1 Others 42
Taiwan (ROC) 2.1
PRODUCTION SUPPORT SERVICES
Construction and upgrading of support fishing infrastructure that includes
fish landing, post harvest and handling facilities (Navotas Fish Port
Complex in Metro Manila is the country’s premier fish landing and training
center)
Proposed establishment of a new fish port in another location
Fish seed production and distribution
Construction / improvement of municipal fish ports by the Philippine
Fisheries Development Authority (PFDA)
Conduct of production and post harvest-related research activities
[135]
Operation and management of M/V DA-BFAR Marine Fisheries
Management Research Training and Oceanographic Vessel
Establishment and maintenance of Mariculture Parks / Zones
Establishment and maintenance of hatcheries (bangus, tilapia, carp and
other species)
Value-added products formulation
The Philippines now ranks fourth among the top ten largest tilapia producers in
the world – after China, Egypt and Thailand. Tilapia production grew by 5 percent
during the last 14 years, noted the industry strategic plan for tilapia. At 2020, the
surplus is expected to reach around 10,000 metric tons.
CROP SECTOR
o Plantation crops are main segment for the horticulture in India.
o Plantation crop has a large group of crops and which is a main
opportunities for this sector
o Tea and Coffee is an oldest industry in India which provide potential for
export.
o Global crop production market need to meet the demand of a rapidly
changing crop production industry.
o A platform
o Networking
o Farmer’s betterment
KEY TOPICS OF INDIA INTERNATIONAL CROP SUMMIT 2011
• Effect of climate change on crop production in India.
• New business opportunities in the Indian crop production market.
• Ensure food security through efficient crop management in India.
• Way forward towards the 2nd green Revolution in East North East.
[136]
• Innovation of Biotechnology and Nanotechnology in crop production.
• Application of advanced technology for better storage of crops.
• Harnessing the trade opportunities of Indian Crops in Global Markets.
• New Trends towards the development of Crop Protection in India.
FORESTRY SECTOR GROWING STOCK, INCREMENT AND ANNUAL HARVEST OF WOOD It is foreseen that there will be a slight increase in forest cover brought about by
an increase in areas under forest plantations and because of the rehabilitation of
watersheds which exceeds losses from continued illegal logging,
PRODUCTION, CONSUMPTION AND TRADE It is expected that in the next decade, there will be higher consumption of wood
as construction material.
FOREST PRODUCT INDUSTRIES IN THE GLOBAL CONTEXT Some of the industries like furniture industry, handicraft industry, and the
NWFP industry has shown competitive progress in the world context. The total
global furniture export market is estimated to be US$52 billion. The 2010 export
value of Philippine furniture is a mere 0.44% compared to the global market. The
Philippine furniture has been competitive is in design.
COUNTRY’S SHARE IN THE GLOBAL TRADE The harvests from the present plantations will only be used to fill up local
demand with very little export of logs, timber, veneer and plywood. When the
plantations that are expected to be established in the next several years become
harvestable after 10-12 years, there will be an increase in the global trade of the
country in wood products.
WOOD AS A SOURCE OF ENERGY In the immediate future it is likely that more forestlands will be allocated for
the growing of jatropha, coconut or oil palm for bio-diesel.
[137]
POTENTIAL OF FORESTS AND FORESTRY By forest plantation, forests and forestry in the Philippines in future will see
an improvement in the forest cover. It is projected that an additional 220,000 ha
of forest plantations will be established and in future the Philippines will be
producing about 2 million m3 of logs.
SUGARCANE SECTOR There is large pool of opportunities of doing business with Philippines.
Philippines basically is consumer oriented economy.
The biggest opportunity is in the vibrant agriculture sector is in agribusiness.
Agribusiness grows hand in hand with the growing technology and does not
decline with time as in case of agriculture. For e.g.
• Supply chain transformation in Philippines has reduced cost and delivery
times .
• Bio-fuels and usage of large amount of by-products of sugarcane has
resulted into increased land utilization.
• Advances in information and communication technologies has improved
market access and pricing of agricultural goods in Philippines.
• Trade liberalization.
• Rising income and increasing wealth of people in countries like India and
China has also created an opportunity to set up business related to high
value added agriculture products.
• Factor endowments
• Productivity and cost
• Economies of scale
[138]
Moreover according to the Sugarcane roadmap as formulated by Department of
agriculture, Philippines, condensed into slogan “gearing up Initiatives ASEAN
free trade area (AFTA) 2015 and beyond” following initiatives will be taken which
are one of the main reasons why the sugarcane sector is believed to be full of
opportunities:
• There will be increase in sugarcane area from 400,000 hectares (ha) to
470,000 ha.
