1. Export Performance and Proposed Export Targets CONSULTATION FOR PEDP 2014-2016

2. 2013 EXPORTS Exports in 2013 expanded 7.7% relative to 2012 level but fell short of target.

3. ACTUAL VS. TARGET EXPORTS

4. COMPARATIVE EXPORTS Philippine exports compared to its neighbors PHLVNMINATHAMAL Exports, 2012, US$ billion70132201280265 Goods52121190230227 Services1811235038 CAGR, 2008-12 Total 5.9 23.2 11.9 6.0 5.0 Goods 2.0 24.3 11.5 9.3 4.5 Services 21.6 12.6 (18.9) 14.9 19.1

5. WHAT’S WRONG EXPORT PERFORMANCE

6. COMPOSITION OF PH EXPORTS, 2006 VS. 2013

7. DESTINATION OF PH EXPORTS, 2006 VS. 2013

8. WHAT’S WRONG WITH PH EXPORTS Are we exporting products whose trade in world market is increasing? Are we outperforming other countries exporting the same product?

9. TRADE COMPETITIVENESS DYNAMIC Champions or winners in growth market ◦ Trade in product is growing faster than world trade and the country’s share in world market is increasing Underachievers or losers in growth market ◦ Trade in product is growing faster than world trade and the country’s share in world market is shrinking

10. TRADE COMPETITIVENESS DYNAMIC Achievers in adversity ◦ Trade in product is declining or less than growth in world trade and the country’s share in world market is increasing Losers in declining market ◦ Trade in product is declining or less than growth in world trade and the country’s share in world market is shrinking

11. TRADE COMPETITIVENESS MAP DYNAMIC Increase in world market share since 2006 (PH export growth – world’s export growth) Annual growth of world exports since 2006 6.9 0 Champions Underachievers Achievers in adversity Losers in declining markets

12. PHILIPPINE TRADE COMPETITIVENESS MAP, 2013 DYNAMIC

13. PHILIPPINE TRADE COMPETITIVENESS, 2013 DYNAMIC 6.9 0 Champions Underachievers Achievers in adversity Losers in declining markets 18.8% 4.8% 12.3%64.1%

14. CHAMPIONS Product trade is growing faster than world trade and PH’s share in world market is increasing Copra meal/cake Gold Mangoes Misc. manufactured articles, n.e.s. Other manufactures Other mineral products Other sugar and products Processed food and beverages Rice Tobacco unmanufactured

15. UNDERACHIEVERS Product trade is growing faster than world trade and PH’s share in world market is shrinking Chromium ore Coconut oil Coffee raw, not roasted Dessicated coconut Footwear Natural rubber Petroleum products Pineapple concentrates Travel goods and handbags

16. ACHIEVERS IN DIVERSITY (SELECTED) Product trade is declining or growing slower than world trade and PH’s share in world market is increasing Abaca fiber Automotive electronics Baby carriages, toys, games and sporting goods Bananas Basketworks, wickerwork & other articles of plaiting material Canned pineapple Centrifugal and refined sugar Chemicals Fish, fresh or preserved Other fruits and vegetables Logs Molasses Wood manufactures

17. LOSERS IN DECLINING MARKET Product trade is declining or growing slower than world trade and PH’s share in world market s is shrinking Copper metal Electronic data processing Furniture and fixtures Garments Iron and steel Nickel Non-metallic mineral manufactures Textile yarns/fabrics Veneer sheets/corestocks

18. WHAT’S WRONG WITH PH EXPORTS Is world trade in our big ticket exports expanding fast?

19. TRADE COMPETITIVENESS STRUCTURAL Stars ◦ Trade in product is growing faster than world trade and country’s share in world market is significant Emerging ◦ Trade in product is growing faster than world trade and country’s share in world market is still small or insignificant

20. TRADE COMPETITIVENESS STRUCTURAL Traditional ◦ Trade in product is declining or less than growth in world trade and country’s share in world market is significant Snail ◦ Trade in product is declining or less than growth in world trade and the country’s share in world market is small or insignificant

21. TRADE COMPETITIVENESS MAP DYNAMIC Share in World Market Annual growth of world exports since 2006 6.9 0 Stars TraditionalSnail 0.4 Emerging

