Good Governance Is Good Economics

The Republic of the Philippines
Good Governance is Good Economics
September 2012
Agenda
Executive Summary The Social Contract with the Filipino People Economic and Fiscal Updates Economic and Fiscal Outlook Key Investment Areas Profiles of Speakers Directory of Economic Agencies Investor Relations Office Brochure
3 4 8 21 39 58 72 73
The Philippines: Pushing Forward on All Fronts
Sustained growth momentum driven by strong domestic consumer base and increasing investments Prudent fiscal management focused on fiscal consolidation and medium-term debt sustainability Strong external payments position supported by large foreign exchange reserves, robust overseas Filipino remittances and a net external creditor balance Effective monetary policy ensured price stability through its proactive stance and independent approach to policy implementation Sound banking system which is resilient to external shocks due to low NPLs, strong prudential ratios and stable domestic funding sources Reform-minded Administration with a growing track record of good governance, prudent fiscal and budgetary management and sustained popular support from the Filipino people Growing third-party recognition with several credit rating upgrades over the past two years, enhanced investor confidence, and improvements in governance and competitiveness rankings
The Presidents Social Contract with the Filipino People

Five key result areas
The delivery of social and economic services will not be effective without good governance Poverty reduction initiatives should also be coupled with efforts to generate employment through economic growth A conducive context of peace and rule of law, and of environmental integrity is needed to support good governance, poverty reduction and growth *There is no poverty If there is no corruption
Source: Philippine Development Plan 2011-2016, Proposed 2013 Budget in Brief, Department of Budget and Management 4

Philippine Development Plan 2011-2016: In pursuit of inclusive economic growth
Medium-Term Targets 7.0-8.0% average GDP growth per year 22.0% investment-to-GDP by 2016 1 million employment generation per year 6.8% unemployment rate by 2016 16.6% poverty incidence by 2015 2.0% deficit-to-GDP by 2013 Upper 30% in global governance and competitiveness rankings by 2016 Investment grade sovereign credit ratings before 2016
Critical Interventions to Achieve Inclusive Growth
5 Source: Philippine Development Plan 2011-2016 Results Matrices; 2013 Proposed Budget in Brief
Structural and Other Developmental Reforms and Programs

Accelerating reforms to achieve inclusive growth
2005: Passage of Expanded Value-Added Tax Law (EVAT)
1995: Liberalization of telecommunications industry
2001: Liberalization of the power sector (EPIRA)
2005: Passage of Securitization Act
1993: Creation of the Bangko Sentral ng Pilipinas
1998: Deregulation of the oil industry
2003: Passage of Special Purpose Vehicle Act
2007: Implementation of riskbased bank supervision
2009: Passage of Tourism Act
1993
1998
2003
2008
1997: Privatization of water services
2002: Adoption of inflation targeting framework
2004: Passage of Government Procurement Reform Act
2008: Passage of Renewable Energy Act
1994: Liberalization of foreign bank entity
2000: Passage of General Banking Law and Phil. E-Commerce Act
2004: Adoption of Basel 2
2006: Establishment of the Wholesale Electricity Spot Market (WESM)
Structural and Other Developmental Reforms and Programs

Accelerating reforms to achieve inclusive growth
2010: Applied Zero Based Budgeting Approach in preparing the 2011 Budget
2011: Passage of the Government-Ownedand-Controlled Corporations (GOCCs) Governance Act of 2011
2012 and beyond Full implementation of the Government Integrated Financial Management Information Systems (GIFMIS) in 2013
2010: Implementation by the Bureau of Customs (BOC) of Electronic to Mobile System; Enhancement of the agencys post-entry audit capability
2012: Issued EO 79 Institutionalizing and Implementing Reforms in the Philippine Mining Sector Providing Policies and Guidelines to Ensure Environmental Protection and Responsible Mining in the Utilization of Mineral Resources 2011: Enhanced Business Name Registration System
2010: Launched PPP Program
2012 and beyond: Sin Tax Bill and Rationalization of Fiscal Incentives Bill
2010
2011
2012
2010: Reinvigorated implementation of programs against corrupt officials, tax evaders and smugglers
2011: Issued guidelines on the adoption of Philippine Financial Report Standards (PFRS) 9: Adopted phasedimmigration to Basel III
2012: Program Budgeting Approach
2010: Simplified and shortened business practices through web-based applications at the BIR
2012: Nationwide Launch of Philippine Business Registry Facility 2011: Issued EO 29 on Open Skies Policy 2012: Passage of Amendments to the Anti-Money Laundering Act of 2001
2010: Set up the Debt Management Office at the Department of Finance
2011: BOC National Single Window
2012: Launched Food Staples Sufficiency Program 7
The Philippines: Pushing Forward on All Fronts
2011
2012 6.1% (S1) 3.2% (Jan-Aug) US$80.8bn (end-Aug) PhP73.7bn (Jan-Jul) 2.7% (end-Jun) 5,322.5 pts (Sep 14)
Sustained Economic Growth Effective Monetary Policy Strong External Position
GDP Inflation GIR
3.9% 4.6% US$75.3bn PhP197.8bn (2.0% of GDP) 2.9%
Prudent Fiscal Management Sound Banking System
Fiscal Deficit Nonperforming Loans1 PSEI
Positive Investor Sentiment Growing Third-Party Recognition

Source: Bangko Sentral ng Pilipinas, Department of Budget and Management 1 Banking system NPL a. 2 rating upgrades, 2 positive outlook from the three major credit rating agencies b. 1 rating upgrade; 1 positive outlook from the three major credit rating agencies
4,371.96 pts
Positive Credit Rating Actions
4a
2b (end-July)
Philippines Sustains Robust GDP Growth

Strong economic momentum continues despite external challenges
The Philippines Economic Performance Continues to Beat Market Expectations Q2 ITEM 2011 2012 Growth Rate (%) GNI Net Primary Income GDP By Industrial Origin Agri, Fishery, Forestry and Hunting 2.4 -1.1 3.6 5.6 4.5 5.9 5.4 3.1 6.1 Indonesia 8.3 0.7 0.8 10.9 Philippines -1.4 5.6 5.6 4.6 7.6 5.7 4.9 7.8 5.4 32 57.1 68.8 6.3 5.9 6.1 6.3 6.4 6.4 S1 2012 Share to GDP (%) China Country Q1 Q2 S1 2012 GDP Growth (%)
8.1
7.6
7.9
Industry Services By Expenditure Household Final Consump. Exp Govt Final Consump. Exp Capital Formation Exports Imports
Malaysia
4.9
5.4
5.2
Vietnam
4.0
4.4
4.2
South Korea 6 -10.1 0.2 -1 5.9 2.3 8.3 4.4 12.3 -13.2 9.5 0.6 11.3 16.8 52.4 -48.2 Thailand
2.8
2.4
2.6
0.4
4.2
2.3
Singapore
1.5
2.0
1.8
9
Source: National Statistical Coordination Board
Philippines Sustains Robust GDP Growth

Long-term investment and structural reforms provide foundation for higher and more stable growth
A Decade of Robust and Sustained Economic Growth is Set to Continue

GDP Growth (%)
Average: 4.7%
Unemployment Rate (%)
8% 7% 6% 5.0 5% 4% 3% 2% 1.1 1% 0% 2.9 3.6 5.2 4.8 4.2 6.7 6.6
7.6 7.0 6.1 6.0
13.0%
12.0% 11.1 11.0% 10.0% 3.9 9.0% 8.0% 7.0% 6.0% 1H12 2012P 2013P 8.0 7.5 7.3 7.4 7.3 7.0 7.2 6.9 11.8 11.4 11.4 11.3
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
5.0%
1Q12
Source: National Statistical Coordination Board
Source: Bangko Sentral ng Pilipinas Selected Economic and Financial Indicators Note: Data are averages for January, April, July and October rounds of Labor Force Survey (LFS). Beginning April 2005, unemployment is based on the new definition. Please note that in 2005, old concept was reflected to capture the full year data since the new concept only 10 covered Q2-Q4 data.
2Q12
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Fiscal Consolidation on Track

Getting on a sustainable fiscal path with improving fiscal metrics
Aquino Administration Assumed Office in end-June 2010
1,558 1,360 4%
Firm administrative measures (i.e. RATE, RATS, RIPS) have resulted in higher tax revenues and lower deficits Tax revenue elasticity of BIR collections increased to 1.5 in 2011 from 0.8 in 2004, indicating effective tax administrative measures Jan- July 2012 Deficit of PhP73.73bn is 26.4% of P279.1bn 2012 program Revenues up 12.1% yoy Expenditures up15.1% yoy
1,800 1,600 1,400 3.7% 1,200
5%
1,522 1,208 3.7%
Php bn
1,000 3.5% 800
958 884
3%
2% 600 400 200 0.2% 0 2004 2005 2006 2007 2008 2009 2010 2011 Jan - Jul 2012 0% 2.6% 2.0% 1.0% 0.9% 1% 0.7%*
Revenues (LHS)
Expenditures (LHS)
Deficit/GDP (RHS)
* Jan-Jun 2012
11 11
Source: Bureau of the Treasury
Proactive Liability Management

Debt ratios continue to decline
Philippine Fiscal Consolidation is a Reality General government (GG) debt/GDP has declined to 42% in 2011 from a high of 68% in 2003 GG debt/GDP in 2011 is 9 percentage points lower than national government debt/GDP Proactive liability management has enhanced the financeability of government debt by extending maturities, lowering servicing cost and shifting the debt denomination towards local currency
12 Source: Department of Finance
12

Domestic/foreign borrowing mix effectively managed
Prudent Strategies to Finance the Annual Funding Requirement Minimize Foreign Exchange Risk and Increase Funding Self-Sufficiency
National Government Gross Financing
5.9% 54.7% 65.8% 64.5% 56.6% 73.4% 56.2% 85.8% 43.8% 14.2% 2008
Global-Peso Notes
9.8% 65.2% 79.5%
65.6%
45.3% 2003
34.2% 2004
35.5% 2005
43.4% 2006
Foreign
26.6% 2007
Domestic
28.5% 2010
25.0% 2011
20.5% Jan-Jul 2012
2009
The External Debt Component within the Overall Debt Mix has Been Gradually Declining Over the Years
Foreign
Source: Bureau of the Treasury, Department of Finance
Domestic
13

Improving debt sustainability
The National Government Debt Portfolio Has Grown Longer Dated Over Time
Domestic Debt
Reduced rollover risk and increased debt carrying capacity over the past ten years New issue yields decreasing and foreign currencydenominated bonds are receiving a substantial bid from onshore investors
100% 80% 60% 40% 20% 0% 2003

Short-term-1 year or less
27 44 29
29 54 41 26 30
2005
70
76
19
2010
20 10
2011
16 8
Jun-12
Long-term-Beyond 10 years
Medium-term-Beyond 1 year but less than 10 years
External Debt
14
Source: Bureau of the Treasury, Department of Finance
14
Sound and Stable Inflation Environment Promotes Inclusive Growth

Refinements in the inflation targeting mechanism has allowed BSP to meet its inflation target consecutively for three years
Jan Aug 2012 headline inflation averaged 3.2%, well within the 3% - 5% target range for the year Price stability promotes inclusive growth oIncreases certainty in decision-making oPromotes confidence in financial instruments as a form of savings oPreserves purchasing power o Promotes efficient allocation of resources oHas positive effects on income redistribution
14% 12% 10% 8% 6% 4% 2% 0%
The Republic has Achieved the Right Policy Balance between Containing Inflation and Supporting Economic Growth
Inflation Rate (%)
Global inflationary cycle
Upper Bound 5% Aug 2012: 3.8% Lower Bound 3%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Headline
Lower Bound of Target
Upper Bound of Target
2012
15
Source: Bangko Sentral ng Pilipinas
A Robust External Profile

