STUDY MEETING ON EXPANSION AND DEVELOPMENT OF THE SERVICE INDUSTRY IN ASIA

1. STUDY MEETING ON EXPANSION AND DEVELOPMENT OF THE SERVICE INDUSTRY IN ASIA A COUNTRY PAPER ON THE PHILIPPINE SERVICES INDUSTRY ERMARIE A. MONDEJAR Managing Director, Asset Management Center Development Academy of the Philippines

2. Outline of Presentation • Overview of the Philippine Economy • The Composition of the Philippine Service Industry : its major sub-sectors • Current Status of Service Sector • Government Policy Plans and Regulations: the Philippine roadmap

3. A. Overview of the Philippine Economy

4. GDP GROWTH RATESFY 2005 - 2007 Source: National Statistical Coordination Board

5. GDP BY INDUSTRIAL ORIGIN(% Distribution)FY 205 - 2007 Source: National Statistical Coordination Board

6. SECTORS’ CONTRIBUTION TO GDPIn PercentFY 2007 Source: National Statistical Coordination Board

7. GDP BY INDUSTRIAL ORIGINGrowth Rates (in %)FY 2005 - 2007 Source: National Statistical Coordination Board

8. GNP GROWTH RATESFY 2005 - 2007 Source: National Statistical Coordination Board

9. Other economic related indicators • Total Population = 88.57M (2007 census) • Unemployment rate = 6.3% (2007) • Exports( US $B) = 32.8 (Jan- Aug 2007) • Imports(USB) = 30.4 (Jan-Jul 2007) • Foreign Exchange rate = 41. 50 (Dec.2007)

10. B. The Philippine Services Industry

11. Composition of the Phil. Service Industry • Transportation , Communication and Storage • Trade • Finance • Ownership of Dwellings and Real Estate • Private Services • Government Services

12. GROSS VALUE ADDED IN SERVICESAt 1985 Constant Prices (In Million Pesos)FY 2006 - 2007 Source: National Statistical Coordination Board

13. GROSS VALUE ADDED IN SERVICESAt Current Prices (In Million Pesos)FY 2006 - 2007 Source: National Statistical Coordination Board

14. Major Contributors in Services GDP Growth(2006 and 2007) Constant Prices • Finance 12.2 % • Trade 9.8 % • Private Services 8.8 % Source: National Statistical Coordination Board

15. GROSS VALUE ADDED IN PRIVATE SERVICESAt Constant 1985 Prices (In Million Pesos) Source: National Statistical Coordination Board

16. GROSS VALUE ADDED IN PRIVATE SERVICESGrowth Rates (In %)At Constant 1985 Prices Source: National Statistical Coordination Board

17. Services Sector Issues and Concerns While apparently the Phil. service sector has been experiencing a robust growth in recent years, its intrinsic structure prevents it from being the major source of high and sustained economic growth areas.

18. Services Sector Issues and Concerns If the Philippines want to make service industry to be an engine of economic growth in the country, this would entail conscious shifts in the ff: • Education policy • Infrastructure Projects • Trade and Industrial Policy • Budget Allocation

19. C. Philippine Services Coalition (PSC) PSC is a partnership of concerned stakeholders from the government, private and academe. It aims to develop and enhance Philippine trade in services as the fastest growing component of economic growth and international trade by: • Increasing awareness among public and private sectors on the WTO Agreement on Trade in Service (GATS); • Facilitating consultations, networking, and alliance – building among stakeholders; • Establishing a framework to synergize and synchronize country-team strategies for tapping foreign markets and positioning Philippine services exports for global competitiveness; and • Helping build individual and institutional capabilities to enhance and strengthen the involvement of stakeholders in both services export promotion and services trade negotiations.

20. Philippine Services Coalition (PSC) PSC is committed to work with the Public-Private Sector Task Force on the Development of Globally Competitive Philippine Services Industries which was created through Executive Order 372 in developing and promoting the country’s globally competitive service industries MEMBERSHIP OF THE COALITION GOVERNMENT: Department of Foreign Affairs, Department of Trade and Industry National Economic Development Authority BUSINESS Sector: Philippine Chamber of Commerce and Industry Philippine Exporters Confederation, Inc PHILIPPINE RESEARCH INSTITUTES: Foreign Service Institute De La Salle University Asian Institute of Management Policy Centre Philippine Institute for Development Studies

21. Activities of the Coalition • In – depth Profiles of Philippine Service Sectors- • includes an analysis of domestic and export market regulatory issues and concerns which either restrict or facilitate trade as well as export market opportunities and or threats • Integrative Studies for the Education and Trade Policy Issues • draw up studies organized along subjects that cut across sectors ie, trade negotiations, trade policy and human resources ; to provide basis for the formulation of the framework for Phil international negotiations under GATS in the WTO; to provide inputs to govt and private sector plans on formal, informal and continuing lifelong education • Study on assistance rendered by SME Development Organization • a meaningful assessment on the role of the various SME Development Organizations in advancing competitiveness of the service exporters. It will include recommendations to strengthen org. thrusts & objectives responsive to the needs of the sector

22. Activities of the Coalition • A Roadmap for Export Competitiveness of Services • based on results of profiles, capacity building workshops will be conducted tailored to the needs and interest of the sector; serve as avenues for the stakeholders to forge alliances and network to develop and promote the performing service sectors; enhance the understanding of the multilateral services trade regime, particularly the elements and nature of negotiations under GATS • Case Studies • will present individual exporting firms as models which other may be able to emulate , their strengths and weaknesses, best practices and specific areas of competence and competitiveness

23. Roadmap 2010 – comprehensive industry plan drafted by the Business Processing Association of the Phil. • The local off shoring and outsourcing (O&O) industry needs to augment its workforce with 600,000 new workers by 2010 to reach its 1 M mark number of workers • Three Themes • identified aggressive talent development as the most important factor for growth; the plan to meet workforce requirements • to establish a first rate business environment- the key action steps for insuring the right level of government and private sector support to the industry • to promote the next wave cities -which defines the formula for developing new O&O locations beyond the national capital region, new hubs such as Baguio, Cebu, Davao , Bacolod, Iloilo etc.,

24. Targets (next three years)and Status • TARGETS • The industry’s target growth 40% annually • Translate into $13B in revenues • 10% share of the global O&O market status • STATUS • It has gained headway in building a sustainable supply of industry- ready talents • It has signed a MOA with TESDA(Technical Educ. & Skills Development Authority) for the distribution of P350M worth of scholarship grants. • Since inception, it has benefited 44,331 call centre agents, 6,346 medical transcriptionists, 389 software developers, 254 animators --

25. Thank You!