• There will be increase in farm productivity from 55 tonnes cane per hector
(TC/Ha) to 75 TC/ha.
• Increase in sugar yield from 1.80 bags per ton cane (LKg/TC) to 2.1
LKg/TC.
• Moreover tariff on imported sugar will also reduce by 5%.
Moreover apart from this there is also large scope for importing Biotech and
genetically modified crops. Philippines has adopted Biotechnology as strategy. It
grows around 50,000 hectares of biotech crops. Thus there are around 28
genetically modified crops approved for importation.
POULTRY
Production of feed components (mainly corn and soybeans)
The Philippines remains one of the few countries in Asia that has not been
affected by Avian Influenza (AI).
Service should be delivered at farmer doorsteps and linked with cost
recovery for economic viability.
• Import of maize and soya. Technology and machinery to be flexible.
• Referral labs accredited and recognize with global status.
• Status of poultry agriculture industry.
• Try to emphasize on elimination subsidies by develoed country in WTO.
[139]
• Opportunity in south and east asia and middle east countries.
• Export of value added product rather row materials.
• Calamity relief fund (bird flu)
PROBLEMS & PROSPECTS OF BUSINESS/TRADE WITH THE PHILIPPINES FISHERIES
• The introduction of private standards, including for environmental and
social purposes, and their endorsement by major retailers;
• Certification of aquaculture in general;
• Concern in exporting countries about the impact on their fish exports of
the introduction in 2010 of new traceability requirements in EU markets to
prevent IUU fishing;
• Continuation of trade disputes related to catfish species and shrimp;
• The growing concern of the general public and the retail sector about
overexploitation of certain fish stocks, in particular of bluefin tuna;
• The multilateral trade negotiations in the WTO, including the focus on
fisheries subsidies;
• Climate change, carbon emissions and their impacts on the fisheries
sector;
• Energy prices and the impact on fisheries;
• Rising commodity prices in general and the impact on producers as well
as on consumers;
• Prices and margins throughout the fisheries value chain;
[140]
• The need for competitiveness compared with other food products;
• Perceived risks and benefits from fish consumption.
CROP SECTOR
Trade barriers:
Trade barrier are government-induced restrictions on international trade.[1] The
barriers can take many forms, including the following:
• Tariffs
• Non-tariff barriers to trade
Import, Export licences,
Import quotas
Subsidie
Voluntary Export Restraints
Local content requirements
Embargo
Currency devaluation
Trade restriction
Problems in trade business: o Trade barriers done its work with the same principles and this imposition
creates a cost on trade
o Trade barriers are decreases overall economic efficiency and in which
make comparative advantage.
o Trade barriers such as taxes on food imports, overproductions market, low
rates commodities.
o In trade barriers it also includes a limited choices of products and would
force customers for paying a higher prices of quality.
FORESTRY SECTOR
[141]
o Replacing concrete structures with timber could achieve saving, reducing
CO2 during cement manufacture and sequester carbon in the timber. but it
is not economically viable.
o Concerns of developing countries and ecological NGOs focus on
problems related to eco-colonialism – which can be explained as ,
developed countries want to reduce their GHG emissions by investing in
forestry activities.
o Opposition faced by different forestry projects from NGOs because of
environmental issues.
SUGARCANE SECTOR
1. Moreover, if any agribusiness retail outlets are to be opened up, the
barrier facing the business is that the parent company should have net
worth of over $200 million. It must also have 5 retail store elsewhere or at
least one retail outlet with net capital of $25 million or more.
2. Foreign retail store owners are not allowed to engage in trade outside their
stores.
3. Moreover the business professionals also have to face reciprocity agreement: nationals of that country which allows Philippine to do trade in
their country are allowed to do any kind of business in Philippines.
Apart from trade barriers few other barriers include:
• Pursuit of economic growth through intensive agriculture which has given
rise to lower productivity as the major issue.
• Conversion of agricultural land to other uses.
• Mining is aggressively practiced in Philippines to boost country’s
economy, reduce foreign debts. This sets forth the threat to sugarcane
crop and its by-products by polluting environment.
[142]
• Drive for energy independence has led the government to push for
cultivation of sugarcane as its by-products are used for production of
energy.
• Philippines has adopted Biotechnology as strategy. It grows around
50,000 hectares of biotech crops. Thus there are around 28 genetically
modified crops approved for importation fir direct use, feed or processing.
• Agro biodiversity like excessive rainfall, strong typhoons etc results in
drastic climate change and can become threat to any agriculture crop
including sugarcane crop.
POULTRY
The high cost of feed continues to be a limiting factor in the sector’s
growth.
Posing a threat for the Broiler Industry is the possible entry of the Bird Flu
virus into the country.