A strong balance of payments promotes a stable currency environment and facilitates a healthy buildup of FX reserves
The Philippines Enjoys a Structurally Positive BOP Balance of Payments (USD bn)
30
Remittances Soar to a Record of USD20.1bn in 2011 Overseas Filipinos Remittances (USD bn and % Growth)
25 19.4 25 20 13.7
18 16 14 12 10
USD bn
14.3
15 10
10.2
12.8
13.2
5 0
8.6
10.7
12.8
14.5
16.4
17.3 5.6
18.8 8.2
20.1 7.2 9.6 6.3 Jun10.1 5.1 Jun12
8 6 4 2 0
-0.3 3.8 2.4
8.6 6.4
2004 2005 2006 2007 2008 2009 2010 2011

OF Remittances
Growth Rate (lhs)11
BPO revenues continue to grow rapidly

3.5
14.0 12.0 10.0 8.0
BPO Revenues (USD bn)

1.2
0.1
-2 -4 2004 2005 2006 2007 2008 2009 2010 2011 1Q11 1Q12
Capital and Financial Account Current Account Balance of Payments
6.0 4.0 2.0 0.0 1.5 2004 2.4 2005 3.3 2006 4.9 6.1 7.1 8.9
11.0
2007
2008
2009
2010
2011
16
A Robust External Profile

The Philippines is a net external creditor and its positive position continues to expand rapidly
The build-up of FX reserves buffers the economy from external shocks o End-Aug 2012 GIR reached USD80.8 bn which can cover 11.9 months worth of imports Resilient remittance growth sustains current account surpluses. ROP is a net creditor to the IMF on account of strong external position Contributed USD266 mn to the Financial Transaction Plan through a currency exchange arrangement as of Dec 2011 The ROP is the only sub-investment grade Emerging Market to participate as a creditor in the New Arrangements to Borrow, potentially making about USD520 mn available Lent USD1.0 bn to the IMF in Q2 2012 to augment funds being lent to countries experiencing financial difficulties
80.0
FX Reserves have Surged while External Debt Remained Stable FX Reserves and External Debt (USD bn)
75.3 76.1
70.0
62.4 60.0
60.0
61.7
62.9
57.6 51.4 52.0 53.8 55.0 54.4 53.9
55.5
54.3
54.9
50.0
44.2
40.0
37.6 33.8
30.0
23.0
20.0
15.1
10.0
15.7
16.4
17.1
16.2
18.5
0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Mar-12
FX Reserves
External Debt
17
Sound Banking System Efficiently Channels Funds to Productive Uses

The banking system is in good health evidenced by low NPLs and strong prudential ratios
The improved asset quality has minimized the risk of a potential banking-system led crisis The resilience demonstrated by the Philippine banking system is highlighted by the decrease in system-wide Non-Performing Loans (NPL) and Non-Performing Assets (NPA) levels even at the heart of the global financial crisis NPL coverage ratios have strengthened as insurance against potential future asset deterioration, and underpin the conservative nature of the banking system Banks are adequately capitalized and wellpositioned to meet higher capital standards under the Basel III
110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
NPL Level Continued to Improve Even Through the Global Financial Crisis
Banking System Total Loan Portfolio and NPL Ratio
Ratio In Percent
81 .6% 71 .9% 50.2% 52.2% 58.0% 74.4% 87.1 % 93.4% 97.8% 1 04.0% 1 0.2% 1
14.6
15.2
13.4
10.8
7.8
5.0
4.1
3.7
3.6
2.8
2.7
4500 4000 3500 3000 2500 2000 1500 1000 500 0
Levels in PHP bn
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jun'12 TLP, gross (RHS) NPL Ratio (LHS) NPL Coverage Ratio (LHS)
Strong Capitalization Above International Standards

22 20 Ratio in Percent 18 16 14 12 10 8
Banking System Capital Adequacy Ratio

17.6% 16.7% 14.4%
BSP Regulatory Requirement of 10% International Standard of 8%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
CAR, Solo CAR, Consolidated Tier 1
18
Strong Macroeconomic Fundamentals Boost Investor Confidence

CDS spreads and record high PSE performance reflect positive investor sentiment for the Philippines
Philippines CDS Levels are Tighter than Some Higher Rated Peers
450 bps 400 bps 350 bps Spread (bps) 300 bps 250 bps 200 bps 150 bps 100 bps 50 bps Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12
Country Brazil Peru India Indonesia Philippines Turkey Ratings (Moodys/S&P/Fitch) Baa2/BBB/BBB Baa3/BBB/BBB Baa3/BBB-/BBBBaa3/BB+/BBBBa2/BB+/BB+ Ba2/BB/BB+ CDS level as of 13 Sep 2012 109.6 102.8 369.1 166.7 129.9 154.9
Philippine Stock Exchange Index Sustains its Bullish Trend

6000 5000 4000 3000 2000 1000 0 12/30/07 12/30/08 12/30/09 12/30/10 12/30/11 6/30/07 9/30/07 3/30/08 6/30/08 9/30/08 3/30/09 6/30/09 9/30/09 3/30/10 6/30/10 9/30/10 3/30/11 6/30/11 9/30/11 3/30/12 6/30/12
5,322.47 pts 14 Sep 2012
Philippine Stock Exchange Index
Source: Bloomberg Note: Bank of India used as a proxy for the Indian sovereign.
19
Focus on Good Governance Yielding Results

The Philippines shows improvements on several governance and competitiveness indicators
2009/2010 Heritage Foundation Index of Economic Freedom Transparency International Corruption Perceptions Index World Bank Government Effectiveness Indicator World Economic Forum (WEF) Enabling Trade Index WEF Financial Development Index WEF Competitiveness Rankings Overall Institutions Macro environment Higher Education and Training Goods and Market Efficiency Technological Readiness Financial Market Development Business Sophistication Innovation Environmental Performance Index4 85 125 68 73 97 95 75 60 111 50 75 117 54 71 88 83 71 57 108 42 65 94 36 64 86 79 58 49 94 n/a 10 places 23 places 18 places 7 places 2 places 4 places 13 places 8 places 14 places 8 places 115 139 51 92 50 2010/2011 107 134 52 72 44 2012/2013 n/a 129 n/a n/a n/a Change* 8 places 5 places
1 percentile
20 places 6 places
* 2012/2013 vs. 2010/2011 for indicators with 2012/2013 report data. Source: World Bank, Transparency International and World Economic Forum World Bank Governance Indicators and Transparency International values are for the year 2010 / World Economic Forum Rankings values are from the 2011/2012 report data. Heritage Foundation 2011 ranking. Heritage Foundation 2012 ranking. 4 Environmental Performance Index by Yale & Colombia Universities in collaboration w/ WEF and EC. 2012 report data.
20
Macro Indicators: Moving From Strength to Strength

Robust economic outlook
Actual 2008 2009 2010 2011 2012
Projections 2012 2013
Real GDP Growth (%) Headline Inflation (%)1 Exports Growth (%)2 Imports Growth (%)2 OF Remittances3 Amount (USD bn) Growth Rate Current Account (USD bn) Balance of Payments (USD bn) GIR (USD bn)
4.2 8.3 (2.5) 5.6
1.1 4.1 (22.1) (24.0)
7.6 3.9 34.0 27.5
3.9 4.6 (6.9) 9.5
6.1 (1H) 3.2 (Jan-Aug) 7.7 (Jan-Jun) 0.4 (Jan-Jun)
5.0-6.01 3.0-5.01 10.01 12.01
6.0-7.01 3.0-5.01 12.01 14.01
16.4 13.7 3.6
17.3 5.6 9.4
18.8 8.2 8.9
20.1 7.2 7.1
10.1 (Jan-Jun) 5.1 (Jan-Jun) 0.9 (Jan-Mar)
21.14 5.04 4.64
22.24 5.04 3.14
0.1 37.6
6.4 44.2
14.3 62.4
10.2 75.3
4.5 (Jan-Jul) 80.8 (Aug)
2.64 77.0-78.04
2.74 80.74
Source: Bangko Sentral ng Pilipinas, National Statistics Office 1 Budget Expenditures and Sources of Financing 2013 2 Based on NSO data 3 Cash remittances under the BOP6 definition. 4 Based on BSP projections as approved by the Monetary Board on 15 June 2012.
21
Economy supported by broad-based growth drivers

Robust economic outlook
Growth Drivers - Production

Infrastructure development Tourism Food sector Retail trade Business process outsourcing Electronics manufacturing Communications network modernization
Growth Drivers - Expenditure

Better labor and employment prospects Intensified public sector spending on infrastructure Strong remittance inflows Exports of non-electronics, electronics and services Investments and durable equipment
Source: National Economic and Development Authority
22
Demographic Profile will Continue to Support Growth

The Philippines is the last major economy in Asia to enter its demographic sweet spot
The Youngest Population in Asia Supports a Strong Medium-term Economic Growth Outlook
The median age in the Philippines is only 22.2 years, well below other young countries in Asia, such as Malaysia (25), India (25.1), Indonesia (27.8) and Vietnam (28.2) According to United Nations population projections, in 2015 the Philippines will enter its Demographic Window, when the proportion of the population that is of working age is particularly prominent The Philippines is the last major Asian economy to benefit from this demographic dividend, which is typically associated with accelerated economic growth Extended periods of high GDP growth in Asias fastest-growing economies have coincided with countries entering their Demographic Windows* On average, growth over the 10-year period following the beginning of the Demographic Window has been 7.3%
Demographic Windows* in Asia

Japan Hong Kong Singapore Korea China Thailand Indonesia Vietnam Malaysia India Philippines 1960 1980 1965 1980 1980 1985 1990 1995 2005 2005 2010 2010 2015 2000 2020 2040 1995 2015 2015 2020 2025 2030 2040 2040 2045 2050 2050 2060
Average GDP Growth, First 10 Years of Demographic Window (%)

12 10 8 6 4 2 0 Hong Kong Thailand** Singapore Indonesia Korea Japan Malaysia China Vietnam India 10.3 9.0 8.2 8.1 7.8 7.4
7.0
6.2
5.4 3.3
*Defined as the period when population under 15 years old drops below 30% and population over 65 years old is less than 15%.
**Thailand is an exception, as its Demographic Window began in 1995, and thus its highgrowth period was interrupted by the Asia Financial Crisis of 1997-98
Sources: UN World Population to 2300, UN World Population Prospects (2010 Revision), IMF World Economic Outlook, Japan Cabinet Office
Demographic Profile will Continue to Support Growth

The Philippines is the last major economy in Asia to enter its demographic sweet spot
Share of Population, Ages 15 to 64 2012 2030
Projected Median Age, 2030
70%
Cambodia Myanmar China Malaysia Philippines Indonesia South Korea
65%
60% Japan 55% 2012 2030
Source: Bloomberg Business week, United Nations
24
Challenges to Pursuit of Inclusive Growth

The Philippines is well-placed to weather external headwinds
Challenging Global Environment in 2012

Slower growth of global output or income and consumption Debt crisis and deleveraging in Europe Uncertain labor market and fiscal cliff in the US Slowdown in major emerging Asian economies e.g., China , India Weak growth of industrial production Inventory drawdown Rise in trade protectionism Reinforcing
Bright Spots
Faster growth in emerging markets than in advanced economies Sustained growth in ASEAN-5 and Middle East Sufficient fiscal space Stable commodity prices Slower external demand growth
Indicators
Improving governance & competitiveness indicators Credit rating upgrades Historically-high stock market indices Upbeat private sector
25 Sources: National Economic and Development Authority , Bangko Sentral ng Pilipinas, IMF WEO, World Bank, UN,
Funding the Social Contract

