2. Agreement between two or more countries to establish a free trade area where commerce in goods and services can be conducted across their common borders, with reduced or no tariffs or hindrances. Agreement between two or more countries to establish a free trade area where commerce in goods and services can be conducted across their common borders, with reduced or no tariffs or hindrances.

3. Maintain Competitiveness Maintain Competitiveness Cross border industrial complementation Cross border industrial complementation Sustain inflows of investments Sustain inflows of investments Mutual support on issues of common interest Mutual support on issues of common interest Re-enforce one another’s strength and weakness Re-enforce one another’s strength and weakness

4. Asean Free Trade Area ( AFTA) Asean Free Trade Area ( AFTA) - ASEAN 6 – Brunei, Indonesia, Malaysia, - ASEAN 6 – Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand (covered tariff elimination on 99% of tariff lines) Philippines, Singapore, Thailand (covered tariff elimination on 99% of tariff lines) Asean-China Free Trade Area (ACFTA) Asean-China Free Trade Area (ACFTA) Asean –Korea Free Trade Area (AKFTA) Asean –Korea Free Trade Area (AKFTA)

5. Asean-Australia-New Zealand Free Trade Area (AANZFTA) Asean-Australia-New Zealand Free Trade Area (AANZFTA) Asean-Japan Comprehensive Economic Partnership Agreement (AJCEPA) Asean-Japan Comprehensive Economic Partnership Agreement (AJCEPA) Philippines-Japan Economic Partnership Agreement (PJEPA) Philippines-Japan Economic Partnership Agreement (PJEPA)

6. Coconut oil Coconut oil - Crude - Crude - Refined (RBD, Cochin) - Refined (RBD, Cochin) - Virgin Coconut Oil - Virgin Coconut Oil Desiccated Coconut Desiccated Coconut Copra Meal Copra Meal Copra Copra

7. Oleochemicals Oleochemicals - Coconut fatty acids - Coconut fatty acids - Coconut methyl ester - Coconut methyl ester - Coconut fatty alcohol - Coconut fatty alcohol - Amides - Amides - Glycerin - Glycerin - Biodiesel - Biodiesel

8. Year Coconut Oil Desiccated Coconut Copra Meal 1/ Oleo- chem 2/ Total 2/ 20051,1521264301222,145 20061,0701364301242,034 2007887131423991,708 2008848143435681,634 2009826116400231,515 20101,343109724322,332 (In ‘000 MT) 1/ Not included in total 2/ Copra terms Source of basic data: Philippine Coconut Authority

9. YearCoconut Oil Dessicated Coconut Copra Meal Oleo- chem Total 20056571272759870 20065771393060806 20077291574360989 20081,03424058641,396 20095881464813794 20101,25715378171,506 (In Million US$ FOB) Source of basic data: Philippine Coconut Authority

10. Commodity20102009 % Change Copra30384260.7 Coconut Oil 1,342,511826,23762.5 Copra Meal 1/ 724,376399,78281.2 Desiccated Coconut 109,171116,421-6.2 Oleochem 2/ 31,69423,37535.6 TOTAL 2/ 2,331,7531,514,94253.9 1/ Not included in total 2/ Copra terms Source of basic data: Philippine Coconut Authority (In Metric Tons)

11. Commodity20102009 % Change Copra23960298.3 Coconut Oil 1,257,214588,016113.8 Copra Meal 78,32247,92663.4 Desiccated Coconut 152,616145,6574.8 Oleochem17,41712,67937.4 Others121,49089,68435.5 TOTAL1,627,297884,02284.1 Source of basic data: Philippine Coconut Authority (In ‘000 FOB US$)

12. Source of basic data: Philippine Coconut Authority (In US$/MT) Commodity20102009 % Change Copra789.10708.0511.4 Coconut Oil936.46711.6831.6 Copra Meal108.12119.88-9.8 Desiccated Coconut 1,397.951,251.1311.7