Competition for the local market via smuggled chicken
Poultry and poultry products are highly subsidize by countries like USA
and EU and this Factor has implied India’s export of such product not only
to this country but to other countries where they compete with Philippines.
FINDINGS & CONCLUSION AND STRATEGIC SUGGESTION FOR TRADE & COMMERCE
FISHERIES There is need for policy makers and experts to exchange ideas to
formulate dynamic framework for the growth of aquaculture sector.
Develop simple and cost effective method of increasing their nutritional
value
[143]
Support the adoption of low cost machinery and improve methods of
processing and storing farm made aqua feed
In the Philippines , Tilapia farmers are trained by local Government on
how to reduce the use of commercial feed
Satellite mapping help in fishing in India also help to save diesel used in
searching manually by ICAR Indian Council of Agriculture Research
Philippines ranked 4th in Asia in fishery product export in international
fishery Trade
In terms of aquaculture production, the Philippines ranked 3rd with 2.4
million tons, next to Indonesia with 4.7 million tons and India with 3.7
million
Investment opportunities available in the fisheries sector, in terms of
production and processing
FORESTRY SECTOR
Policies made by government should be beneficial to both smallholders
and private land owners, so they can adopt the policies to increase the
forest cover.
Incentives for forest plantation development are expected to be formulated
and put in place including possibly micro-financing for smallholder
plantation farmers.
More funds will be provided by the government to rehabilitate and better
manage watersheds.
[144]
Govermebt should make policies to prevent migration from forestlands to
prevent it.
Forest cover should be improved to remove problems of biofuels and
energy sources.
In fuel wood there can be trade betwwn india and philliippines, and gujarat
state can also play an important role in the trade of teakwood.
In the Philippines , there is scope of development of furniture industry and
herbs industry.
India can also make better trade relation with Philippines by guiding the
farmers of Philippines about the tissue culture method.
SUGARCANE SECTOR INNOVATIVE SPACING TECHNIQUE
Shi Narayan Singh Patel of Madhya Pradesh has introduced this technique to
combat problems like lower productivity and thus low remuneration yielding
from it. We have seen that due to over dependence on agriculture Philippine
land is suffering from low productivity. Instead of recommended 60-90 cm
spacing, he introduced the spacing of 135 cm. this helps in easy weeding and
intercultural operations. This approach of sowing reduces production cost of
[145]
up to 30% as it requires 50% less seeds i.e. 62 qt/ha instead of traditional 124
qt/ha.
POULTRY
• The demand for eggs for growing and supply is short of demand in the
coming year.
• Try to vertical integration to reduce cost and increase competiveness.
• Enter into new emerging market like control with large emerging food
chain to supply good quality and clean eggs,
• For into rural market through mid day meal programme etc.
EDUCATION SECTOR of Philippines
Introduction of education Sector and its role in the Economy of Philippines.
Overview
Education in the Philippines
[146]
Elementary and high school education is compulsory. It is noticed by the
Department of Education, that the funding for school equipments, recruitment of
teachers for public schools, and the supervision and organization of curriculum.
6 or 7 years of students enter elementary schools, under the Grade 1 to 6
students. Then, at the age of 12 or 13, students then enter high schools, which
they will be serving as First Year to Fourth Year students (which are equivalent to
Grades 7 to 10).
Education is the flagship of Australia’s program of development cooperation with
the Philippines. Australia is the lead bilateral grant donor in basic education,
contributing over $30 million annually.
There are three government organizations handle education in the Philippines.
These are the Department of Education, Culture, and Sports (DECS), the Commission on Higher Education (CHED) and the Technical Education and Skills Development Authority (TESDA).
2.2, Structure, Functions and Business Activities of education Sector
[147]
Primary Education
Paaralang Elementary or elementary state-sponsored primary school covers
grades 1 to 3. Major subjects include maths, science, English, Filipino and social
sciences.
Middle Education
State-sponsored middle school education covers grades 4 - 6, with an optional
7th grade offered by some schools. Major subjects include maths, science,
English, Filipino and social sciences. Optional subjects are physical education,
music and arts.
[148]
Secondary Education
Secondary education known as Paaralang Sekundarya comprises 4 grades that
have changed little since the Second World War. The curriculum is prescribed for
both private and state schools. Core subjects are as follows:
• Year 1 - Filipino 1, Algebra 1, Integrated Science, English 1, Philippine
History
• Year 2 - Filipino 2, Algebra 2, Biology, English 2, Asian History
• Year 3 - Filipino 3, Geometry, Chemistry, World History, Geography
• Year 4 - Filipino 4, Calculus, Trigonometry, Physics, Literature, Economics
Minor optional subjects include Health & physical education, Music, Arts, Home
Economics and Technology. Selected schools present additional subjects. Total
secondary school numbers exceed 5.5 million.