Governance reforms are at the core of economic policy making and budget allocation
Instituting a Results-driven Budget in 2013 to Minimize Waste and Genuinely Address Poverty and Inequality
Proposed 2013 budget PhP2.006 tr; 10.5% higher than the PhP1.816 tr 2012 budget Equivalent to 16.8% of GDP Greater stakeholder participation in budget preparation and execution for stronger transparency Well defined key component programs per Key Result Area, intended outputs and outcomes Adopts key strategies to accelerate the delivery of results, e. g., assigning DPWH as the principal infrastructure agency
ZeroBased Budgeting Approach
2.7%
6.1%
2.1%
9.0%
15.4 %
Program Budgeting Approach
Growth Rate
26
Source: 2013 Proposed Budget in Brief, Department of Budget and Management Note: Actual figures apply for 2009 2011; GAA figures for 2012 and proposed National Expenditures Program figures for 2013
26

Advancing the national development agenda through the budget
Results-Focused Budget of 2012, by Sector
Proposed Empowerment Budget of 2013, by Sector
Social Services sector receives bulk of the budget allocation at 31.3% of the total budget Administration accelerates infrastructure development with capital outlays allocation up by 24.3% over 2011 Specific allocation to infrastructure expenditure up 40.6% over 2011
Bulk of the proposed 2013 budget once again devoted to Social Services in line with focused campaign on poverty alleviation Capital outlays up 15.7% to PhP380 bn to boost momentum in the transport, tourism and agriculture sectors Debt service allocation continues to decline
27 27
Source: Department of Budget and Management Note: Other current operating expenditures include allotment to LGUs, subsidies and interest payments

Advancing the national development agenda through the budget The 2013 Proposed Budget by Expense Class Allocation for infrastructure and other capital proposed to increase by 17.5% in support of governments focus on making long term investments in infrastructure The 2013 proposed budget will support the full year implementation of the Salary Standardization Law III and the hiring of teachers, nurses, airport and security personnel, policemen and other needed public servants Share of Local Government Units to increase due to improved revenue collections in 2010, the base year for the 2013 Internal Revenue Allotment computation
Particulars Current Operating Expenditures Personal Services MOOE Subsidy to GOCCs Allotment to LGUs Interest Payments Tax Expenditure Fund Capital Outlays Infra and Other CO Equity to GOCCs Capital Transfers to LGUs CARP LO Compensation Net Lending TOTAL
Source:: Budget of Expenditures and Sources of Financing 2013
Levels (PhP Bn) 2012 1,464.7 593.5 266.6 19.7 218.6 333.1 33.0 328.3 252.4 2.1 71.3 2.5 23.0 1,816.0 2013 1,599.5 641.3 313.3 42.3 241.8 333.9 26.9 380.0 296.7 2.0 76.3 5.0 26.5 2,006.0
Share (%) 2012 80.7 32.7 14.7 1.1 12.0 18.3 1.8 18.1 13.9 0.1 3.9 0.1 1.3 100.0 2013 79.7 32.0 15.6 2.1 12.1 16.6 1.3 18.9 14.8 0.1 3.8 0.2 1.3 100.0
Growth (%) 9.2 8.0 17.5 114.3 10.6 0.2 (18.6) 15.7 17.5 (2.7) 6.9 100.0 15.2 10.5
28

The 2013 Proposed Budget , Top 10 Departments

2012 Program 2013 Program Level (PhP Bn) 292.7 152.9 121.6 121.1 74.1 56.8 56.2 Rank 1 2 3 4 5 6 7 Notes 1,2 3,4,5 1,6 1,6 4,5 1,4.5
Strong commitment to Increase allocation for priority sectors to meet the Millennium Development Goals targets and bring the spending levels for infrastructure, education and health to more respectable levels Transform higher education system and technical vocational education programs to ensure a competent, welltrained and globally competitive labor force
Department Education Public Works and Highways National Defense Interior Local Government Agriculture Health Social Work and Development Transportation and Communications
Level (PhP Bn ) 238.8 126.4 108.1 99.8 61.4 45.8 48.8
Rank 1 2 3 4 5 7 6
34.7 23.6 17.5
8 9 10
37.1 33.2 23.7
8 9 10
1,4,5,6 1,4 1,6
Notes: 1/ Includes allocations from the Miscellaneous Personnel Benefits Fund 2/ Gross of School Building Program transferred to DPWH 3/ Net of School Building Program transferred from DepEd 4/ Includes allocations from Budgetary Support to Government Corps 5/ Includes allocations from Priority Social and Economic Projects Funds 6/ Includes allocations from the Pension and Gratuity Fund
Source:: Budget of Expenditures and Sources of Financing 2013
Finance Environment and Natural Resources
29

Allocation by Region (PhP Bn) Particulars 2012 770.5 42.4 71.1 42.5 24.9 36.6 64.9 107.8 51.7 60.8 51.6 46.7 33.5 41.1 35.2 35.2 29.2 37.7 1,045.5 491.6 553.9 1,816.0 2013 990.3 49.4 129.4 49.7 31.7 44.8 88.9 130.2 63.2 74.4 63.0 56.5 42.1 48.1 46.3 43.5 34.7 43.8 1,015.6 524.2 491.4 2,006.0 82.0 16.9 27.3 22.4 37.0 20.8 22.2 22.4 22.1 21.0 25.7 17.0 31.5 23.6 18.8 16.2 (2.9) 6.6 (11.3) 10.5
30 Source:: Budget of Expenditures and Sources of Financing 2013
Growth 28.5
The regional budgetary allocations Up 28.5 % to PhP990.3 bn in 2013 Constitutes 49.4% of the proposed 2013 budget Allocations for Visayas and Mindanao grew by 21.8 % and 22.1% respectively
Regionalized Budget % of Total NCR RO I CAR RO II RO III RO IV RO V RO VI RO VII RO VIII RO IX RO X RO XI RO XII RO CARAGA ARMM Non-regionalized Nationwide Central Office TOTAL

Strategic programs in support of the five key result areas
Key Result Area Anti-Corruption and Transparent, Accountable and Participatory Governance
Amount PhP 238 mn
Program Digitization of financial processes, e.g. National Payroll System, Cash and Treasury Management System, Government Integrated Financial Management Information System Implementation of an integrated tax compliance and enforcement program and enhancement of revenue collections
PhP 6.5 bn
Poverty Reduction and Empowerment of the Poor and Vulnerable
PhP 44.3 bn
Pantawid Pamilyang Pilipino Program (4Ps) to benefit 3.8mn poor households
PhP 26.3bn
Basic Educational Facilities and School Building Program to construct and rehabilitate 30,789 classrooms Annual premium subsidy of 5.2mn indigent families
PhP 12.6bn Special housing programs for the resettlement of 20,000 informal settler families living in danger zones in Metro Manila
PhP 10.1bn
31 Source: The Presidents Budget Message Fiscal Year 2013

Strategic programs of five key result areas
Key Result Area
Amount
Program
Rapid, Inclusive and Sustained Economic Growth
PhP 106.5bn
Preservation of existing road network, preventive maintenance of 1,611km road, rehabilitation of 1,018km road, cementing of 1,175km road, reconstruction and upgrade of temporary bridges to permanent structures Allocation for LRT Line 2 East Extension project (Santolan to Masinag), P3.3bn for LRT Line 1 South Extension (Baclaran to Cavite) to improve public transport system and decongest roads Construction, improvement and rehabilitation of access roads to 164 strategic tourism destinations Construction, rehabilitation of 15 airports and 9 ports and wharves Agricultural banner programs to help farmers produce 20mn metric tons (MT) of rice in 2013, 8.4mn MT of corn, 5.4mn MT of fishery products and 3.13mn MT of coconutbased products Electrification projects under the Sitio-Electrification Program and Barangay line Enhancement program to benefit at least 128,280 households Budget for State Universities and Colleges (SUCs) to improve the capabilities and skills of graduates
PhP 2.0bn
PhP 12.0 bn
PhP 3.5 bn PhP 15.3 bn
PhP 6.3bn
PhP 37.1bn
Source: The Presidents Budget Message Fiscal Year 2013 32

Strategic programs of five key result areas
Key Result Area
Amount
Program
Just and Lasting Peace and the Rule of Law
PhP 13.4bn PhP 5.0 bn PhP 47.2bn PhP 2.1bn PhP 91.7 bn
ARMM Investment Plan with interventions in health, education and infrastructure AFP Modernization Program to provide the best equipment, seacraft and aircraft Internal security Territorial defense Strengthening the capability of PNP to enforce laws to prevent, suppress and investigate crimes Earmarked for the Judiciary to clear docket and ensure that the 309,721 cases under trial at the Supreme Court and the Lower Courts are resolved and for faster resolution of cases at the Court of Appeals and Court of Tax Appeals Implementation of the Unified mapping project targeting 18 major river basins to support the production of topographic maps covering 5.4mn hectares as inputs for simulations of hazards such as landslides and floods Calamity Fund Flood control projects, including the construction of 20,043 lineal meters (lms) of dikes and seawalls, 16.671 lms of revetment and slope protection and flood control structures covering 4,233 cubic meters of waterways and creeks
PhP 17.8 bn
Integrity of the Environment and Climate Change Adaptation and Mitigation
PhP 1.5 bn
PhP 7.5bn PhP18.2bn
Source: The Presidents Budget Message Fiscal Year 2013
33 33
Fiscal Program: Consolidation Efforts on Track

Creating a sustainable fiscal revenue and spending path National Government Fiscal Program Keeping the deficit within manageable levels is a fundamental goal of the government The National Government budget is designed to keep the ROP on track to achieve a deficit of 2.0% of GDP by 2013 Tax collection effort in 2013 is expected to reach 13.8% of GDP
Levels (PhP Bn) Particulars 2012 Program Revenues Bureau of Internal Revenue Bureau of Customs Privatization Others Disbursements Current Operating Expenditures o..w. Interest Payments Capital Outlays Net Lending Surplus/(Deficit) Memo Item: GDP
Source:: Budget Expenditures and Sources of Financing 2013
Percent of GDP 2012 Program 14.5 9.9 3.2 0.0 1.4 17.1 13.4 3.0 3.5 0.2 (2.6) 10,734.2 2013 Proposed 14.9 10.4 3.3 0.0 1.2 16.9 13.3 2.8 3.4 0.2 (2.0) 11,951.9
2013 Proposed 1,780.1 1,238.6 397.3 2.0 142.2 2,021.1 1,585.0 333.9 409.6 26.5 (241.0)
Growth Rate (%) 20122013 14.1 16.2 14.5 (2.2) 9.9 9.9 5.1 9.5 15.2 (13.7)
1,560.6 1,066.1 347.1 2.0 145.4 1,839.7 1,442.6 317.7 374.1 23.0 (279.1)
34
Financing Program: Domestic/Foreign Mix Effectively Managed

Increasing reliance on domestic financing sources
National Government Financing Program 2012 - 2013

Proposed foreign-to-domestic borrowing mix maintained at 25:75 in 2013 Prudent strategies to finance the annual funding requirement minimize foreign exchange risk and increase funding self-sufficiency Adequate liquidity in the domestic financial market allows increased reliance on local funding sources
Program PhP Mn Total Net Financing Requirement Gross Foreign Borrowings Net Foreign Borrowings Gross Domestic Borrowings Net Domestic Borrowings Net Financing Change in Cash Financing Mix (%) Foreign Domestic 25 75 2012 279,106 181,435 118,150 535,074 215,190 333,340 5,768
Proposed 2013 241,000 189,761 80,845 567,958 227,530 308,375 10,248
25 75
35
Source:: Budget Expenditures and Sources of Financing 2013
Trade and Investments: Latest Developments

