9 October 2020, As delivered
Acknowledgments.
Ladies and gentlemen, magandang araw po sa inyong lahat.
This is a presentation ng DTI pagdating sa ongoing pandemic, which as you know tayo po ay nagmo-move na from a very strict lockdown to easing of community quarantine in many places as we start to rebuild the country.
Ang ating REBUILD, we define as Revitalizing Businesses, Investments, Livelihoods and bringing back Domestic Demand. In a way, we are balancing health and economy. It’s no longer health or economy, but balancing health and economy.
Ang maganda po bago nagka-pandemic, the Philippines has very strong economic fundamentals to address the pandemic. This can be seen through series of charts that the economy is growing 5.3x since year 2000 and 1.4x since 2015. We reached the level of Php 19.5T and a GDP per capita of US $3,464.
Our growth rate has been really hovering at 6.9 to even 7.5%. Ang average po ay 6.6% over the many quarters. Ito lang po ‘yung start of the Duterte Administration and we were able to achieve these through series of trade and investment reforms, tax reforms, ‘yung huli po natin Rice Tarrification Law and Build,Build,Build. Lahat po ‘yan pag pinagsama-sama and all the other reforms and programs that we’re doing was really giving a big push to our economy. So, we had a good momentum.
Even unemployment rate we reached a very low level of 4.5%. Over the years, ito po ang isa sa pinakamababang unemployment rate and we realized this last year of 2019.
Inflation rate after the October 2018 mataas, nag-peak ang inflation because of world oil prices, we continue to manage already a very stable inflation rate. Now averaging 2.5% and even during the pandemic ngayong 2020, we’re still hitting a level of 2.1% to 2.5% range.
Even the BOI-Approved Investments, maganda po ang ating performance. We’ve been hitting record level from 2016, 2017, 2018 and 2019. Php 617B noong 2017, Php 915B noong 2018 and a record level of Php 1.14T. For the first time umabot ng trillion pesos level ang ating mga investments – approved investments po ito ng Board of Investments. Lumalaki dito ‘yung part ng foreign investments, as you can see 223% growth from previous years figure.
However, nagkaroon nga tayo ng emergency because of the Covid-19 pandemic. Because of the lockdown that we were doing and thanks to our local government ‘yung
inyong strict implementation, through enforcement of tracing, isolation, testing and treatment, ‘yung paggawa ng granular lockdowns and enforcement of the minimum health standards sa ating mga kababayan, facemask, face shield, distancing, handwashing etc. ay talagang nakatulong sa continuous na pagbaba. Many of you are already in Modified GCQ, it’s just that Metro Manila and some urban areas are just in the GCQ level but for many parts of the country, it’s Modified GCQ. It’s more than half already of the entire country when it comes to economic contribution.
Over the months we’ve seen how we’ve moved many the parts of our country from ECQ,
Modified ECQ, GCQ and in many areas at least ay MGCQ. It shows that basically the percentage of sector per community quarantine ilan ang na o-open from 50% sa ECQ to 75% of the economy and 95% ‘pag dating sa GCQ. There are still some limitations as we’re hearing right now ‘yung limitations pa din ng ibang sectors and hindi pa na open or some sectors not allowed in GCQ, ay at least napapabuksan natin unti-unti under MGCQ.
As we are opening up, we saw the bad contraction level that we hit because of the community lockdowns. So ‘yung mataas na about 6.7% economic growth rate GDP growth ay bumagsak na noong 1st quarter ng -0.7% at -16.5% noong 2nd quarter. But we are expecting a slight recovery already for this 3rd quarter. So, we’re awaiting result.
But we can see some recovery already. In the exports sector, Philippines has been posting positive growth in export in 2019 even entering to 2020 noong January at February you can see there 9.4%, 2.8% respectively for this year. Until tumama ang pandemic and nag-lockdown, it affected the export sector it went down to as low as -49% halos 50% declined but on the following months nag-umpisa na ‘yung recovery -26%, -12% now -9.6%. Hopefully we can bounce back and register positive grow in exports in the months and quarters to come.
Unemployment rate we saw ‘yung mababa natin na 4.5%, 5.3% biglang nag-shoot up to 17.7% but again because of the easing of community quarantine and re-opening, the 17.7% went down already to 10%. We’re expecting na bababa na sa single digit. Ang target natin ay makabalik muli sa 5% level, if not this year-end kahit po by 1st quarter next year.
The good thing also on the Manufacturing Index, ito po ‘yung level ng mga manufacturing activities any number above 50 is a growth and any number below would be a contraction. Prior to the pandemic we’ve been hitting a range of 51 to 54 level of PMI (or Purchasing Managers’ Index), but bumagsak ito 39.7 bumagsak pa further to 31.6 level, pero in the easing again or reopening, umakyat na ulit to 40 to 48 and the last index last week reported 50.1. Again, we’re back to at least almost break even and a slight growth. So we’re seeing recovery in all these other indicators, nag-iimprove over the months.