22. PHILIPPINE TRADE COMPETITIVENESS MAP, 2013 STRUCTURAL

23. PHILIPPINE TRADE COMPETITIVENESS, 2013 STRUCTURAL 6.9 0 STARSEMERGINGs TRADITIONALSNAIL 8.5% 15.1% 17.7%58.7%

24. STARS Product trade is growing faster than world trade and PH’s world market share is significant Chromium ore Coconut oil Copra meal/cake Dessicated coconut Mangoes Other mineral products Pineapple Concentrates Tobacco unmanufactured

25. EMERGING Product trade is growing faster than world trade and PH’s world market share is small or insignificant Coffee raw, not roasted Footwear Gold Misc. manufactured articles, n.e.s. Natural rubber Other manufactures Other sugar and products Petroleum products Rice Travel goods and handbags

26. TRADITIONAL (SELECTED) Product trade is declining or growing slower than world trade and PH’s world market share is significant Abaca fiber Automotive electronics Bananas Basketworks, wickerwork & other articles of plaiting material Canned pineapple Centrifugal and refined sugar Copper metal Electronic Data Processing Electronic equipment and parts Fish, fresh or preserved Garments Molasses Wood manufactures

27. SNAILS (SELECTED) Product trade is declining or growing slower than world trade and PH’s world market share is small or insignificant Baby carriages, toys, games and sporting goods Chemicals Consumer electronic Control and instrumentation Copra Furniture and fixtures Iron and steel Machinery and transport equipment Nickel Textile yarns/fabrics Veneer sheets/corestocks

28. BOTTOM LINE 76% of exports in slow and declining markets Nearly 50% in declining markets Very few stars (products with significant share in growing world market) Most big ticket exports in slow and declining markets

29. CHANGES IN EXPORTS EXPORT GROWTH OR STAGNATION Increase old products in old markets Introduce new products in new markets Introduce new products in old markets Introduce old products in new markets Diversify products in old markets Reduce old products in old markets Stop exporting products in old markets

30. DECOMPOSITION OF PH EXPORT GROWTH EXPLAINING PH EXPORT PERFORMANCE Change in PH exports (2008-12) due toUS$ billion Increase in existing products in established markets7.4 Introduction of new products in new markets- Introduction of new products in established markets0.3 Introduction of existing products in new markets- Product diversification in established markets- Decrease in existing products in established markets-4.7 Extinction of exports of products in established markets-0.03 TOTAL CHANGE3.0

31. COMPARATIVE DECOMPOSITION OF EXPORT GROWTH Change in exports (2008-12) due toPHLMALTHAVNM Increase in existing prod. in established markets7.433.458.642.5 Intro of new products in new markets---- Intro of new products in established markets0.30.10.63.2 Intro of existing products in new markets-0.05-0.03 Product diversification in established markets-3.1-17.7 Decrease in existing products in est. markets-4.7-5.7-4.7-3.9 Extinction of exports in established markets-0.03-3-0.5-1.4 TOTAL CHANGE3.028.054.058.0 In US$ BILLION

32. HOW DO WE GET THERE EXPORT TARGETS

33. Correcting Export Data FOB US$ million 20092010201120122013 Recorded38,43651,49848,30552,10053,978 Less: Special transactions*889835910550282 Corrected exports37,54750,66347,39551,54953,969 Growth rate (y-o-y) based on recorded -21.734.0-6.27.93.6 Growth rate (y-o-y) based on corrected -22.134.9-6.58.84.2 *Samples, replacement/returned, temporary imports/exports, etc.

34. Annual Growth of Exports, 2006-13 Selected Products CAGR Bananas12.3 Basketworks, wickerwork & other articles of plaiting matl-0.7 Canned Pineapple7.3 Chemicals18.5 Coconut oil7.3 Fish, fresh or preserved11.6 Iron and steel-6.0 Mangoes12.6 Molasses10.3 Natural rubber6.8 Other fruits and vegetables9.3 Pineapple concentrates6.6 Processed food and beverages14.0

35. Export Targets DBCC 2013*201420152016 In US$ billion GOODS54.057.261.868.0 SERVICES21.624.828.833.4 TOTAL75.682.090.6101.3 Growth rate (y-o-y) GOODS6810 SERVICES1516 TOTAL81012