Improving the business environment to increase investments
2009 2012 (Jan-Jun) Performance 2012 Investments Priorities Plan (IPP) was approved in June 2012 with the theme A New Day for Investments: Coherent, Consistent, Creative Agriculture/Agribusiness and Fishery Creative Industries/Knowledge-Based Services Shipbuilding Mass Housing Iron and Steel Energy Infrastructure Research and Development Green Projects Motor Vehicles Strategic Projects Hospital/Medical Services Disaster Prevention, Mitigation and Recovery Projects 34 investment projects worth PhP141.3 bn previously approved by BOI were realized during S1 2012 and expected to generate some 13,712 jobs 322 companies visited the Philippines through inbound missions (85 individual company visits; and 23 multi-company delegations composed of 237 individual companies/organizations) with interest in IT/BPO, R&D, Green Energy, Manufacturing, Infrastructure and Aerospace Actual (In PhP Bn) Outcome BOI-PEZA total approved investments 2009 2010 2011 Jan-Jun 2012 238.73
299.54
506.49
657.27
7 outbound investment promotion missions conducted in Asia; several companies expressed interest to develop projects in areas such as hydropower energy, solar energy, evehicle, BPO, cornstarch and corn syrup production, shipbuilding Implemented the rollout of the DTI-DILG Joint Memorandum Circular on the formulation of the Local Investments and Incentives Code (LIIC) through the crafting of guidelines and conduct of training programs for LGUs Streamlined BOI registration process, reducing 20 working days process of application for registration to just 5 days. Conducted Industry Development Forum to jumpstart the industry development program Reduced processing time of business name registration to 15 minutes from an average of 4-8 hours. From Jan-Jul 2012, 197,180 business names were registered, 87% were new and 13% were renewals
36 Source: Board of Investments, Department of Trade and Industry

Ensuring sustainable employment through enterprise development and strong private sector partnership
2011 - 2013 Targets
ASENSO (formerly known as SULONG) released PhP 254.37 bn to SMEs and supported an estimated 3.65 million jobs since its inception in 2004. For the period Jan-Jun 2012, the program released PhP 12.16 bn to SMEs and supported 162,719 jobs. Assisted 4,619 microenterprises in S1 2012 through the Rural Microenterprise Promotion Program (RuMEPP). Provided 334 MSMEs and 194 non-MSMEs with design services and technical assistance in S1 2012 Conducted SME caravans attended by 19,319 participants in 26 provinces (2011-Jul 2012)
Actual Year MSMEs assisted Jobs created 2011 64,931 535,494 Jan-Jun 2012 33,884 321,994
Targets 2012 70,804 523,600 2013 77,884 575,960

Double Exports: Move up the value chain
Conducted 163 briefing sessions on Doing Business in Free Trade Areas in Jan-Aug 2012 Generated USD118.30 million sales in JanMay 2012 through trade promotion activities Developed 490 new importers for Philippine products, served 1,279 export opportunities, assisted 5,318 exporters and businesses and sent 292 buyers to the country Programs and Strategies: Develop linkages for natural, organic, and certification-enabled products in tourism services Widen the base of Philippine exports or diversify their products to conform to market requirements Doing Business in Real Time
Outcome Merchandise exports increased
2012 - 2014 Targets and Goals

Actual 2011 Value (USD Bn) Growth (%) Value (USD Bn) Growth (%) Value (USD Bn) Growth (%) 48.3 -6.2 15.5 9.6 63.8 -1.7 2012 53.1 10.0 17.8 15.0 70.9 11.0 Targets 2013 61.1 15.0 20.4 15.0 81.5 15.0 2014 70.3 15.0 22.5 10.0 92.7 14.0
Service exports increased
Total Exports
Five Priority Areas for Economic Development and Job Generation

Harnessing the industry sectors potentials as engine of growth
Source: Department of Budget and Management, 2013 Proposed Budget in Brief
39
Semiconductor and Electronics Manufacturing

Recent Performance/Accomplishments, Goals and Targets, Market Opportunities and Strategies and Programs
Recent Performance/ Accomplishments Goals and Targets
The Philippine electronics industry remains to be a major contributor to the economy. For Jan-Jun 2012, electronics exports reached US$12.45 billion or 45.40% of total merchandise exports For the year 2011, direct employment in the industry is recorded at 516,000 registering a 3.2% growth and investments in the industry reached its highest value ever at USD2.45 bn Target of 10 to 15 percent growth in 2012 to reach US$50 billion by 2016; Can potentially employ 1.1 million workforce by 2016 Additional revenues expected from high value chain export (Integrated Circuit design) The replenishment of inventory and continuing development of killer apps are expected to drive demand in the electronic industry Automotive electronics is on an upward trend as people buy cars because of their electronics features (safety, etc.); expected to grow by 25% onwards High Definition Digital business is also expected to go up The current worldwide trend of rising personal consumption expenditure indices due to elections in many countries is expected to have a spill over effect on electronics The rising cost of labor in China and 2011 floods in Thailand have made the Philippines an ideal relocation site due to its highly educated and competent English-speaking labor; excellence in customer service and communications skills; and highly skilled manpower pool Provide consistent policy agenda to enforce incentives laws and regulations Continue TESDA industry training program on unified competency development Continue the implementation of the IC Design Training Program (PH-Taiwan Collaboration) with ERDT university participants to develop pool of IC designers in the Philippines Collaborate with industry key players and other stakeholders in the supply chain analysis of the industry towards its development Integrated government-industry strategy for market growth in the promotion of the sector Manufacturing Excellence Drive; Best practice sharing People productivity programs Power/water conservation and cost reduction
Market Opportunities
Strategies and Programs
40
Source: Bureau of Export Trade Promotion, Department of Trade and Industry
Agriculture and Fisheries: Thrusts, Priorities, and Strategies for FY 2013

Investing in the future, securing the food of the Filipino people
Key Result Area Food Staples Sufficiency Program (FSSP)
Strategies Five-in-two program: 5 croppings in 2 years Frontload investments in irrigation, postharvest facilities and mechanization Focus on longer-term investments Engage farmers associations/irrigators associations, LGUs and the private sector proactively Encourage the production and consumption of other food staples Implement NFA reforms Conserve and improve genetic materials Prevent, control, and eradicate diseases Establish postharvest facilities Explore and promote alternative nutrition technologies Pursue possible export opportunities Promote the production of white corn and cassava to ease the demand on rice Encourage clustering approach to improve productivity Promote cost-reducing technologies for yellow corn Promote quality planting materials for cassava as food, fuel, and fuel substitutes Establish production facilities Establish postharvest and processing facilities Conduct R & D activities Participate in implementing the National Greening Program (NGP) Regenerate marine resources through coastal resource management and aqua-silviculture projects Protect marine resources through effective enforcement of fishery laws Increase production through mariculture parks, hatcheries, and nurseries Conduct R & D activities along stages of the value chain Enhance food safety and product quality monitoring
41
Livestock and Poultry
Corn
High-Value Crops
Fisheries
Source: Department of Agriculture

Investing in the future, securing the food of the Filipino people
Key Result Area Core Public Investments
Strategies Irrigation activities shall include generation of new areas; rehabilitation, repairs/restoration, maintenance of existing systems; and the installation/construction of small scale irrigation systems; More durable market access infrastructure like farm-to-market roads, fishports, postharvest facilities and equipment Strategically located market infrastructure such as the multi-commodity farm and fish trading centers that enable small producers to capture their just share of profits, as well as result in cheaper prices for consumers Increase support to an integrated research & development and extension program by upgrading our regional integrated agricultural research centers (RIARCs) and other DA research centers, in collaboration with SUCs and LGUs Sharpen regulatory competence through technical and legal training, alongside improvements in laboratories and equipment Wider promotion of high quality genetic materials like high-yielding variety seeds, planting materials, fingerlings, and livestock Strengthen the crop, livestock, and fisheries protection and disease prevention programs (e.g. integrated pest management, including bio-control) Strengthen soil and water conservation and management program (e.g. erosion control measures, soil fertility mapping, land degradation assessment) Empower farmers/producers with technological information and advice that will provide them options, from conventional to organic, and allow them to intelligently choose the system of production that suits them Improve farmers and fishers access to credit through institutional strengthening and suitable financing mechanisms Implement new farmers and fishers program to broaden the successor generation Capacitate the farmers and fishers to do higher value-adding activities by providing adequate marketing support through access to market information and trading centers and strengthening of food terminals
42
Investments in Agriculture and Fisheries Human Resources
Source: Department of Agriculture

Investment in the future, securing the food of the Filipino people
Key Result Area Climate Change Initiatives
Strategies Build capacities in risk assessment and disaster management utilizing Remote Sensing, GIS, and GPS technologies and establish the Climate Risk Information System of the Department Invest in climate-resilient equipment and infrastructures, with improved design standards and construction protocols Invest in technology development and extension, e.g. the development of climate-resilient crops, livestock, poultry and fisheries, use of biotechnology, soil and water conservation practices, including early warning systems and evacuation protocols Provide access to loans and develop risk transfer mechanisms such as weather based insurance, and even expand insurance coverage from crops to livestock and aquaculture Strengthen and modernize data collection to have the ability to track and conduct quick and effective surveys on a national basis Intensify Climate Change information, education and communication (IEC) efforts Harmonize DAs support services at the field level with that of: DAR and DENR to eliminate wasteful duplication, resulting in better quality of service and wider coverage; DPWH on flood control and water impounding for irrigation; and DSWD on cash-for-work in paddy construction, irrigation canal desilting and coconut replanting and salt-making for coconut fertilization Support passage of the priority legislatures and policy instruments, to wit: National Land Use Law NFA Reforms Rationalization of the functions, structure and mandate of the 3 rural development agencies (DA, DAR, DENR) Accelerated Irrigation Act Food Safety and Food Labelling Law
Enhanced Policy Environment and Governance
43 Source: Department of Agriculture
Tourism Industry
Latest Achievements
Visitor arrivals in S1 2012 grew 11.68% to 2,143,506 The biggest volume of arrivals was registered in Jan 2012 at 411,064 and the highest growth rate of 17.54%. Top 5 markets: Korea : 22.15% share of total inbound traffic; 474,685 arrivals U.S. : 16.53%; 354,259 arrivals Japan: 9.12%; 195,504 arrivals China : 7.03%; 150,749 arrivals Taiwan: 5.33%; 114,269 arrivals Other major contributors: Australia : 92,648 arrivals Singapore : 73,015 arrivals Canada : 65,503 arrivals Hong Kong : 57,790 arrivals UK : 57,181 arrivals. High growth markets include Russia with 42.92% growth in arrivals, Saudi Arabia with 18.94%, Germany with 12.61% and Malaysia with 11.96% Arrivals of Filipinos permanently residing abroad reached 110,703, comprising 5.16% of the total
2012 Target 4.1 Mn Foreign Visitors
Source: www.tourism.gov.ph; Department of Tourism
National Tourism Development Plan