Tertiary Education
Schools or educational institutions – public or private – are only as good as their
students have become. The whole business of insuring our children get the
education they rightfully deserve is but found in the home front – it is the single
nurturing environment than even schools can provide.
Vocational Education
Programs address a wide range of practical subjects with durations between 2
weeks and 2 years. On completion students may take centrally-administered
examinations to obtain certificates.
[149]
The State in the case of public schools provides for free elementary and
secondary education to everyone. Philippines are having a free market economy
(laissez faire), as always. And not few parents or families mistake the rate of
tuition fees as the absolute gauge that the school is a good one. But a study did
on a well-known private school along Katipunan Avenue in Quezon City reveals
some surprising facts. Findings of that study show that children enrolled in their
pre-school to the elementary and sometimes even up to the high school level,
are born of parents whose jobs range from being tricycle to taxi drivers,
laundrywomen (or labandera), or those that make a living from the ordinary types
of economic activity. And what apparently explains this is a social phenomenon
that most parents are just as trying hard as any other.
Providing quality education to children is a big investment activity by itself.
Private schools that charge higher tuition fees are more likely to have better
quality education than their lower counterparts or even most public schools for
that matter. Some parents are probably guilty of that so-called "edifice complex" -
they are who thought that schools with taller and bigger buildings over an even
wider expanse of campus do run good quality education than those many small
ones in some crowded nook and cranny. Likewise, most parents, think that good
quality education goes by some commercial price tag - the higher the tuition fees,
the better.
Education system aims to:
Provide a broad general education that will help each individual in society to
attain his/her potential, and enhance the of the individual and the group;
Train the nation’s manpower in the middle-level skills required for national
development;Develop the high-level professions that will provide leadership
for the nation, advance knowledge through research, and apply new
knowledge for improving the quality of human life.
[150]
2.3, Administration and management of the education system
The Department of Education (DepEd) is the principal government agency
responsible for education and manpower development in Philippines. The
mission of this is to provide quality basic education that is fairly accessible to all
and lays the foundation for life-long learning and service for the common good. It
inspects all basic education institutions, both public and private, establishment
and maintenance of a whole, sufficient and included system of education relevant
to the goals of national development.
The Bureau of Elementary Education
(BEE) is responsible for providing access and quality elementary
education for each individual. It also point out on social services for the poor and
public resources and hard work at publicly deprived regions and definite groups.
The Bureau of Secondary Education (BSE) is responsible for providing access
and quality secondary education. Its aim is to enable every elementary graduate
to have access to secondary education.
The Bureau of Non-formal Education
(BNFE) is in charge for fundamental to the upgrading of the poor through
literacy and ongoing education programmes. Its plan is to provide paying
attention on the basic services to the more deprived sections of the population to
get better of their welfare and add to human resource growth.
The Bureau of Physical Education and School Sports
(BPESS) is responsible for physical fitness promotion, school sports
development, cultural heritage revival (Kundiman Fiesta), natural heritage
conservation, and values development. Its aim is to inculcate attractive principles
such as self-control sincerity, cooperation, sportsmanship, fineness and others
and make the Filipino youth fit to respond sufficiently to the demands,
[151]
necessities, challenges and opportunities that the other century may bring. The
functions of the BPESS were engrossed by the Philippine Sports Commission
in August 1999.
The Technical Education and Skills Development Authority
This was established through the ratification of Republic Act No. 7796
otherwise known as the Technical Education and Skills Development Act of
1994. It aims to bestow assurance the full contribution of and assemble the
industry, labour, local government units and technical-vocational education and
training (TVET) institutions in the skills development of the country's human
resources.
The Commission on Higher Education
(CHED) is self-governing and part from the DepEd. The hire is
responsible for formulating and implementing policies, plans and programmes for
the development and well-organized operation of the system of higher education
in the country.
Department of Social Welfare and Development
(DSWD) is the agency accountable for in general ECCD policy and
programme growth at national level, to set and promote the rule and principles,
provided that technical help to the local management units through the regional
field offices, monitor and assessment.
TOP 10 UNIVERSITIES SR.NO. PHILIPPINES INDIA
1 University of the Philippines,
Quezon City
Indian Institute of Technology
Bombay, Mumbai
2 De La Salle University, Manila Indian Institute of Technology
[152]
Kanpur, Kanpur
3 University of the Philippines
System, Quezon City
Indian Institute of Technology
Madras, Chennai
4 Ateneo de Manila University,
Quezon City ...
