Highlights of the National Competitiveness Summit

1. Highlights of the National Competitiveness Summit Senior Undersecretary Thomas G. Aquino Department of Trade and Industry Co-Chair, Core Group of the National Competitiveness Summit 06 October 2006

2. Gains • On Competitive Human Resources • Convergence of government and business organizations’ efforts towards education reform • Private Sector Commitments • MOU among government training centers and business organizations to expand the Manggagawang Pinoy • Implementation of the Philippine Services Roadmap • Deployment of business advisors to the state universities and colleges

3. Gains • On Efficient Public and Private Sector Management • Development of ISO-aligned standards for all government agencies underway for eventual adoption • Unification of various productivity programs of government agencies and private sector organizations • Private Sector Commitments • Wider propagation of ECOP’s Big Enterprise-Small Enterprise program • Institutionalization of the Bayanihan for Productivity through the creation of a National Registry of management volunteers from both local and overseas Filipinos

4. Gains • On Effective Access to Financing • Bangko Sentral ng Pilipinas agreed to relax two banking rules: • Waived submission of ITR requirements for micro and small enterprises for the first two years • Promotion of the market for wholesale lending to encourage banks to engage in microfinance (204 banks today with total loan portfolio of P3.6 billion vs. only 45 in 2000) • Private Sector Commitments • Agreement among academic institutions, training centers, business organizations to focus on instituting financial management discipline and strengthen SME centers nationwide

5. Gains On Improving Transaction Flows and Costs DOE established the Energy Investment Promotion Office DENRshortened processing time for permits; established One-stop Shop Committees for Area Status Clearances for Mining Applications. BFAD reduced processing time for license to operate from 3 days to 1; Food Export/ Commodity Clearance Fee was removed and processing time reduced from 3 days to 1; Giant billboard was put up to detail the procedures for getting licenses BAIeliminated its processing fees FIDA eliminated fees, streamlined its procedures and abolished commodity clearance. DILG established One-stop shops in 46%, customer complaint desks in 51% and simplified the Civil Application System in 65% -- of 1,400 municipalities. Moncada, Gerona and Sta. Ignacia, Tarlac, together with theAteneo Center for Continuing Education, piloted the automated system for business processes. Currently working on the automation of Bambang, Nueva Vizcaya. DOT streamlined procedures for endorsement of tourism projects to BOI, PEZA and LTFRB; shortened processing and evaluation of applications of tourism establishments from 5 to 3 working days. DTIshortened processing time for business name and BOI registration; eliminated requirement of permits from 5 agencies. BOI waived processing fee and adopted one-day processing for cement and copper export clearances. PEZA, together with BOC, automated the system of Import Permit Issuance and Export Documentation; together with DENR, reduced the processing time for the issuance of ECC from 60 days to 20 days PCAB post verification for renewal of contractors’ licenses reduced to 15 days from 60-90 days.

6. Gains On Improving Transaction Flows and Costs • Private Sector Commitment • MOU among DILG, LGU Leagues and Business organizations to conduct a strong nationwide campaign to localize best practices

7. Gains • On Seamless Infrastructure Network • Agreement between government and the private sector on the 20 priority infrastructure projects vital to competitiveness • Private Sector Commitments • PCCI-led monitoring of the timely implementation of the priority infrastructure projects

8. Gains • On Energy Cost-Competitiveness and Self-Sufficiency • Agreement among DOE, NPC, ERC, business organizations and private distributors on the guidelines to implement the Customer Choice Program-Time of Use and the Enhanced One-Day Power Sales program • Better understanding of energy supply situation • Private Sector Commitments • MOA among business organizations through the PCCI to wage an energy conservation campaign

9. Challenges Ahead • On Competitive Human Resources • Mindset change in various human resources groups • Decisive push to increase investments in educational reform • On Effective Public and Private Sector Management • Competitiveness mindset change starting with the adoption of ISO-aligned standards • Cascading of these ISO standards to the LGUs • Create an environment for intellectual property rights protection to encourage a culture of innovation

10. Challenges Ahead • On Efficient Access to Financing • Achieve a quantum leap in the availability of funds for MSMEs through “out-of-the-box” approaches • On Improved Transaction Flows and Costs • Priority business processes that have to be improved • BIR: VAT refunds and redemption of Tax Credit Certificates • BI: issuance of Alien Certificate of Registration • BOC: full computerization • DFA: machine-readable travel and entry documents

11. Challenges Ahead • On Seamless Infrastructure Network • Consistent implementation of the policy on aviation liberalization • Clear policy direction on competition in major ports of the country • Forceful execution of major priority projects • On Energy Cost-Competitiveness and Self-Sufficiency • Participation of small industrial users through aggregation • Resort to executive actions that may cause immediate reduction of power costs • Active promotion of alternative fuels development • Clear investment policy direction for new power plants

12. Measuring our EffortsMaking the jump from bottom third Starting A Business Paying Taxes Source: World Bank, Doing Business 2007

13. Measuring our Efforts (Starting a Business)Making the jump from bottom third This elevates us to the same ranking as Germany and Japan Source: World Bank, Doing Business 2007

14. Moving Forward • Establishment of a competitiveness body • Working groups on the identified six sources of competitiveness • Secretariat • Implementation of the Action Agenda • New focus areas • Foreign Direct Investments • Promotion of globally-competitive industries • ICT-Enabled Services • Medical Tourism

15. Thank You