Strategic Directions and Action Plans
Key Result Area Improve market access and connectivity Develop and market competitive tourist destinations and products
Strategies Expand capacity of secondary international airports Expand connectivity to key growth markets Implement strategic access infrastructure between secondary airports and tourist destinations Implement destination infrastructure program Develop diversified products Implement mandatory accreditation Safeguard natural environmental and vulnerable groups Implement market strategy Institutionalize roles of Department of Tourism and Local Government Units Develop the competence of tourism workforce Improve safety and security measures for tourists
Improve tourism institutions, governance and human resources
Source: Department of Tourism
Infrastructure
Good governance reform and anti-corruption program
Key Result Area Right Projects
Strategies Objective programming criteria based on planning applications (i.e. PMS-HDM 4) Project Status available on the DPWH Website Public consultation and disclosure on public expenditure (eNGAS) and project identification up to project completion Detailed Design, Program of Work and Detailed Cost/Estimates prepared/evaluated based on restructured Indirect/Direct Costs Open, Transparent and Competitive Bidding which resulted in savings 24/7 DPWH Call Center (165-02) to address queries and complaints Outsourced project inspection and quality assurance Developing ISO Standards of DPWH Offices Accredited 47 Civil Society Organizations (CSOs) partners for monitoring Bantay Lansangan Road Sector Report Card Rating Close monitoring of project implementation Professionalize DPWH Employees
Right Cost
Right Quality
Right on Time
Right People
Source: Department of Public Works and Highways
Infrastructure BETTER QUALITY AND SAFER NATIONAL ROADS AND BRIDGES PROGRAM
Better quality and safer national roads and bridges program
Key Result Area Upgrade Quality
Strategies
Adopted new standards for concrete pavement thickness from 230mm to 280mm Outsourced project inspection and quality assurance Developed new construction design standards and specifications upgrade drainage specifications, slope protection & soil erosion control, widening of national roads Strengthening/retrofitting of national bridges to comply with international seismic standards SAFER ROADS PROGRAM Construct loading and unloading bays for road safety Improve road safety using Traffic Accident Recording and Analysis System (TARAS) and International Road Assessment Program (iRAP) Enforce anti-overloading provision of the law Upgrading of temporary bridges to permanent structures
Safety
Strategic Convergence Program
Strategic Partner DOT
Convergence Program TOURISM CONVERGENCE PROGRAM: Support to designated strategic Tourism Destinations is included in the DPWH Budget; Memorandum of Agreement (MOA) between DPWH and DOT signed Selection of projects based on Tourism Road Infrastructure Project Prioritization Criteria WATER CONVERGENCE PROGRAM: Coordinate development of Flood Control, Small Water Impounding Projects (SWIPs) & Watershed Protection for more effective use of water resources and flood management Integrated River Basin Management Plan INTEGRATED TRANSPORT SYSTEM: Support for access to major airports and RORO ports is included in the DPWH Budget
DA/NIA DAR DENR

DOTC
Strategic Convergence Program
Strategic Partner MMDA
Convergence Program FLOOD MANAGEMENT PROGRAM: Coordinate flood control measures and needed infrastructure in flood prone areas of Metro Manila
DSWD
COMMUNITY BASED EMPLOYMENT PROGRAM: Prioritize CCT Beneficiaries for Labor Employment on DPWH projects Establish small micro-enterprises for road maintenance works PEACE AND PROSPERITY PROGRAM: Peace and Prosperity Program in Mindanao and other ConflictAffected Areas Support for infrastructure development in Mindanao is included in the DPWH Budget
DND AFP
DepED
SCHOOL BUILDING PROGRAM: Assist DepEd in developing PPP School Building Program Assist DepED in Regular school building program
DPWH Infrastructure Accomplishments

FY 2012, 2011, 2010 and Prior Years Budget July 2010 May 2012
Completed Bridge Projects National Bridges Made Permanent Rehabilitated/Strengthened Constructed Total: 2,297 6,458 7,495 16,250 Length (Meters) Local Bridges 419 1,839 2,340 4,599 Total 2,716 8,297 9,835 20,849
Baganga Bridge, Davao Davao City
Completed Road Projects National Roads Paved Rehabilitated/Maintained Widened Constructed Total:
Length (Kilometers) Local Roads 827 311 127 272 1,537 Total 2,362 3,174 445
El Nido-Taytay-Roxas
1,535 2,863 318 252 4,968
524 6,505
50
DPWH FY 2012 Fund Utilization (Disbursements)

Target vs. Actual as of July 31, 2012
160 147 140 120 106 100 80 60 46 40 20 0 Total (Full Year) Q1 Q2 FY 2012 (Actual) Q3 FY 2011 (Actual Q4 38 21 10 44 37 27 16 13 26 78
H1 2011: PhP 26 Bn H1 2012: PhP 65 Bn Increase: PhP 39 Bn (150%)
In Billion Pesos
53
FY 2012 (Target)

51
DPWH FY 2012 Fund Utilization

Absorptive Capacity as of July 31, 2012
180 160
Obligations vs. Allotments Disbursement vs. Obligations

167.67
52.12
68% 69%
140 In Billion Pesos 120 100 80 60 40 20 0 Allotments Obligations Disbursements

NCA/LDDAP/WA/TRA
(Extended/ Cont.)
113.63
42.44
78.37
115.55 (Current)
(Extended/ Cont.) 71.19 (Current)

52
Department of Public Works and Highways

FY 2013 Infrastructure Priorities and Strategies
On Road Network, Prioritize: National Road Upgrading; Preventive Maintenance of National Roads; Rehabilitation/Reconstruction of Damaged Pavements; National Bridges; Basic Education Facilities; Access to tourism destinations; Traffic decongestion in urban centers; PPP projects based on feasibility studies and master plan; and Access to airports and RORO ports, and food production areas and economic zones
On Flood Control, Prioritize: Flood Control and Water Impounding Structures within 20 Major River Basins and 376 Principal River Basins; Drainage/Protection Works along National Roads and Bridges
53
Pipeline of PPP Projects

Accelerating the provision of safe, efficient, reliable, cost-effective, and sustainable infrastructure
LGU PROJECTS EDUCATION

1 project | USD 233 mn 2 projects | USD 6.28 mn
TRANSPORTATION
8 projects | USD 1.88 bn
AGRICULTURE
2 projects | USD 186.9 mn
HEALTH SECTOR
2 projects | USD 126 mn
WATER SECTOR
ROAD NETWORK
TOTAL PROJECT COST: approx. USD 4.80 bn*

*Project Costs of O&M of LRT-2, O&M of Puerto Princesa, ITS, Bulacan Bulk Water, El Nido Solid and Liquid Waste Management Project= TBD
Source: PPP Center 54 54
54
Status of PPP Projects

As of 05 September 2012
PROJECT
PPP for School Infrastructure Project Phase I*
The project will involve the design, financing and construction of about 9,300 one storey and two-storey classrooms, including furniture and fixtures, in various sites in Regions I, III, & IVA. The project aims to supplement the current program of the Department of Education in reducing classroom backlog.
INDICATIVE COST (USD)

239.0 mn
STATUS
Awarded to consortiums of Citicore Holdings Investment, Inc. Megawide Construction Corp., Inc. and BF Corp. Riverbanks Development Corp. Bidder due diligence ongoing
LRT Line 1 Cavite Extension and O&M

The proposed alignment for the LRT 1 South Extension has an approximate length of 11.7 km from its tie in point at the terminus of LRT Line 1 at the Baclaran Terminal, to the Niyog Station at Bacoor, Cavite, of which approximately 10.5 km will be elevated and 1.2 km will be at-grade. The total length of the integrated LRT Line 1 will be approximately 32.4 km.
1.4 bn
NAIA Expressway Phase II

The proposed elevated expressway starts at the existing Skyway then generally follows the existing road alignment over Sales Avenue, Andrews Avenue, Domestic Road and NAIA Road and has entry/exit ramps at Roxas Boulevard, Macapagal Boulevard and PAGCOR City. The project provides access to NAIA Terminals I, II, and III and links two existing expressways namely the Skyway and Manila-Cavite Toll Expressway.
377.6 mn
Bidder due diligence ongoing
NLEx-SLEx Connector
Construction of a 13.4 km. 4-lane elevated expressway over the Philippine National Railway (PNR) right of way which starts at Caloocan City and ends in Buendia, Makati City. The project will connect North Luzon Expressway (NLEX) and South Luzon Expressway (SLEX) to decongest traffic in Metro Manila.
480.5 mn
For Submission to ICC
Modernization of Philippine Orthopedic Center*

This project involves the construction of a 700-bed capacity super-specialty tertiary orthopedic hospital to be located within the National Kidney and Transplant Institute (NKTI) Compound along East Avenue, Quezon City.
128.3 mn
In the process of securing Government approvals
*Approved PDMF Support

Source: PPP Center
55 55

As of 05 September 2012
PROJECT
Vaccine Self-Sufficiency Project Phase II*
The project is envisioned to accelerate progress in vaccine production in the Philippines, and ensure vaccine sufficiency in the country. VSSP II is expected to reduce overall vaccine procurement costs of finished vaccines through local refilling, labeling, and packaging of the following vaccines: Pentavalent (DPT-HepB-Hib, Diptheria, Pertussis, Tetanus-Hepatitis B and Hemphylus Influenza B), Tetanus Toxoid (TT), Single HepB.
STATUS
11.3 mn
Cavite-Laguna Expressway
Involves the construction of two expressways. One is on the Cavite Side which is a 27.5km, 4-lane highway from the terminus of R-1 Expressway in Kawit, Cavite to Aguinaldo Highway at Silang, Cavite. For the Laguna Side, this will involve the construction of a 14.3km, 4-lane at-grade expressway. The CALA Expressway will be connected to SLEX near Sta. Rosa, Laguna.
468.8 mn
O&M of Angat Hydro-Electric Powerplant Turbines 4&5*

The project involves the repair and privatization of the operation & maintenance of the existing auxiliary turbines owned by MWSS which are installed in the AHEPP. These auxiliary turbines contribute 28 megawatts to the Luzon Grid (10 MW from AN-4 & 18 MW from AN-5). The proposed project also entails procurement, installation, operation and maintenance of the second turbine for the Macua mini-hydro power plant.
38.1 mn
On-going ICC Project Review
Automatic Fare Collection System*

Decommissioning of the old magnetic-based ticketing system and replacing the same with contactless-based smart card technology on LRT Lines 1 and 2 and MRT 3, with the introduction of a centralized back office that will perform apportionment of revenues.
42.9 mn
For submission to NEDA
Mactan Cebu International Airport Passenger Terminal Building*

Construction of a new world-class passenger terminal building in Mactan, Cebu International Airport with a capacity of about 8 million passengers/year.
241.7 mn
For submission to NEDA

56 Source: PPP Center 56

As of 05 September 2012 PROJECT Enhanced O&M Panglao Airport*
Operation and Maintenance of the New Bohol (Panglao) Airport.
INDICATIVE COST (USD) 190.5 mn
STATUS Finalization of Project Structure On-going
O&M of Laguindingan Airport*

Operation and maintenance of the newly constructed international-standard airport in Laguindingan, Misamis Oriental.
42.9 mn
Finalization of Project Structure On-going
Grains Central Project

The project will establish grains bulk handling systems with corn grains processing centers and transshipment stations in major corn producing areas and selected sea ports by upgrading, expanding and enhancing the existing operations in at least fifteen (15) corn postharvest processing and trading centers.
29.8 mn
Ongoing Preparation of Feasibility Study
Establishment of Cold Chain Systems*

Construction and operationalization of Cold Chain Centers to be located in major production and consolidation areas of agri-fishery products. The Centers will be equipped with the required facilities and machineries for minimal processing of livestock, fisheries and high value crops.
121.2 mn
O&M of LRT Line 2

Operation and Maintenance of the existing LRT Line 2 and the proposed 4 km extension from Santolan, Pasig to Masinag, Antipolo. The existing 13.8 km Line 2 runs along the Recto Station in Manila to the Santolan Station in Pasig, along Recto Avenue, Magsaysay Boulevard and Marcos Highway.
TBD
O&M of Puerto Princesa Airport

The project involves the privatization of the operation and maintenance of the airport. The existing Puerto Princesa Airport will be upgraded/ improved into an international gateway meeting standards of the International Civil Aviation Organization (ICAO).
TBD