University of Delhi, Delhi
5 University of santo Tomas,
Manila
Indian Institute of Technology Delhi,
New Delhi
6 University of the Philippines
Los Barios, Los Baños
Manipal University, Manipal
7 Aquinas University of Legazpi,
Legazpi City
University of Mumbai, Mumbai
8 Mindanao State University,
Iligan City
Indian Maritime University, Chennai
9 Xavier University, Cagayan de
Oro City
Birla Institute of Technology and
Science, Pilani
10 University of San Carlos,
Cebu City
Anna University Chennai, Chennai
Total 208 universities Total 505 universities
EDUCATIONAL STATS OF INDIA & PHILIPPINES SR.NO PERTICULARS PHILIPPINES INDIA COMPARISION
1 Avg. yrs. Of
schooling
(yers of schooling
of adults avg. over
8.2
Ranked 28th
5.1
Ranked 65th
61% more than
India
[153]
age 15
2 Duration of
compulsory
education
7 yrs
Ranked 128th
8 yrs
Ranked 116th
14% more than Philippines
3 Duration of
primary level
6 yrs 6 yrs.
4
Duration of
secondary level
4 yrs.
Ranked 180th
5 yrs.
Ranked 164th
25% more than Philippines
5 Primary education
completion rate
97%
Ranked
42nd,2005
90%
Ranked 71th
,2005
8% more than India
6 Education
spending (% of
GDP)
3.1%
Ranked 104th
4.1%
Ranked 71th
32% more than Philippines
7 Education
spending (% of
total government
expenditure)
17.8%
Ranked 33rd
12.7%
Ranked 68th
40% more than
India
8 Females in
primary level
48.9%
Ranked 31st
43.6%
Ranked 161st
12% more than
India
9 Females in
secondary level
51.3%
Ranked 28th
39.6%
Ranked 152nd
30% more than
India
10 Public spending
on education, total
> % of
17.22%
Ranked 19th
10.74%
Ranked 57th
60% more than
India
[154]
government
expenditure
11 Public spending
per student of
primary level
14.3%
Ranked 38th
7.2%
Ranked 107th
99% more than
India
12 Pupil-teacher ratio 34.53
Ranked 38th
40.2
Ranked 27th
,2004
16% more than Philippines
13 Teaching weeks
per year(primary
level)
40 weeks
Ranked 11
42 weeks
Ranked 4th
5% more than Philippines
14 Women to men
parity index ratio
of literacy rates,
aged 15-24
1
Ranked 56th
,2000
0.68
Ranked
109th,2000
47% more than
India
Basic Education Sector Reform Agenda in Philippines (BESRA):- BESRA is a policy reforms pursued by the Department of Education (DepEd) the
purpose of such reforms is improving the quality of education in the Philippines &
the goal is to attend the Education For All (EFA) by 2015.
The BESRA is developed in Aug, 2005 & the purpose of such development is to
research for the academe, like as a report on Multi literacy by Dina S. Ocampo
and a sect oral study on National Learning Strategies in Science and
Mathematics by Science Education Institute Director Ester B. Ogena. This was
formally implemented in 2006.
[155]
OBJECTIVES OF BASARA BESRA seeks to attain all the objectives by 2015.
1. Universal Adult Literacy;-
Adult, who beyond the school age, also be competent enough in their
native tongue, in Filipino or in English is to be considered literate
regardless level of schooling.
2. Universal school participation & Elimination of Drop-out and repetition in
first three grades;-
All children aged six years old must enter grade school & learn & achieve
required competencies from grades 1to 3.
3. Universal Competencies of Basic Education Schooling with particular
Achievement level ;-
Children aged 6 to 11 years must be complete elementary education with
satisfactory achievement levels. Children aged from 12 to 15 years must
complete their secondary education also satisfactory level.
4. Total community commitment to attainment of basic education
competencies for all
Key Reform Thrusts
To achieve objectives, the BESRA focuses on following reforms.
• All school needs to continuously improve.
• Teachers need to enhance their contribution to learning outcomes
Social support need to increase to attain desired learning
outcomes.
• Improve outcome by complementary early childhood education,
alternative learning system & private sector participation.
[156]
• Change the culture of Dep Ed to better support these key reform
thrusts.
BESRA DEVELOPMENT & CRITISM
As such BESRA accepted both by private & public sector many DepEd
have been used BESRA like institution of multilingual education, Third
Elementary Education Project (TEEP), and the Secondary education
development and improvement project (SEDIP).
But after the first implementation, most of the other reforms not be fully
implemented. published in the Philippine Daily inquirer the primary
problem to any true reform in education sector was “Entrenched elements
in bureaucracy & by elements outside the system whose interest firmly lie
on the status quo.”