The way forward for us is there will be another presentation what we’re doing right now as we open but I will be presenting the strategic plan as we try to REBUILD, the Business Investments, Livelihood, and Domestic Demand. Ang overall objective is to build back better. This is to staying the course na gusto po ng ating Pangulo na magkaroon tayo ng better future sa ating mga kababayan – for Filipinos to have a modern, dynamic and responsible Philippines. Pagdating po sa DTI our aim is still to continue to modernize and integrate ‘yung industrial capacity natin, hindi lang finished goods, hindi lang basic goods but all the parts of the value chain, to integrate high-value products and service in the global value chains.
In other words, as we export, let’s say semi-conductors, we know we just do certain parts and stage of the semi-conductor but we want to increase that value of that part by putting in more design, more value-adding on the parts that we do.
And to contribute also to all social economic developments, all these trade and industry programs that we’re doing should contribute to better infra, health and also poverty alleviation, we generate employment and we protect the environment.
Mga goals natin we want to improve our domestic capacity maraming manufacturing dito, kaya pinu-push natin ‘yung Buy Local Go! Lokal. We do the manufacturing here, so we reduce the trade deficit. We reduce the imports and we create the capacity to be able to export. Increase value creation. Increase forward and backward linkages, in other words, all stages ng ating industry ay mayroon pong gumagawa, may nag-mamanufacture. And of course, to modernize Philippine Industries.
Very important right now, is to revive the economy we must have this economic stimulus to keep jobs and income. What does this mean? It’s important we support these companies, companies that will keep the jobs and the income, income that will create the demand, demand that will entice/attract the companies to produce more; so parang virtuous cycle na siya. This is the way to really re-stimulate and revive the economy. So very important po itong first packs. This tells us na important magkaroon ng support.
We immediately used ‘yung maliit na pondo ng Small Business Corp. Php 1B ito po ay budgeted sa SB Corp. para gawing pautang working capital loans sa mga Micro SMEs. Mayroon din pong program ang DTI about Livelihood Seeding Program about Php 200M very small, but hopefully this is what we would like to increase budget towards 2021. Thankfully, the Bayanihan II has included a Php 10B funding for the Small Business Corporation, to allow us to continue the Php 1B. Na replenish po ‘yan under Bayanihan II but Php 6B of this towards the tourism sector, it was identified during the bicam. Php 6B through DOT, but for Micro SMEs as well. The Php 4B will be for the micro SMEs in general and this will be lent out by SB Corp. nationwide.
It’s important na mayroon pa din tayong non-financial support. Ito ‘yung mga entrepreneurship training that we do almost every day. Ngayon from physical naging virtual webinars online. Transforming business models, nagtuturo po tayo ng mga e-commerce sa mga SMEs, so that ‘yung business model nila madala sa digital. Mga financial advisory through our Negosyo Centers din at mga business counselors and mentoring sessions that we have. We continue to inject innovation, upskilling and reskilling with the help of Tesda. With the DOLE, ‘yung flexible work arrangements are still being done and will be extended. And the hiring of workers for micro lending, para rin makatulong sa employment generation at the same time make faster ‘yung processing ng mga loans.
We have this simple model na CIGXM – consumer, investment, government expenditure, exports, imports. Nabanggit natin ‘yung economic stimulus, kasama na rin diyan ‘yung pag-improve ng market that stimulate demand promoting Buy Local! Go Lokal!. Meron po tayong One Town, One Product sa inyo pong mga lugar.
The Go Lokal! is the store that we have in the malls that carry all your products, mga micro SME products and also OTOP stores. We are trying to make arrangements also
na ‘pag mga government procurement, we hope na mayroon tayong domestic preference and under Bayanihan II magkaron po tayo ng domestic preference especially sa mga procurement. ‘Yun po ang magandang napasok sa Bayanihan II.
Increasing accessibility to markets through online platforms. To increase consumer confidence and we’re trying to make businesses COVID-proof. We have extended the incentive to tourism resorts na mag-iinnovate ng kanilang resorts para maging COVID-proof. In other words, mga no-touch switches or ‘yung iba pang mga gamit sa insides ng hotels para maging COVID-proof, tulad ng dividers, barriers.
Sa investments naman po, very important that we continue the structural reforms that we are saying. Ito po ‘yung mga CREATE—na magpapababa ng income tax rate from 30% to 25% immediately and further down to 20% in five years—Retail Trade Act, Public Service Act are all reforms that can encourage more foreign investors into the country. Structural reforms, importante po doon and of course the Build, Build, Build program. We will promote intellectual property generation and commercialization. Even to SMEs para ‘yung mga naimbento nila maprotektahan nila at hindi sila magaya kapag lumaki na sila. Implement policies on rural development, supporting also the program of Senator Bong Go, Balik Probinsiya. This has something to do with providing incentives ‘yung ating BOI system kapag ang investment ay outside Metro Manila, may mas dagdag na incentive po iyon, so it will encourage more manufacturing, hopefully more projects outside Metro Manila and then of course more jobs to be created outside.