Source: PPP Center 57 57

As of 05 September 2012 PROJECT Talisay City Plaza Complex Heritage Restoration and Redevelopment Project
Involves the restoration and redevelopment of the Talisay City Plaza Complex, including the conversion of the Talisay City Central Public Market and the Old Talisay City Hall into mixed-use facilities.
STATUS
6.28 mn
Integrated Transport System*

The project will establish three (3) mass intermodal terminals at the outskirts of Metro Manila one in the north (of EDSA) serving passengers to and from northern Luzon, and two in the south serving passengers to and from Laguna/ Batangas side and those to and from the Cavite side. The terminals will connect passengers from the province to other urban transport systems railway, city bus, taxi, PUV-serving inner Metro Manila.
TBD
For procurement of Transaction Advisor
New Centennial Water Supply*

The project will involve the construction of a dam, a water treatment plan and an associated main pipeline to deliver water from the project location to Metro Manila. This project will provide water supply security in the metropolis.
595.2 mn
Bulacan Bulk Water Supply Project*

The project aims to address the water supply requirements of the municipalities of the Province of Bulacan. The project involves the construction of the following: treated water transmission mains, including appurtenances, from the WTPs to the agreed delivery points of the municipalities; water treated plants and ancillary facilities; treated water reservoirs; and pumping stations. This also includes installation of flow metering devices after the WTPs pumping stations, transmission branch points, and at the agreed delivery/ interconnection points; and installation of appropriate pressure monitoring stations.
TBD
Rehabilitation of Quirino Highway Project*

The proposed project entails the improvement/rehabilitation and operation and maintenance of Quirino Highway, a 93.45 km., 2-lane national road that traverses three (3) provinces, namely Quezon, Camarines Norte and Camarines Sur. It starts at the junction of the Pan-Philippine Highway in Tabugon, Sta. Elena, Camarines Norte and ends at the junction of the Pan-Philippine Highway in Sipocot, Camarines Sur.
TBD
El Nido Solid and Liquid Waste Management Facility*

TBD
58
Government of the Philippines
Amando M. Tetangco, Jr. BSP Governor and Chairman of the Monetary Board Bangko Sentral ng Pilipinas Mr. Amando M. Tetangco, Jr. is the Governor of the Bangko Sentral ng Pilipinas (BSP). He has been reappointed for a second term commencing 4 July 2011. As BSP Governor, he serves as Chairman of the Monetary Board, the BSPs principal monetary policymaking body. He is also the Chairman of the Anti-Money Laundering Council (AMLC). A career central banker, Governor Tetangco has been in the service of the BSP for more than three decades. Prior to his first appointment as Governor in July 2005, he was Deputy Governor in-charge of the Banking Services Sector, Economic Research and Treasury of the BSP. He also served as Alternate Executive Director of the International Monetary Fund in Washington, D.C. from 1992 to 1994. Governor Tetangco is involved in various organizations in the Philippines and overseas. Domestically, he is, among other positions held, Chairman of the Philippine International Convention Center (PICC), Vice-Chairman of the Agriculture Credit Policy Council, member of the Capital Markets Development Council (CMDC) and the Export Development Council (EDC). Overseas, he represents the country in ASEAN Central Bank Forum, Executive Meeting of East Asia and Pacific (EMEAP) Central Banks, South East Asia Central Banks (SEACEN), South East Asia, New Zealand and Australia (SEANZA), and Center for Latin American Monetary Studies (CEMLA). In addition, he is the Governor for the Philippines in the International Monetary Fund (IMF) and the Alternate Governor in the World Bank (WB) and in the Asian Development Bank (ADB). Governor Tetangco studied economics and business administration at the Ateneo de Manila University. He finished his MA in Public Policy and Administration with a concentration in Development Economics at the University of Wisconsin-Madison in the United States. He has attended various training programs at different institutions including the Harvard Business School.
59
Cesar V. Purisima Secretary Department of Finance Mr. Cesar V. Purisima was appointed as Finance Secretary by President Benigno Aquino III in July 2010. He also briefly served as Finance Secretary in 2005 and as Trade and Industry Secretary in 2004 for the previous administration. Recently, Secretary Purisima won the 2011 Emerging Markets Finance Minister of the Year Award for Asia for his strong policy track record and steadfast commitment to maintaining economic stability over the past 12 months. He was also the Chairman of the Board of Governors during the 45th ADB Annual Meeting held in Manila in 2012. His government service experience include serving as Chair and Member of the Board of various government companies among them, the National Power Corporation, Land Bank of the Philippines and the Monetary Board (Bangko Sentral ng Pilipinas) in 2005. In July 13, 2010 he was appointed as government representative to the Monetary Board for the second time. Secretary Purisima has extensive work experience in public accounting both here and abroad. He was Area Managing Partner as head of the Asia Pacific Assurance Practice of Andersen Worldwide from 2001-2002 and was Regional Managing Partner as head of the ASEAN operation from 2000-2001. He was member of the Global Board of Andersen Worldwide from 1999-2002 and the Global Executive Board of Ernst & Young from 2002-2004. He was also Chairman and Managing Partner of SGV & Co until January 2004. Likewise, he has been a member of various business organizations including the Management Association of the Philippines, Philippine Institute of Certified Public Accountants, Philippine-France Business Council, Philippine-Thailand Business Council and the Makati Business Club, among others. Secretary Purisima obtained his Bachelor of Science in Commerce, Major in Accounting and Management of Financial Institutions from De La Salle University (1979) and his MBA from JL Kellogg Graduate School of Management, Northwestern University in Chicago, Illinois (1983). In 1979, he was among the top placers in the Philippine Board Examinations for Certified Public Accountants.
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Proceso J. Alcala Secretary Department of Agriculture A civil engineer by profession, Mr. Proceso J. Alcala was appointed as Secretary of the Department of Agriculture (DA) by President Benigno S. Aquino III in June 30, 2010. Prior to his appointment, he served as a Representative of the 2nd District of Quezon Province for two three-year terms (2004-07, 2007-10). As a lawmaker, Mr. Alcala authored the Organic Agricultural Act of 2010 (RA 10068), Mounts Banahaw-San Cristobal Protected Landscape Act (RA 2718), and co-authored the Climate Change Act (RA 9729) and the Expanded Senior Citizens Act (RA 9994). Among other projects, he led and supported the establishment of the Sentrong Pamilihan ng Produktong Agrikultura sa Quezona trading center in Sariaya town that allowed farmers to sell their produce directly to wholesale buyers resulting in increased incomes for the producer families. This trading center now serves as a model throughout the country. At the DA, Secretary Alcala laid the Agrikulturang Pilipino or Agri-Pinoy framework as guide to the plans and goals of the Department for a progressive, sustainable and competitive national agriculture and fisheries sector. Through his leadership and management by going around, he enjoined all stakeholders to put the farmers and fishers at the center of all programs and help restore trust in government. Over two years, he has visited all 80 provinces in all 16 regions of the country, meeting and feeling the pulse of small farmers, fisherfolk and local officials and returned to office with field-based methods to deliver improved, effective and direct assistance of the Aquino Government. Under his stewardship, the Philippines is no longer the number one rice importer in the world. He aims to achieve national sufficiency in rice by end of 2013 through the Food Staples Sufficiency Program. The substantial increase in the DAs 2012 budget by more than 60 percent to over P60 billion signals the support that Secretary Alcala and the new DA have gained under the Aquino administration. The Secretary is currently gearing up the Regional Field Units (RFUs) of the DA to achieve an internal synergy that will allow the Department to advance agri-fishery modernization. Secretary Alcala obtained his B.S. Civil Engineering from the Luzonian University Foundation in 1978 and is a lifetime member of the Philippine Institute of Civil Engineers.
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Rogelio L. Singson Secretary Department of Public Works and Highways Mr. Rogelio L. Singson, in leading the State's engineering and construction arm as its 42nd head, advocates transformation and innovation in governance through transparency and accountability, doing the right project, for the right price and the right quality, and undertaking more public-private partnership (PPP) projects. Secretary Singson has extensive experience in both government and private sector in the field of privatization and public-private partnership, management of tollroads and expressways, water and power utilities privatization, airports, seaports and resorts. He was President and Chief Executive Officer of Maynilad Water Services, Inc. after its re-privatization from July 1, 2007 to June 30, 2010 under new owners, the DMCI-Metro Pacific Consortium. He also served in various executive positions such as Senior Vice President for Business Development, Citadel Holdings, Inc. from July 2002 to May 2007; Chairman & President of Bases Conversion & Development Authority; and Chairman of the Board of John Hay Poro Point Development Corporation. His other past involvements in the public sector includes serving as Executive Director of the Coordinating Council of the Philippine Assistance Program which coordinate and monitor the official development assistance project and programs from May 1991 to November 1992; and Assistant Cabinet Secretary under the Office of the President Corazon C. Aquino from July 1987 to May 1991. Secretary Singson obtained his Bachelor of Science Degree in Industrial Engineering from the University of the Philippines in 1971 and attended a Master's Program in Public & Business Management at the De La Salle University. He also attended various trainings abroad on PPP, privatization and Build Operate Transfer (BOT) Schemes.
62
Gregory L. Domingo Secretary Department of Trade and Industry Mr. Gregory L. Domingo was appointed as Trade and Industry Secretary by President Benigno Aquino III in July 2010. He previously served as Department of Trade and Industry (DTI) Undersecretary for the Industry and Investments Group (IIG) and Managing Head of the Board of Investments (BOI) from May 2001 to April 2004. Prior to his stints with the government, Secretary Domingo was President of Carmelray-JTCI Corp. (CJC) from July 1997 to November 2000. He worked for Chase-Manhattan Bank in various capacities from July 1989 July 1997 and with a number of financial institutions in the United States (First Boston, Drexel Burnham Lambert and Mellon Bank) from 1982 to 1989. Secretary Domingo also served as Vice Chairman of Belle Corporation and director for SM Investments Corp., BDO Private Bank, PASUDECO, Manila Electric Corp., Pico de Loro Beach and Country Club, Wharton-Penn Club, and Foreign Exchange Association of the Philippines. He was also a member of the Open Market Committee of the Bankers Association of the Philippines (BAP). Secretary Domingo obtained his Masters of Science in Operations Research at the Wharton School- University of Pennsylvania in 1982, finished his MBA with distinction at the Asian Institute of Management in 1980, and graduated with a bachelors degree in Management Engineering at the Ateneo de Manila University in 1976.
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Ramon R. Jimenez, Jr. Secretary Department of Tourism What truly makes the Philippines a unique, amazing, and special place to see? For the Department of Tourism (DOT), it has found the simplest, most direct answer to the fundamental question of every traveler through its latest tourism campaign, Its more fun in the Philippines. The new expression is a powerful, compelling idea that draws strength from the fact that it is a fundamental truth about the Philippinesthe Philippines is not just a place to see, it is a place to be. The man behind this now very popular tagline that became a top trending topic worldwide in just a matter of hours on the day it was launched is a writer, mentor, former instructor, marketing communications expert, and one of the pillars of Philippine advertising Mr. Ramon R. Jimenez, Jr., Secretary of the Department of Tourism. In keeping with his promise to make tourism the peoples business, Secretary Jimenez aims to transform the DOT into a primary selling unit with the ultimate goal of not only improving statistics, but also ensuring that every endeavor would be fulfilling and profitable for Filipinos. Under his leadership, the DOT has embarked on convergence projects with government agencies and the private sector, and actively espoused policy reforms. With his marketing communications experience, Secretary Jimenez hopes to build enough energy around tourism to give the Philippines a positive image. Brimming with confidence, he looks forward to meeting our target of 10 million tourist arrivals by 2016 and seeing tourism finally take its place as a key driver of socio-economic progress in the country, to make it more fun for all.
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Florencio B. Abad Secretary Department of Budget and Management Mr. Florencio B. Abad was appointed by President Benigno Aquino III as Secretary of Budget and Management in July 2010. He also served as Secretary of Agrarian Reform during the late President Corazon Aquinos administration and served as Secretary of Education under the Arroyo administration. He was elected member of the House of Representatives in 1987 representing the Lone District of Batanes. He was subsequently re-elected in 1995, 1998 and 2001. He became president of the Liberal Party of the Philippines from 1999 to 2004 and is currently the Vice President for Policy and Platforms. Secretary Abad finished his Bachelor of Science in Business Management, and Bachelor of Laws at the Ateneo de Manila University and passed the Bar Examination in 1985. A fellow of the Edward Mason Program in Public Policy and Management at the Kennedy School of Government in Harvard University in Cambridge, Massachusetts, he also holds a Masters in Public Administration degree. Previously, Secretary Abad was a union organizer/trainer, research director of the Ateneo Center for Social Policy and Public Affairs, and a legal and management consultant to different local and foreign foundations.
65
Jose Rene D. Almendras Secretary Department of Energy Mr. Jose Rene D. Almendras is the Secretary of the Department of Energy (DOE). Under his leadership, the DOE was ranked by the Management Association of the Philippines as one of the Top 10 Performers, out of 50 government agencies, in a survey on government performance specifically on ensuring integrity in public service. He also became co-chair of the high level discussion on Long Term Strategy for the International Renewable Energy Agency (IRENA) held in Abu Dhabi in 2011. It was also on the same year that the Philippines became a rotating member of the Executive Board of the International Energy Forum (IEF) at the 4th Asian Energy Ministerial Roundtable on Sustainable Growth and Energy Independence held in Kuwait. Secretary Almendras assumed significant leadership roles in the top corporations in the country. He was previously President of Manila Water Company where he was instrumental in the expansion and growth of the company including the recognition it earned here and abroad; to name a few - Best Managed Companies in Asia, the Best in Corporate Governance, one of the Greenest Companies in the Philippines and most recently, hailed as the worlds Most Efficient Water Company. He started his corporate career at Citytrust Trust Banking Corporation and later moved to Citibank as Account Management Group Head in the Visayas in 1985. He became the Treasurer of Aboitiz Group for both the Aboitiz Company and Aboitiz Equity Ventures. He has also served as President of City Savings Bank, and was appointed CEO of Cebu Holdings Inc. and Cebu Property Ventures and Development Corporation and later assumed the role of Business Group Head for VISMIN (Ayala Land) and concurrently Operations Transformation Group Head of Ayala Land. Mr. Almendras is an acknowledged international resource person on Sustainable Development and leadership as evidenced by the long list of international speaking engagements in Asia, Europe, and the US. He is a staunch sustainability advocate and a leader in doing business at the base of the pyramid, as well as ensuring the triple bottom line of financial profits, social impact, and environmental protection.
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Arsenio M. Balisacan Secretary National Economic and Development Authority