To fund BESRA was also sideline by the controversial Cyber Education
Project (CEP), which led to the NBN- ZTE scandal. That is overpricing
CEP compare to budget allotted to the computerization project of the
BESRA that is 26.48 billion for CEP , 235 million for BESRA
computerization project.
Philippine Education Status Quality I. Introduction
Education system in Philippines has deteriorated significant in recent
years, both in access & quality. The fundamental causes of decline are
• Rate of economical growth is lower
• Economic growth is also inadequate
• Rapid population growth
• Corruption
[157]
This factors leads
• Quality of teacher training is poor
• Teachers are in shortage
• Over crowed classes
• Under equipped classrooms
• High drop – out rates
• Access for poor children is difficult
Now a day's Higher education becomes international today people is trained not
for just requirement of particular country but for the world. The other countries
come and look for the global- quality graduates. To meet international
benchmarks need to systematically and continuously increase standard and also
need to upgrading skills and qualifications of student.
In 2007 national budge 65 million for science & mathematic scholarship,
especially for training of teachers in these fields. Because the teachers are the
primary nation -builders. Angara explained that no country in the world slipped
that rapid ly and swiftly within a period of less than 5 years.
FDI inflows to education sector is beneficial to India
• International education institutions come to India, then student be able to
foreign education in India.
• The seats are limited in Indian education so FDI in India helps to open up
new opportunity for the Indian student.
• The libraries and labs that Indian student gets have high level of standard
because of FDIs.
• The FDI attract the student of neighboring countries to come in India
which help the country as import destination for education.
[158]
• The Indian students come in touch with best professors from across the
globe.
• FDI leads to higher number of Indian students getting job internationally
acclaimed companies.
• Make available world class research facilities.
• FDI attract the top most universities across the world to set up their
branches in the country.
PRINCIPLES & GENERAL OBJECTIVES OF EDUCATION IN PHILIPPINES
• Provide general education that assist each individual in society as human
being, and enhance quality of individual & group;
• Help individual for development into productive & versatile citizen;
• Train manpower in the skills required for national development;
• Develop high level professions that provide leadership for nation, advance
knowledge through research, & apply new knowledge for improving
human life;
• Respond to changing needs & conditions through a system of education
planning & evaluation(education Actof 1982,section 4)
LAWS & OTHER BASIC REGULATIONS CONCERNING EDUCATION Constitution (1987) “the state shall protect & promote the right of all citizens to
quality education at all levels & take step that education is accessible to all”
Republic Act No. 6655(Free secondary Education Act) Secondary education
should provide free in state schoos
Education Act of 1982 the objectives of formal education at the elementary,
secondary, and tertiary level well as those of non-formal education are specified
in this.
[159]
Republic Act No. 6728 deals with private education, by setting common
minimum physical facilities and curricular requirements for all schools and by
liberalizing the subject content of values education.
Executive order No.658 of 2008 specifies the universalization of early childhood
education & standardization of preschool & daycare center was established.
Republic Act No. 7722 The creation of the commission on higher education and
technical education and skills development authority separated these entities
from the department of education where they originally belonged.
The Philippines Teacher Professionalization Act, Republic Act No.7836,was
issued in 1994. The literacy co-ordination council, an interagency body
administratively attached to DECS, was created by Republic Act No. 7165 to
carry out state policy to eradicate illite4cy.
The Republic Act No. 7796, deals with technical education and skill development
of country’s human resources.
An Exploration of Private Sector Financing of Higher Education in the Philippines and Its Policy Implications for India
Introduction
Today majority of the governments in developing countries are under great
pressure to restrain public spending on higher education. The structural
adjustment programs favoured by the IMF and World Bank emphasize reduction
in public expenditure, largely because of budget deficits and external debts. It is
this state of affairs that has prompted many countries to search for alternative
sources other than the public treasury. In the context of higher education,
advocacy of private financing has become increasingly common, while the
measures for effective cost recovery and private investment too have emerged
as an accepted tool.One of them and foremost among these is the Philippines
[160]
where private higher education has been an important and accepted part of
national policy since pre-independence.
The present study of Philippine privately financed and managed higher education
tries to look at the prominent features of Philippine private higher education
through its history, and to examine the issues of equity, efficiency and quality in
order to bring out some policy implications for the emerging private higher
education system in India.
Private Institutions and Their Characteristics
The private higher education sector of the Philippines is proportionally larger than
that of any major country. Nearly 88 percent of the institutions are privately
owned and managed without subsidies from the government, and 67 percent of
all students are enrolled in private higher education institutions. The enrolment in
various programs clearly reflects that higher education in the Philippines is
determined largely by market forces and the dominant private higher education
institutions are there in response to student demand for different programs (Tan,
1995).
