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

[116]

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

[117]

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

[118]

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

[120]

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

[121]

• 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.

[123]

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

[124]

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

[128]

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

[166]

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

[167]

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

[168]

• 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)