13. Commodity 2011 f/ 2010 % Change Copranil303- Coconut Oil 900,0001,342,511-33.0 Desiccated Coconut 110,000109,1710.8 Copra Meal 1/ 450,000724,376-37.9 Oleochemicals 2/ 30,00031,694-5.3 TOTAL 2/ 1,628,6392,331,753-30.2 f/ Forecast 1/ Not included in total 2/ Copra terms Source of basic data: Philippine Coconut Authority (In Metric Tons)

14. r Revised f Forecast Sources of basic data: Philippine Coconut Authority Industry Reports to UCAP Research 2,257 2,388 2,663 2,863 2,415 (In ‘000 MT, Copra terms)

15. Source of basic data: Philippine Coconut Authority No. of Mills/Plants Annual Capacity Oilmilling63 4.501 Million MT Copra Refining39 1.435 Million MT RB/RBD Oil Desiccated Coconut 10 159,610 MT DCN product Oleochemicals10 250,000 MT CNO throughput Coco Biodiesel 12 400,000 MT output

16. Destination2010% Share2009% Share Europe654,21048.7347,81242.1 USA450,61633.6355,03243.0 China103,7287.727,7703.4 ASEAN (Indonesia, Malaysia, Singapore, Vietnam) 61,7854.614,4841.8 Japan47,0083.543,4815.3 Korea2,4950.210,6331.3 Australia1690.02610.0 New Zealand370.0300.0 Others22,4641.726,7323.2 Total FTA Markets (MT)215,22216.096,65911.7 ( ’ 000 US$)192,32415.369,15711.8 TOTAL (MT)1,342,511100.0826,237100.0 ( ‘ 000 US$)1,257,214100.0588,016100.0 (In Metric Tons) Source of basic data: Philippine Coconut Authority

17. 2010 1,342,511 MT China 7.7% Europe 48.7% US 33.6% Japan 3.5% Others 1.9% 2009 826,237 MT China 3.4% Europe 42.1% US 43.0% Japan 5.3% Others 3.3% Source of basic data: Philippine Coconut Authority Asean 4.6% Korea 0.2% Asean 1.8% Korea 1.3%

18. (In Metric Tons) Destination2010% Share2009% Share USA1,49854.71,08260.1 Canada56920.849627.6 Europe37013.51377.6 Australia1575.7231.3 Asean (Brunei, Indonesia, Malaysia, Singapore, Thailand, Vietnam) 281.0120.7 China90.320.1 Korea90.320.1 New Zealand80.310.1 Japan50.230.1 Others843.1432.4 Total FTA Markets (MT)2167.9432.4 ( ‘ 000 US$)5756.92053.7 TOTAL (MT)2,737100.01,801100.0 ( ‘ 000 US$)8,341100.05,588100.0 Source of basic data: Philippine Coconut Authority

19. Destination2010 % Share 2009 Europe41,17137.748,98242.1 USA27,99525.629,18725.1 Australia Australia6,7926.26,3005.4 Korea Korea2,1512.02,0361.7 Japan Japan2,0151.82,5582.2 China China1,5641.41,6681.4 Asean (Indonesia, Malaysia, Singapore, Thailand, Vietnam) Asean (Indonesia, Malaysia, Singapore, Thailand, Vietnam)1,1081.01,2261.1 New Zealand New Zealand7070.61,0540.9 Others25,66823.521,37418.4 Total FTA Markets (MT) 14,33713.114,84212.7 (‘000 US$) (‘000 US$)19,91313.020,25713.9 TOTAL (MT) 109,171100.0116,421100.0 (‘000 US$) (‘000 US$)152,616100.0145,657100.0 (In Metric Tons) Source of basic data: Philippine Coconut Authority

20. Destination2010 % Share 2009 Korea Korea383,49752.9232,92758.3 China China159,43622.016,1704.0 Asean (Singapore, Vietnam) Asean (Singapore, Vietnam)130,76918.1111,10927.8 Japan Japan17,6472.416,3514.1 Australia Australia2,7260.41,1330.3 New Zealand New Zealand1,1200.2-- Others22,0925.529,1817.3 Total FTA Markets (MT) 695,19596.0377,69094.4 (‘000 US$) (‘000 US$)60,76677.645,22994.4 TOTAL (MT) 724,376100.0399,782100.0 (‘000 US$) (‘000 US$)78,322100.047,926100.0 (In Metric Tons) Source of basic data: Philippine Coconut Authority