The trend, however, shows a decline in the share of private education in terms of
total enrolments, as the public sector has grown. The number of private higher
education institutions has increased at an average annual rate of about 3 percent
since 1995.
One of the most basic features of mass private higher education in the
Philippines from its period of development till the present is an extreme reliance
upon tuition revenues, even though they depend predominantly upon a student
client that is by no means healthy. Dependence on revenues from tuition and
other fees ranges from a high of 97 percent to 82 percent.
Higher education, especially private higher education, is expensive, but a wide
range of prices exists. The great majority of poor families are able to afford and
demand inexpensive education (Valisno, 2000). These are poor quality programs
and with low returns too.
[161]
Lessons learned from the Indian Higher Education System
At present, India has about 304 universities, including 62 Deemed Universities15,
11 open universities, and 15,000 colleges, incorporating approximately 10 million
students and 0.5 million teachers. This makes it the second largest higher
education system in the world. The overall expansion over a period of time has
been appreciable, with student enrolment growing at 5 percent annually over the
past two decades. In spite of all this increase in enrolment, only 7.2 percent of
the population in age group 17 to 23 constitute the participating group.
The private sector in Indian education has a different magnitude of funding
assistance16. In fact, one may arrive at an unacceptable conclusion that India
has a big private sector involvement in higher education.
India has a long history of private institutions subsequently getting attached to
the state17. Reliance on state for resources has almost doubled, i.e., from 49
percent in the beginning of the fifth decade to about 84 percent in the beginning
of the last decade of the 20th
century. On the other hand, the contribution of non-
state funding resources has declined drastically.
The structural adjustment policies, which envisaged macroeconomic stabilization
and adjustment, led to a reduction in public expenditures and the introduction of
cost recovery measures, accompanied by policy measures toward the ‘direct
privatization of higher education’. The new economic reforms and the policy of
government is currently encouraging augmentation of resources, exacerbating
cost recovery on a larger scale. The fear expressed by many
economists/educationalists is that with privatization, the justification for
government funding18 would be hit hard but this statement can be considered
too early. The public sector system, which has been built over a long period of
time, will not fall down suddenly. The role of the government in funding shall
[162]
remain. There has already been large-scale investment by the government, so
the fear that private investment alone in higher education would be socially sub-
optimal does substantiate in the case of India19. Although many committees
(UGC 1997, 1999 & 2000) and reports (Srivatava and Sen, 1997; Ambani and
Birla, 2001) have called for cost recovery and reforms, the road to it is still
imprecise.
2.14, Trade Barriers The barriers with general application are:
• The majority of barriers are from an exporter country’s point of view and
focus on the supply modes “cross border supply” and “commercial
presence”:
• There is a certain lack of transparency of government regulatory, policy and
frameworks.
• Domestic laws and regulations are administered in an unfair manner.
•The Subsidies are not made and also not known in a clear and transparent
manner.
• The treatment of tax discriminates against foreign suppliers.
•The treatment of Foreign partners are less favorable than other providers.
The barriers to higher education services regards to cross-border supply;
• There are inappropriate restrictions on electronic transmission of course
materials.
• There is Lack of opportunity to qualified degree granting institution.
[163]
• There are Requirements to use local partners, with at the same time a
barrier against entering into and exiting from joint ventures with local or
non-local partners on a voluntary basis.
• The fees/taxes imposed on licensing or royalty payments are very
excessive.
• There are Restrictions on use/ import of educational materials.
The principal barriers to consumption abroad
(e.g.: students studying in another country) are
• The major reasons that restrict the entry and temporary stay of students, like
visa requirements and costs, foreign currency and exchange controls etc.
• The Recognition of prior qualifications from other countries.
• There are Quotas on numbers of international students in total and at a
particular institution.
• The students are Restricted for employment while they are studying.
• Recognition of new qualification by other countries .
For trade via commercial presence
common barriers include
• The inability to gain the required licenses to grant a qualification.
• The Subsidies provided solely to local institutions.
[164]
• Nationality requirements.
• Restrictions on recruitment of foreign teachers.
• Government monopolies.
• Difficulty in obtaining authorization to establish facilities.
• Prohibition of higher education, adult education and training services offered
by foreign entities.
Presence of natural persons (e.g. teachers travelling to foreign country to teach) are
• Economic needs test
• Recognition of credentials
• Minimum requirements for local hiring being disproportionately high
• Repatriation of earnings is subject to excessively costly fees or taxes for
currency conversion.