36. SCENARIOS and TARGETS in percent 201420152016 Business as Usual (BAU)6.0 – 6.67.2 – 8.18.4 – 9.6 S1: Boost the growth of increasing exports (1% above trend) 6.0 – 6.87.2 – 8.38.5 – 9.8 S2: Arrest the decline of decreasing exports 8.1 – 9.08.9 – 9.99.7 – 10.9 S3: Moderate the decline of decreasing exports (by 50%) 7.0 – 7.98.0 – 9.09.0 – 10.2 S4: Boost the growth of increasing exports and arrest the decline of decreasing exports 8.2 – 9.19.0 – 10.09.8 – 11.1

37. BAU IN PERCENT; FOB US$ MILLION CAGR201420152016 Bananas11.7 – 12.91,0191,1381,271 Basketworks, wickerwork-0.75049 Canned Pineapple6.9 – 7.7188201215 Chemicals17.6 – 19.42,9023,4124,011 Coconut oil7.0 – 7.71,0171,0881,164 Fish, fresh or preserved11.1 – 12.2620688764 Iron and steel-5.7 - -6.3147139131 Mangoes12.0 – 13.2788798 Molasses9.8 – 10.8262831 Natural rubber6.5 – 7.2798489 Other fruits and vegetables8.9 – 9.8236257280 Pineapple concentrates6.2 – 6.998104111 Proc. food & beverages13.3 – 14.71,6531,8732,122

38. CAGR201420152016 Bananas11.8 – 13.01,0201,1401,275 Basketworks, wickerwork-0.75049 Canned Pineapple7.0 – 7.7188202216 Chemicals17.6 – 19.62,9073,4224,028 Coconut oil7.0 – 7.81,0181,0891,166 Fish, fresh or preserved11.2 – 12.3621690767 Iron and steel-6.0147138130 Mangoes12.1 – 13.4788898 Molasses9.9 – 10.9262831 Natural rubber6.5 – 7.2798489 Other fruits and vegetables9.0 – 9.9236257280 Pineapple concentrates6.3 – 7.098104111 Proc. food & beverages13.4 – 14.81,6551,8772,130 S1 : BOOST GROWTH IN PERCENT; FOB US$ MILLION

39. CAGR201420152016 Bananas11.7 – 12.91,0191,1381,271 Basketworks, wickerwork0.050 Canned Pineapple6.9 – 7.7188201215 Chemicals17.6 – 19.42,9023,4124,011 Coconut oil7.0 – 7.71,0171,0881,164 Fish, fresh or preserved11.1 – 12.2620688764 Iron and steel0.0156 Mangoes12.0 – 13.2788798 Molasses9.8 – 10.8262831 Natural rubber6.5 – 7.2798489 Other fruits and vegetables8.9 – 9.8236257280 Pineapple concentrates6.2 – 6.998104111 Proc. food & beverages13.3 – 14.71,6531,8732,122 S2 : ARREST DECLINE IN PERCENT; FOB US$ MILLION

40. CAGR201420152016 Bananas11.7 – 12.91,0191,1381,271 Basketworks, wickerwork-0.450 Canned Pineapple6.9 – 7.7188201215 Chemicals17.6 – 19.42,9023,4124,011 Coconut oil7.0 – 7.71,0171,0881,164 Fish, fresh or preserved11.1 – 12.2620688764 Iron and steel-3.0152147143 Mangoes12.0 – 13.2788798 Molasses9.8 – 10.8262831 Natural rubber6.5 – 7.2798489 Other fruits and vegetables8.9 – 9.8236257280 Pineapple concentrates6.2 – 6.998104111 Proc. food & beverages13.3 – 14.71,6531,8732,122 S3: MODERATE THE DECLINE IN PERCENT; FOB US$ MILLION

41. CAGR201420152016 Bananas11.8 – 13.01,0201,1401,275 Basketworks, wickerwork0.050 Canned Pineapple7.0 – 7.7188202216 Chemicals17.7 – 19.62,9073,4224,029 Coconut oil7.0 – 7.81.0181,0891,166 Fish, fresh or preserved11.2 – 12.33.0533,3193,608 Iron and steel0.0156 Mangoes12.1 – 13.4788898 Molasses9.9 – 10.9262831 Natural rubber6.5 – 7.2798489 Other fruits and vegetables9.0 – 9.9236257280 Pineapple concentrates6.3 – 7.098105111 Proc. food & beverages13.4 – 14.81,6551,8772,130 S4 : BOOST GROWTH & ARREST DECLINE IN PERCENT; FOB US$ MILLION

42. joyabrenica@catif.org 7 April 2014