Dr. Arsenio M. Balisacan is Socioeconomic Planning Secretary and Director-General of the National Economic and Development Authority (NEDA). Prior to his appointment in NEDA, he was Dean and Professor of the University of the Philippines (UP) School of Economics and Executive Director of the Philippine Center for Economic Development. He has taught Development Economics, Agricultural and Resource Economics, and Economics of Poverty and Inequality. An Academician of the National Academy of Science and Technology and Adjunct Professor of the Australian National University, Secretary Balisacan is now on secondment from UP. He also served as Director-Chief Executive of the Southeast Asian Regional Centre for Graduate Study and Research in Agriculture (SEARCA), an intergovernmental organization, for six years (2003-2009) wherein he led SEARCA gain stature in the academic world and become a regional center of excellence for agriculture and rural development in Southeast Asia. In 2000-2001 and 2003, he was Undersecretary for Policy, Planning and Research of the Department of Agriculture (DA). As Undersecretary of DA, he was the countrys chief negotiator in the Agriculture Negotiations of the World Trade Organization (WTO) and in various bilateral agriculture negotiations. Before joining the UP faculty in 1987, he was a Research Fellow at the East West Center in Honolulu and Economist at the World Bank in Washington, D.C. A recognized expert in Asia on poverty, food security, agricultural and rural development, human development, impact assessment, and governance issues, he served as adviser to public chief executives and legislators, non-government organizations, and multilateral development institutions such as the World bank (WB), Asian Development Bank (ADB), various United Nations (UN) agencies and the Australian Centre for International Agricultural Research (ACIAR). He has led leadership positions in professional associations. He served as President of the Philippine Economic Society in 2006, President of the Human Development Network in 2003-2009, Founding Secretary-General of the Asia-Pacific Agricultural Policy Forum in 2003-2006, and Executive Secretary of the Southeast Asian University Consortium for Graduate Education in Agriculture and Natural Resources in 2003-2009. Currently, he is President of the Asian Society of Agricultural Economics. Dr. Balisacan holds a PhD in Economics from the University of Hawaii, an MS degree in Agricultural Economics from the University of the Philippines Los Baos and a BS degree in Agriculture (magna cum laude) from Mariano Marcos State University.
67
Joseph Emilio Abaya Incoming Secretary Department of Transportation and Communications Mr. Joseph Emilio "Jun" Aguinaldo Abaya was appointed by President Benigno Aquino III on August 31, 2012 as the new DOTC Secretary. A member of the Liberal Party, he has been elected to two terms as a Member of the House of Representatives of the Philippines, representing the 1st District of Cavite. He first won election to Congress in 2004, and was re-elected in 2007. Prior to representing the 1st district, Cavite to the House of Representatives in 2004, he first served in the Armed Forces of the Philippines as a Cadet (1984-1988) and as a Naval officer of the Philippine Navy (1988-2004). He ran for congressman in 2004 and represented the 1st District of Cavite to the 13th Congress of the Philippines. He was re-elected in the 2007 elections. During the 14th Congress, He was Chairman of the House Committee on Science and Technology. He was also Co-Chairman, with Senator Eduardo Angara, of the Joint Congressional Committee on Science and Technology and Engineering. During the 15th Congress (2010) and on his last term, he served as the Chairman of House Committee on Appropriations. Secretary Abaya finished his elementary education from De La Salle University in 1979. During his secondary school years, he was a consistent honor student at the Philippine Science High School. He became a University and College scholar of the University of the Philippines where he took his engineering studies. While in UP, he took and topped the entrance examination for the Philippine Military Academy that he was sent by the government to the US Naval Academy (USNA) in Annapolis, Maryland, USA where he earned his Bachelor of Science degree in Mathematics (1988) with distinction of being a consistent Dean's Lister in all the semesters he was there. He then proceeded to Cornell University in Ithaca, New York, USA and completed Master's degree in Electrical Engineering (1989 - he was also a fellowship awardee. He thought it fit to prepare himself further as a lawmaker that he studied law. He received his Juris Doctor degree from the Ateneo de Manila University, School of Law in April 2005. He was admitted to the Philippine Bar in 2007.
Rene K. Limcaoco Undersecretary Department of Transportation and Communications Mr. Rene K. Limcaoco was appointed Undersecretary of Planning and Infrastructure Projects of the Department of Transportation and Communications (DOTC) in 2011. He is also professor at the Ateneo de Manila Law School where he teaches Economic Analysis of Law and The Economics of Antitrust Law. Prior to his stint in government, he was President of Lica AutoNation Inc. Automotive Group from 1997-2011. He also previously worked as Senior Legal Manager at the Price Waterhouse, Office of Government Services from 1995-1997. Undersecretary Limcaoco also served as Senior Associate of Hadiputranto Hadinoto Dermawan Law Office in Jakarta, Indonesia and specialized in financial products and Quisumbing Torres & Evangelista Law Office (Baker & McKenzie Manila) specializing in banking and finance law. He has also worked as Economic Analyst at SKR Managers and Advisors, Inc. Manila. Undersecretary Limcaoco obtained his Bachelor of Laws with distinction in 1990 at the Ateneo de Manila Law School where he was Editor-in-Chief of the Ateneo Law Journal and Bulletin. He finished his bachelors degree in Economics with concentration on Developmental Economics at Stanford University in 1986.
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Claro P. Fernandez Executive Director Investor Relations Office
Mr. Claro P. Fernandez became Executive Director of the Investor Relations Office in February 2009, bringing a wealth of experience as a communications professional with years of work in broadcast and print media reporting on business/financial news and recent jobs in the Office of the President, a major Philippine universal bank and a California-based startup BPO. Mr. Fernandez started out as a business reporter and had stints with the Manila Chronicle, Business Day, Financial Post and Daily Express from 1985 to 1991. He shifted to broadcast media in 1991 to 1996 where he moved on to become News Director and Associate Producer at GMA 7s news and public affairs programs. Later on, Mr. Fernandez joined the banking industry as Vice-President of the Corporate Affairs and Investor Relations Office (CAIRO) of Philippine National Bank (PNB) in 1997. He transferred to and worked in the Information Technology Group (ITG) of PNB from 1999 to 2001. In 2002, he began his career in government service as Press Undersecretary and later on served as the Deputy Communications Director with the rank of Undersecretary at the Office of the President from 2004 to 2005. As Press Undersecretary, he oversaw the functional operations of the offices and agencies that handle the administrations public information and news and information dissemination. Mr. Fernandez received his entire education from the University of the Philippines from grade school to college. He graduated with a BA Communications degree in 1985.
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Private Sector
Benedict C. Hernandez President and CEO Business Processing Association of the Philippines
Benedict C. Hernandez became President and Chief Executive Officer (CEO) of the Business Processing Association of the Philippines (BPAP) on January 2, 2012. He leads the association in pursuing its Road Map 2016 vision to create 1.3 million direct jobs and more than double the revenues of the information technology (IT) and business process (BPO) industry to $25 billion by 2016. To achieve this, BPAP drives key initiatives in talent pool expansion, country promotion, and maintaining a favorable business environment. Concurrently, Benedict will continue to be Accenture BPO Services Delivery Operations Lead in the Philippines and president of the Contact Center Association of the Philippines (CCAP). He is also a founding director of CCAP which celebrated its 10th anniversary in 2011. As CCAP president, he was a member of the BPAP board of trustees from 2007 to 2009 and in 2011. Benedict is a recognized pioneering leader of the Philippine IT-BPO industry. In 2000, Benedict was appointed general manager of industry pioneer eTelecare. During his almost 10 years as eTelecares country head, the pioneer contact center grew to over 10,000 employees, successfully listed in NASDAQ, expanded its operations to US and LATAM, and gained a record number of international awards, including five times as Best Outsourcer at ICCM, the worlds largest contact center expo. eTelecare also has the distinction of being the only IT/BPO company in the Philippines to have been chosen Best Employer by the People Management Association of the Philippines (PMAP) in 2007. Benedict was honored as one of the Ten Outstanding Young Men (TOYM) in the Philippines in 2006 given his business leadership role in promoting the development of the contact center industry. As Accentures BPO Lead, Benedict oversees a diversity of BPO offerings including finance & accounting, health administration, network services, and other industry-specific BPO. With over 25,000 employees delivering technology and business process outsourcing services, multi-awarded Accenture is the largest IT and BPO company in the Philippines. Prior to outsourcing, Benedict was in the telecommunications industry during its hyper-growth years in the 90s. He was a pioneer employee at Smart Communications where he was head of customer care training, quality and research, and, later, at Nextel Communications where he served as VP for customer operations. He is a psychology graduate and later served as faculty member of the University of the Philippines from 1990 to 1993. Benedicts primary advocacy is to help develop and promote the Filipino talent as best-in-class in the global knowledge economy. 71
Private Sector
Aurelio R. Montinola, III President and CEO Bank of the Philippine Islands Aurelio R. Montinola, III, 61, Filipino, is the President and CEO of Bank of the Philippine Islands. His other affiliations among others, include: Vice Chairman, Mastercard Asia/Pacific Regional Advisory Board; Director, Ayala Land Inc; Vice Chairman and President, BPI Foundation; Vice Chairman, Far Eastern University; Vice Chairman, Republic Cement Corporation; and Director, Makati Business Club. He graduated with BS Management Engineering at Ateneo de Manila University in 1973 where he also studied high school and grade school. He received his MBA at Harvard Business School in 1977. He was awarded the 2005 and 2009 Asian Banker Leadership Award for the Philippines and the 2006 CEO Excel Award for Communication Excellence in Banking and Finance.
72
Private Sector
Jesse Ang Resident Representative, Philippines International Finance Corporation Mr. Jesse Ang is Resident Representative for the Philippine office of the International Finance Corporation. He has strong financial sector expertise and a solid track record in putting together investment deals in infrastructure, including power, water and telecommunications. He is the first Filipino to become the head of the IFC Philippine office. He joined IFC in February 2000 as the Principal Investment Officer primarily responsible for business development. Prior to joining IFC, he was the Chief Financial Officer and Treasurer of the Philippine International Air Terminals Company based in Manila. He worked in New York City for several years in various capacities, such as Director of the Global Structured Finance department in ANZ Investment Bank, Vice President of the Trade and Commodity Finance department in Generale Bank and Assistant Vice President in Irving Trust Company. His work experience involved significant travel to Latin American countries such as Mexico, Chile, Colombia, Venezuela, Brazil and Argentina and East Asian countries including Korea, Taiwan, Hong Kong and the Philippines. He earned his masters degree in Business Administration from the Wharton Graduate School of Business and a BS Industrial Engineering degree from the University of the Philippines.
73
Private Sector
Guillermo M. Luz Private Sector Co-Chairman National Competitiveness Council Guillermo M. Luz is the Private Sector Co-Chairman of the National Competitiveness Council, a public-private sector body dedicated to developing a strategy for the long-term competitiveness of the Philippines through policy reforms, project implementation, institution-building, and performance monitoring. He was Executive Vice President and Chief Operating Officer of Ayala Foundation from December 2006 to May 2011, a foundation which manages projects in education, environment, entrepreneurship, arts and culture, and community development. He concurrently served as Director of Ayala Museum from January 2010 to May 2011 He was Executive Director of the Makati Business Club from 1987 to 2006, after joining its staff in 1983. While at MBC, he concurrently served as executive director of Philippines-United States Business Council, Philippine-British Business Council, Philippines-France Business Council, Philippines-Singapore Business Council, and Philippines-Malaysia Business Council. Mr. Luz was the Secretary-General of NAMFREL from 1992 to 2006, overseeing preparations for its Operation Quick Count and pollwatching in the 1992, 1995, 1998, 2001, and 2004 elections.
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Directory
Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. A. Mabini St. cor. P. Ocampo St., Malate Manila Telephone Number: (632) 708-7206 Fax Number: (632) 708-7209 Department of Finance Secretary Cesar V. Purisima 6th Floor, Department of Finance Building, Roxas Boulevard, Manila Telephone Number: (632) 523-9215 / 523-9219 Fax Number: (632) 526-8474 National Economic and Development Authority Director-General Arsenio M. Balisacan 12 Jose Maria Blessed Escriva Drive, Ortigas Center, Pasig City Telephone Number: (632) 631-3716 / 3747 Fax Number: (632) 631-3747 Department of Budget and Management Secretary Florencio B. Abad General Solano Street, San Miguel, Manila Telephone Number: (632) 735-4926 / 735-4929 Fax Number: (632) 735-1955 Department of Trade and Industry Secretary Gregory L. Domingo Industry and Investments Bldg., Senator Gil Puyat Ave., Makati City Telephone Number: (632) 890-9333 / 896-1166 Fax Number: (632) 899-5518 Department of Public Works and Highways Secretary Rogelio L. Singson Bonifacio Drive, Port Area, Manila Telephone Number: (632) 304-3300 Fax Number: (632) 304-3020
Department of Energy Secretary Jose Rene D. Almendras Energy Center, Merritt Road, Fort Bonifacio, Taguig City Telephone Number: (632) 840-2008 Fax Number: (632) 812-6194 Department of Agriculture Secretary Proceso J. Alcala 4/F, DA Annex Bldg. Diliman, Quezon City Telephone Number: (632) 920-3986 / 920-2223 Fax Number: (632) 926-6426 Department of Tourism Secretary Ramon R. Jimenez, Jr. Department of Tourism Building, T.M. Kalaw Street, Manila Telephone Number: (632) 523-8411 Fax Number: (632) 521-7374 Department of Transportation and Communications Secretary Joseph Emilio Abaya The Columbia Tower, Barangay Wack-Wack Ortigas Ave., Mandaluyong City Telephone Number: (632) 727-7109 Fax Number: (632) 726-7104 Public-Private Partnership Center Executive Director Cosette V. Canilao NEDA sa QC, EDSA, Diliman, 1103 Quezon City Telephone Number: (632) 929-4968 Fax Number: (632) 929-8593
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Investor Relations Office