An insight into the negative features of private higher education system
throws light on quality disparity, inequality, overloaded faculties, lack of
research etc. But this system has its own very strong successes. The
private education institutions have been able to fulfil the private demand
for higher education, in the absence of the capacity of the state to do so. It
is these institutions that have made higher education accessible. The
existence of a high number of private institutions and high enrolment in
private sector has been able to save public resources. On the other hand,
the Indian higher education is facing a financial crisis. The government is
not in a position to even sustain the present system, although expansion
[165]
remains a dream. Because of growing private demand and in the absence
of sufficient resources, the role of the private sector has to be recognized
by the government while including profit as an objective of their entrance
and existence. It is here where many positive features of the private higher
education of the Philippines can be replicated owing to its long
experience.
3.1, Potential for import - export in India
Philippines-India
There is a limited economics relation between India and Philippines. At the end
of the Cold War has not significantly changed worldview of the policy makers &
elite in the Philippines who have customarily been rather apathetic towards their
relationship with India. It is the only ASEAN country with which high level
contacts not been taken place in recent months, or can say is being currently
contemplate. Both sides that India & Philippines need to address this gap in joint
relationship.
The potential arrangement of the Indian graduates of the Asian Institute of
Management (AIM), many of whom are now in responsible positions in business
in India, has also not been fully exploited. This network may be an important
avenue for further economic linkages. The AIM, based in Manila, it lead in this
regard, and strengthen its links with management institutes in India. This appears
to be the only important involvement of a major Philippine corporation in India.
3.2, Business Opportunities in future
One important opportunity in this sector is e-learning or the introduction of ICT
tools to convey education productively. There is noteworthy demand for
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computer hardware & software due to government’s thrust to provide computer
laboratories in both private and public schools.
The Philippines is well-known to be one of the top suppliers of labour in
worldwide markets and thus, there is high demand for training in the areas of
technical, vocational, as well as professional levels. There is a high demand in
nursing, care-giving, physical therapy, cosmetology & wellness skills,
construction, welding, and IT skills. Together with skills training, there is a need
for worldwide qualification and authorization services among the thousands of
workers who want to work abroad.
explosion of call centers, medical & legal record outfits, computer-aided design
(CAD) facilities, accounting and other back-office operations, opens opportunities
for businesses providing English language training, IT courses, and other
relevant training modules. A number of UK colleges and universities have shown
attention to find local partners and/or offer distant learning modules to cater to
Filipino students.
Getting into the market Doing business in the Philippines is highly relational. It is usually modeled on the
US business culture; a formal introduction by a trusted third party is almost
always the best way to enter the market.
Doing business in the Philippines gives an overview of the Philippines’ economy,
business culture, potential opportunities and other relevant issues.
3.3, Conclusion and Recommendations The major conclusion that we arrive from our study are mention below;
• To attain the 2015 goal and targets of Education for All, the country needs
to Implement policies, programs and projects that will address the needs
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of specific Learners, particularly those belonging to the un-reached and
under-served groups.
Geophysical Factors that Affect the attainment of Education for All The Philippine basic education system should be flexible and responsive to the needs of learners as affected by non-school factors, such as:
a. Economic Factors
• The country is still dependent on agriculture, fishing and forestry but at the
same time an emerging global market for business process, ICT spare
parts, medical services, to name a few, and this will require DepEd’s
implementation of a more relevant basic education curriculum in relation to
local and global needs.
• The country is a significant source of migrant workers – schools need to
be responsive to the needs of schoolchildren of migrant workers; there is a
need to explore possible inclusion in the DepEd and/or LGU budget grants
for pupils/ students of very poor families to cover other schooling-related
expenses.
b. Social Factors
• The increasing percentage of school-age population requires the
government to effectively and efficiently implement fiscal reforms as this
will have major implications in attaining the goal of education for all
.Moreover, mobilization of resources from local governments, private
sector and other partners will also help the country finance the increasing
budgetary requirements of EFA.
c. Geographical and geophysical factors
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• DepEd must seriously consider adopting a flexible school calendar – e.g.,
first three months of the school calendar (June to August) are the rainy
months with frequent flooding in Metro Manila; supervision of schools is
very difficult and dangerous during the rainy and typhoon season.
• There is need to adopt differentiated designs for school facilities to
withstand natural calamities such as typhoons and earthquakes
Governance, Management and Finance
a. Increase public and private investment in basic education and provide more
resources for depressed, disadvantaged and underserved areas
b. Strengthen governance and management of the system Grand Alliance
• Establish and operationalize the EFA Implementation Coordination Machinery
by tapping existing EFA-related structures at different levels
• Translate the National EFA Plan into Regional, Provincial, City and Municipal
Levels
• Expand/restructure the local school board to make it more responsive to EFA
needs (including Early Childhood Education and Alternative Learning System)