2015/SOM3/CONF/011 Services Trade and Investment: The Philippine Experience
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1 2015/SOM3/CONF/011 Services Trade and Investment: The Philippine Experience Submitted by: Philippine Chamber of Commerce and Industry Regional Conference of Services Coalitions Cebu, Philippines 7 September 2015
2 Services Trade and Investment: The Philippine Experience By GEORGE T. BARCELON Director for Services Philippine Chamber of Commerce and Industry THE ROLE SERVICES IN THE PHILIPPINE ECONOMY Services Share in Philippine GDP Agriculture Source: Banko Sentral ng Pilipinas 1
3 Employment Generated by Services Sector 25 Total Employment in Million [] [] 0 SERVICES INDUSTRY AGRICULTURE THE ROLE SERVICES IN THE PHILIPPINE ECONOMY Main Contributors to Services Sector Growth OFW Remittance BPO Tourism 2
4 PHILIPPINE COMPETITIVENESS ADVANTAGE AND POTENTIALS FOR GROWTH IT-BPO Large, educated workforce with strong English language capabilities, high flexibility and adaptability, attention to details, and creativity Attractive fiscal incentives for foreign investors Expansion of the real estate sector TOURISM Rich natural tourist attractions that are scattered all over the Philippine archipelago Innate hospitality of Filipinos Proficiency in English OFW Pool of highly skilled and creative Filipino professionals scattered all over the world CHALLENGES AND OPPORTUNITIES CHALLENGES Constitutional restrictions on market access, national treatment and equity participation Slow technological advances especially in ICT, including the high cost of interest in the Philippines Inefficient Transport system High cost of unreliability of power Lack of infrastructure Absence of sound policies Concentration of the growth on the sector in urban areas causing internal migration and congesting major cities 3
5 Strengthen the market for IT-BPO and other modern services, broaden its operations to the suburbs and rural areas, and expand to knowledgebased services. LEVERAGING THE GROWTH OF SERVICES Capitalize on our strength and build on it further Prioritize ICT infrastructure Maintain, if not bolster attractive incentives to invite more FDIs Focus on education and training Further develop the tourism industry to maximize its potential as a growth driver and employment generator. Building more access roads to lesser known destinations. Strategically place more competitive accommodations in undeveloped yet promising destinations Better incentives for Tourism investments in undeveloped sites Intensify training especially for the locals CHALLENGES AND OPPORTUNITIES Develop the full potential of creative industries, enhancing its competitive advantage, and improving its reputation to become better recognized. Create a specific roadmap for the creative industry Address fundamental legal constraints in the Philippine Constitution that limit the practice of foreign professionals in the country and foreign equity in media and advertising Hasten inclusion of more professions in MRAs Create more opportunities and jobs for the Filipino professionals Convene a Services Coalition 4
6 THE PHILIPPINE SERVICES COALITION WHY IS THERE A NEED FOR A COALITION? To bring the players together to significantly serve in developing the priorities that will strengthen the services industry. A Coalition will be able to contribute to the domestic agenda that will enhance services trade and export opportunities To connect and network services providers and businesses and discover areas for cooperation SUMMARY Unlike other economies, export of services rather than manufactured goods has driven the economic growth of the Philippines in the past decades. Despite the big contribution to the economy, the potentials of the sector have not been maximized. To leverage the potentials of the sector, infrastructure development should be prioritized; policy reforms should be put in place to attract more investments; education and training should be strengthened; costs of doing business should be lowered; and a services coalition be organized to make sure that these reforms be realized. 5
7 Thank You! 6
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