Sa government, the Build, Build, Build project is one prime activity na may multiplier effect sa economy. For every job created, there is a Multiplier effect also to other sectors as well as the funds that go there that will circulate to the economy, aside from job generation.
On the medical field, ‘yung bill na proposed ni Senator Gordon to implement the strategic stockpiling. We hope to have this kind of system, para ‘pag may next pandemic mayroon na tayong big supply ng mga medical equipment and devices.
On exports, we’ll continue to build on more free trade agreements para dumami ‘yung market na pwedeng bentahan na exporters sa inyong mga lugar. As long as we have more free trade agreements, tulad po we have in Asean. We are also now making Asean+5 countries to form a free trade agreement, para ‘yung mga produkto we sold zero-duty pagpasok sa ibang countries. We also enjoyed GSP, Generalized System of Preference sa US at sa EU, para ‘yung ating mga produkto na 6,274 products entering market, will be zero-duty. Ang maganda po sa mga ganito, it can encourage foreign investors to locate in the Philippines. Kasi pag dito sila mag manufacture, makaka-benefit sila doon sa pag-export nito. Zero duty sa ibang countries. Ngayon we’re still working also FTAs with the Korea, we’re talking to India also. Hopefully, we can enhance further ‘yung economic cooperation with India, to go into bilateral trade arrangement. We’re also talking to Canada. We have right now an FTA with Japan as well and the EFTA countries outside the EU. We’ll continue with the trade promotion, para ma-promote ‘yung ating mga produkto and deepen ‘yung integration sa global value chains.
For electronics, all the countries around the region were all part of the value chain. Stage by stage lang ‘yung ginagawa pagdating sa electronics, so lahat po trying to improve ‘yung portion nila to increase the value of the respective parts. We are also doing the same. Right now even in aerospace parts, we are doing it in Batangas and we are doing
more designs now in higher value aerospace parts, so very technical and very hi-tech. We also do optical image stabilizer in the Philippines and we have the one of the biggest Japanese companies doing that, employing 20,000 to 30,000, creating jobs for Filipino.
In imports, we secure to maintain the standard enforcement, ensuring high quality products. So dito dumadaan naman ‘yung mga testing ng mga produkto to ensure that they are standard compliant. Isa rin po ito para proteksyon sa ating mga consumers, keeping consumers’ safety. As we do this, we also protect ‘yung local manufacturers natin against substandard and cheap imports. Ito po ‘yung isang simpleng proteksyon din for them.
Kung pinag-usapan natin ‘yung demand side, ito naman po ‘yung supply side kung saan gusto natin ma-increase ‘yung production capacity locally para tayo ay magkaroon ng capacity to export. Kasi mahirap din ‘yung benta tayo ng benta sa labas tapos wala pala tayong capacity dito so very important talagang ma-create ‘yung manufacturing capacity natin dito, encourage more manufacturers to build here so that we have a capacity when there is a demand for exports.
This shows here the different types of industries that we’re trying to attract and do here. So, we have innovation, digital transformation, and all these things that we have to do when we promote domestic capacity, production capacity to capture local and foreign demand.
This chart shows ano pong mga pinaprioritize nating mga sectors and this cuts across Agriculture, Industry, and Services pero on the horizontal, it will tell us ano ‘yung mga basic necessities, ano ‘yung mga pang-4th IR natin, ano ‘yung mga pang-supply chain gaps natin. So naka-matrix po ito, these are the priority areas where we are trying to attract investments and improve capacity para sa local demand pati sa foreign demand.
In developing a modern Philippines, mayroon po tayong entry sa Agriculture, Industry and Services. Para alam po natin ano-ano ang mga industriyang mga pini-promote natin. It’s a combination of basic and hi-tech, mga high value job generating.
Right now our country, we are a net importer pagdating sa goods and products. ‘Pag dating sa services, we are a net exporter. In other words, we export more services. Itong mga creative content, like film development, software development, gaming and graphics, we do a lot of these creative contents and we will be giving support to these sectors kasi high-value po ito. It’s practically the entire content, high value. We are one of the biggest IT-BPM service providers in the world. This is one strength that we will try to continue moving forward and tourism, definitely. Right now, hopefully we are able to start ‘yung mga tourism sa inyong mga lugar. We know na ito po talaga ang pinaka-naapektuhan. Kaya po doon sa Php 10B ang nabanggit natin kanina, Php 6B doon ang nasa tourism. So hopefully, makatulong ito sa pagrevive ng tourism sector.
DTI, together with ULAP, sa lahat po ng local partners, magsama-sama po tayo so that we can heal as one and we can also recover as one. At matulungan natin ang ating Presidente Rodrigo Roa Duterte, in achieving on giving a comfortable life para po sa ating mga kababayan.
Maraming salamat po at magandang hapon sa inyong lahat.♦
Date of Release: 14 October 2020