21. Destination2010 % Share 2009 China China9,98631.56,77929.0 Asean (Indonesia, Malaysia, Singapore, Thailand, Vietnam) Asean (Indonesia, Malaysia, Singapore, Thailand, Vietnam)3,0829.75352.3 Korea Korea1,3674.33,54815.2 Japan Japan1,1073.59374.0 Australia Australia620.21480.6 New Zealand New Zealand260.1340.1 Europe5,41117.13,26814.0 Others10,65333.68,12634.8 Total FTA Markets (MT) 15,63049.311,98151.2 (‘000 US$)* (‘000 US$)*27,25166.421,76568.6 TOTAL (MT) 31,694100.023,375100.0 (‘000 US$)* (‘000 US$)*41,060100.031,710100.0 (In Metric Tons, Copra Terms) Source of basic data: Philippine Coconut Authority * Includes value of amides, glycerin

22. Coconut Shell Coconut Shell - charcoal - charcoal - activated carbon - activated carbon Coconut Coir Coconut Coir - fiber - fiber - peat/dust - peat/dust - geotextile - geotextile

23. - stitched fiber - stitched fiber - pads - pads - plant liners - plant liners - pots and hangers - pots and hangers Coconut Water Coconut Water Coconut Sugar Coconut Sugar Coconut Vinegar Coconut Vinegar Handicraft items Handicraft items

24. Destination2010 % Share 2009 Japan Japan16,83657.522,85965.8 China China6,26021.46,09517.5 Korea Korea4,43115.14,17212.0 Asean (Singapore) Asean (Singapore)840.37882.3 Others1,6545.78332.4 Total FTA Markets (MT) 27,61194.333,91497.6 (‘000 US$) (‘000 US$)8,91496.111,01298.4 TOTAL (MT) 29,265100.034,746100.0 (‘000 US$) (‘000 US$)9,278100.011,190100.0 (In Metric Tons) Source of basic data: Philippine Coconut Authority

25. Destination2010 % Share 2009 Europe5,60218.94,06020.3 USA3,82512.93,64818.2 Japan Japan6,75322.83,79518.9 Asean (Indonesia, Malaysia, Singapore, Thailand, Vietnam Asean (Indonesia, Malaysia, Singapore, Thailand, Vietnam2,5858.72,11610.6 Korea Korea1,7355.91,1555.8 Australia Australia1,4815.04592.3 China China7212.43351.7 Others6,86923.24,46022.3 Total FTA Markets (MT) 13,27544.97,86039.2 (‘000 US$) (‘000 US$)18,88446.49,26435.9 TOTAL (MT) 29,572100.020,027100.0 (‘000 US$) (‘000 US$)40,692100.025,808100.0 (In Metric Tons) Source of basic data: Philippine Coconut Authority

26. Destination2010 % Share 2009 China China4,19249.02,92836.7 Korea Korea1,51217.71,78222.3 Japan Japan5676.63564.5 Asean (Malaysia, Singapore Asean (Malaysia, Singapore3654.36257.8 Australia Australia--70.1 Others1,91622.42,28228.6 Total FTA Markets (MT) 6,63677.65,69871.4 (‘000 US$) (‘000 US$)1,65184.81,03878.2 TOTAL (MT) 8,551100.07,980100.0 (‘000 US$) (‘000 US$)1,946100.01,328100.0 (In Metric Tons) Source of basic data: Philippine Coconut Authority

27. Destination2010 % Share 2009 USA1,273,32470.488,52518.3 Europe72,2804.032,4936.7 Australia Australia59,8403.336,1307.5 Japan Japan20,8861.249,12310.2 China China18,7501.0-- New Zealand New Zealand2,8850.21,2180.3 Korea Korea--5380.1 Others359,61819.9274,35556.7 Total FTA Markets (liters) 102,3615.787,00918.0 (‘000 US$) 915.07420.0 TOTAL (liters) 1,807,583100.0483,772100.0 (‘000 US$) (‘000 US$)1,842100.0368100.0 (In liters) Source of basic data: Philippine Coconut Authority