Promoting Excellence in Investor Relations. Enhancing Sovereign Value
Eleven Years of Commitment to the Investor Community The effective implementation of the Governments economic program and its success depends on regular two-way dialogue between economic policy makers and the investment community. The Investor Relations Office (IRO) was established in July 2001 to strengthen the countrys relations with investors and other stakeholders by promoting active channels of information flow and dialogue between economic policy makers and investors. Based in the Philippine central bank, the Bangko Sentral ng Pilipinas (BSP), the IRO has a dedicated staff comprised of trained economists and communication specialists who work with colleagues in the BSP and the economic agencies to implement a wide-ranging program of investor relations activities. As the Government has implemented its economic reform program over the last ten years, the IROs program of investor outreach has helped to ensure that investor decisions benefit from a comprehensive understanding of the progress in reforms and what they mean for the economic fundamentals of the Philippines. In turn, the Governments economic reform program has made the economy relatively more resilient amid the global financial and economic crisis. With stable macroeconomic fundamentals, the Philippines remains as one of the most viable economies for investments in the emerging market. The IRO is proud to have played a role in communicating the successes of the Governments reform program in the last eleven years and is committed to continuing its efforts to promote the Philippine economy.
Serving Our Stakeholders in the Philippines and Internationally The IRO provides services to a wide range of stakeholders the Governments economic agencies, financial institutions, credit rating agencies, bilateral and multilateral organizations, domestic and foreign investors, the diplomatic corps, business people, the media and the general public. All services to its stakeholders are underpinned by a set of fundamental principles: transparency, accessibility, timeliness, consistency and feedback. The IRO adopts a multi-pronged approach to serving its stakeholders through: Dissemination of key economic and financial information about economic policy objectives and performance Seeking market feedback on current and proposed policy measures Providing feedback to economic policy-makers about investor sentiment Facilitating candid and constructive dialogue between policymakers and investors
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Investor Relations Office

Promoting Excellence in Investor Relations. Enhancing Sovereign Value
The IRO undertakes a range of initiatives to build awareness among domestic and international investment audiences around the Governments economic reform program, promote specific investment opportunities in the Philippines and facilitate information exchange and dialogue between key economic policy decision-makers in the Government and domestic/international investors. These initiatives include: Regular Economic Briefings to update the business community, media and industry organizations on the countrys economic performance Investor Roadshows to bring the Governments resilient economic performance record, commitment to sound economic management and responsible reform to members of the international financial community Media Briefings to raise awareness of the Governments progress in economic reforms and plans for ongoing reforms Government Policy Roadshows to increase the business communitys understanding of government policy measures to generate support for the policy implementation process Publications to inform policy-makers about market developments and sentiment E-mail service to keep investors and other investors abreast of data releases on a regular basis An English Language website, www.iro.ph, to provide a wide range of easily accessible information about the Philippines economic performance and the governments economic policies. The website serves as a warehouse of valuable information such as economic briefing presentations, press releases and economic and statistical data.
Contact Information
For further information about the Investor Relations Office, or about the Philippine economy, please contact: Claro P. Fernandez Investor Relations Office Bangko Sentral ng Pilipinas A. Mabini St. cor. P. Ocampo St. Malate Manila, Philippines 1004 Tel: (632) 708-7487 / (632) 336-7124 Email: FernandezCP@bsp.gov.ph Fax: (632) 708-7489 77 Website: www.iro.ph
The Republic of the Philippines
Good Governance is Good Economics
September 2012

Good Governance Is Good Economics

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The Republic of the Philippines

Good Governance is Good Economics

The Philippines: Pushing Forward on All Fronts

The Presidents Social Contract with the Filipino People

The Presidents Social Contract with the Filipino People

Critical Interventions to Achieve Inclusive Growth

Structural and Other Developmental Reforms and Programs

2005: Passage of Expanded Value-Added Tax Law (EVAT)

1995: Liberalization of telecommunications industry

2001: Liberalization of the power sector (EPIRA)

2005: Passage of Securitization Act

1993: Creation of the Bangko Sentral ng Pilipinas

1998: Deregulation of the oil industry

2003: Passage of Special Purpose Vehicle Act

2007: Implementation of riskbased bank supervision

2009: Passage of Tourism Act

1997: Privatization of water services

2002: Adoption of inflation targeting framework

2004: Passage of Government Procurement Reform Act

2008: Passage of Renewable Energy Act

1994: Liberalization of foreign bank entity

2000: Passage of General Banking Law and Phil. E-Commerce Act

2004: Adoption of Basel 2

2006: Establishment of the Wholesale Electricity Spot Market (WESM)

Structural and Other Developmental Reforms and Programs

2011: Passage of the Government-Ownedand-Controlled Corporations (GOCCs) Governance Act of 2011

2010: Launched PPP Program

2012: Program Budgeting Approach

2010: Set up the Debt Management Office at the Department of Finance

2011: BOC National Single Window

2012: Launched Food Staples Sufficiency Program 7

The Philippines: Pushing Forward on All Fronts

Sustained Economic Growth Effective Monetary Policy Strong External Position

GDP Inflation GIR

3.9% 4.6% US$75.3bn PhP197.8bn (2.0% of GDP) 2.9%

Prudent Fiscal Management Sound Banking System

Fiscal Deficit Nonperforming Loans1 PSEI

Positive Investor Sentiment Growing Third-Party Recognition

Positive Credit Rating Actions

Philippines Sustains Robust GDP Growth

Source: National Statistical Coordination Board

Philippines Sustains Robust GDP Growth

A Decade of Robust and Sustained Economic Growth is Set to Continue

Unemployment Rate (%)

8% 7% 6% 5.0 5% 4% 3% 2% 1.1 1% 0% 2.9 3.6 5.2 4.8 4.2 6.7 6.6

7.6 7.0 6.1 6.0

Source: National Statistical Coordination Board

Fiscal Consolidation on Track

1,800 1,600 1,400 3.7% 1,200

1,522 1,208 3.7%

1,000 3.5% 800

Proactive Liability Management

12 Source: Department of Finance

Proactive Liability Management

9.8% 65.2% 79.5%

20.5% Jan-Jul 2012

Proactive Liability Management

100% 80% 60% 40% 20% 0% 2003

Medium-term-Beyond 1 year but less than 10 years

Sound and Stable Inflation Environment Promotes Inclusive Growth

Inflation Rate (%)

Global inflationary cycle

Upper Bound 5% Aug 2012: 3.8% Lower Bound 3%