28. Destination2010 % Share 2009 USA28451.322253.0 Middle East 11220.24510.8 Australia Australia285.0307.1 Japan Japan163.0307.2 New Zealand New Zealand91.641.0 Korea Korea91.610.3 Asean (Singapore, Vietnam) Asean (Singapore, Vietnam)20.400.1 China China10.1-- Others9316.88620.6 Total FTA Markets (MT) 6511.76515.6 (‘000 US$) (‘000 US$)4810.64915.1 TOTAL (MT) 554100.0418100.0 (‘000 US$) (‘000 US$)450100.0323100.0 (In Metric Tons) Source of basic data: Philippine Coconut Authority

29. Destination2010 % Share USA397,18542.8 Europe207,77222.4 China China106,77611.5 Korea Korea7,2260.8 Australia Australia6,9200.7 New Zealand New Zealand3,7030.4 Asean (Malaysia) Asean (Malaysia)1,5120.2 Japan Japan1,0520.1 Others196,35821.1 Total FTA Markets (US$) 127,18914.0 TOTAL (US$) 928,504100.0 (Value in US$ FOB) Source of basic data: Philippine Coconut Authority

30. Commodity 20092010VolumeValueVolumeValue Coconut Oil 43,48132,229,19047,00846,786,049 Desiccated Coconut 2,5583,248,5602,0152,924,252 Copra Meal 16,3513,492,56717,6473,593,040 Coco Shell Charcoal 22,8598,530,67416,8366,796,000 Activated Carbon 3,7954,255,2056,75310,054,541 Oleochemicals937732,2471,1071,002,884 Glycerin10,73711,375,42216,08814,399,495 Nata de Coco 4,7133,965,5003,8153,653,300 Coco Milk Powder 251866,915169596,232 Liquid Coconut Milk 458705,885304493,830 Others (16 products) 675640,065728445,664 TOTAL VALUE 70,042,23090,745,287 Source of basic data: Philippine Coconut Authority (Volume in MT, Value in US$ FOB)

31. China has huge potential. Currently, it leads in coconut oil, oleochemicals, coir products, and handicraft items. Other products still have room for expansion. China has huge potential. Currently, it leads in coconut oil, oleochemicals, coir products, and handicraft items. Other products still have room for expansion. Japan is market leader in coconut shell products as well as coconut water. It also has significant market share in coconut oil, desiccated coconut, and oleochemicals Japan is market leader in coconut shell products as well as coconut water. It also has significant market share in coconut oil, desiccated coconut, and oleochemicals

32. Korea is top copra meal market and demand is still rising. There has been more inquiries for the product, reason why Korean beef is the best in the world according to buyers. It also imports substantial amount of coconut oil, desiccated coconut, oleochemicals, charcoal and activated carbon. Korea is top copra meal market and demand is still rising. There has been more inquiries for the product, reason why Korean beef is the best in the world according to buyers. It also imports substantial amount of coconut oil, desiccated coconut, oleochemicals, charcoal and activated carbon.

33. ASEAN remains a significant market for coconut oil, mainly Malaysia and Indonesia. In the case of copra meal, Vietnam handles bulk of our export in ASEAN. It used to be second to Korea and now overtaken by China. ASEAN remains a significant market for coconut oil, mainly Malaysia and Indonesia. In the case of copra meal, Vietnam handles bulk of our export in ASEAN. It used to be second to Korea and now overtaken by China. Australia leads in desiccated coconut in the FTA markets and in virgin coconut oil and vinegar. Australia leads in desiccated coconut in the FTA markets and in virgin coconut oil and vinegar.

34. There has been little utilization in a number of coconut products in FTA markets, perhaps due to: There has been little utilization in a number of coconut products in FTA markets, perhaps due to: -Low awareness about the product in the FTA market; - Low awareness on FTAs and benefits by exporting FTA country; - Need for education campaign about FTAs, products covered, tariff lines and tariff schedules in both countries, among others.