! I.

1Executive1Summary1 & One& year& after& the& December& 2010& release& of& Arangkada( Philippines( 2010:( A( Business( Perspective,& the& 471& recommendations& in& the& document& were& assessed& by& nearly& 50& private& sector& experts& and& released& during& the& first& annual& Arangkada& Philippines& Forum& with& the& theme& Moving( Twice( as( Fast& on& January& 26,& 2012.& Details& of& the& 131Wpage& first& annual& Arangkada( Philippines& Anniversary& Assessment& and& the& recommendations& of& speakers& and& panelists&at&the&Forum&are&contained&in&this&report.1& The1 Arangkada( Philippines( Assessment1 concluded1 that1 55%1 of1 the1 4711 recommendations1 made1progress1during12011,1while145%1did1not.1(see&Part&II&and&Annex&A)1 1 Experts& used& a& subjective& 6& star& evaluation& measurement.& Results& showed& 13& recommendations&were&no&longer&relevant,&50&had&moved&backwards/&regressed,&158&were&not& ongoing/started,& 207& were& ongoing/started,& 36& had& made& substantial& progress,& and& 7& were& implemented.& AmCham& President& Jennings& told& the& Forum& we& expect& 2012& to& be& a& year& in& which&fundamentals&are&strengthened&and&built&on&and&will&result&in&higher&levels&of&investment& and& growth.& We& believe& our& common& goal& is& to& increase& the& 55%& factor& and& reduce& the& 45%& factor& so& that& next& year& we& can& target65%& started& or& completed& and& 35%& not& started,& or& even&better.& Part1 1:1 Growing1 Too1 Slow& analyzed& historic& trends& in& economic& growth,& investment,& remittances,& and& poverty.& GDP,& investment,& and& export& performance& in& 2011& were& disappointing.&GDP&growth&fell&50%&from&2010,&which&was&the&highest&in&3&decades.&Net&FDI&of& $1.26&billion&was&weak,&although&IPA&approvals&grew&substantially,&especially&in&the&last&months& of&2011,&indicating&very&probable&higher&levels&of&investment&in&2012.2&With&exports&falling&5%& and&public&sector&spending&restrained,&economic&growth&remained&largely&remittanceWdriven.&&& Part1 2:1 Becoming1 More1 Competitive& tracks& 15& global& ratings.& The& three& recommendations& of& Arangkada& were& assessed& as& having& made& substantial& progress& due& to& the& efforts& of& the& revitalized&NCC.&The&NCC&is&working&with&the&private&and&public&sectors&in&11&Working&Groups&at& the&national&level&and&has&announced&a&plan&to&organize&publicWprivate&Competitive&Councils&at& the& regional& and& lower& local& levels& during& 2012.& Moving& ahead& with& these& councils& and& committing&to&a&longWterm&plan&along&the&lines&of&Indonesia&and&Malaysia&are&LHFs3&for&2012.& & & & Part1 3:1 Seven1 Big1 Winner1 Sectors& found& 54%& (146)& of& recommendations& were& progressing& of& which&6&were&accomplished,&while&less&than&46%&(125)&were&not&underway&of&which&8%&(24)&had& regressed.&& !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
& The& Arangkada& website& www.arangkadaphilippines.com& allows& visitors& to& download& the& Arangkada& report,& and& the& Arangkada& assessment,& the& texts& and& videos& of& all& speeches& and& panel& discussions,& as& well& as& ebooks& for& the& report& and& assessment.& 2 &&Another&positive&indicator&of&prospective&rising&foreign&investment&inflows&for&2012&was&that&net&FDI&was&below&$800&million& in&the&first&11&months&of&2011&and&jumped&to&an&annual&total&of&$1.26&billion&with&the&December&2011&inflow&being&some&50%&of& the&previous&11&months.& 3 &&LHF&&lowWhanging&fruit.&A&reform&that&should&be&possible&to&achieve&in&2012.&
1

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! Six1 subparts1 of1 Part1 31 had1 50%1 or1 more1 recommendations1 progressing:& Agribusiness,& BPO,& Airports,&Water,&Manufacturing,&and&Tourism,&Medical&Travel,&and&Retirement.& & Agribusiness1 & 14& recommendations& for& this& sector& have& started& while& 4& have& not.& There& has& been&a&lack&of&progress&on&legislation.&A&considerable&increase&in&public&spending&on&agriculture,& including& irrigation,& is& reportedly& underway.& Progress& in& 2012& on& planned& irrigation,& farmWtoW market,&and&postWharvest&facilities&is&a&LHF.&& & BPO1&16&recommendations&have&advanced&while&11&have&not.&Much&progress&was&made&in&this& fastWgrowing&sector,&particularly&on&legislation&(Cybercrime,&Date&Privacy,&DICT,&and&Night&Work& for& Women).& LGU& interference& can& be& a& problem.& LHFs& for& 2012& include& enactment& of& the& Cybercrime,&Data&Privacy,&and&DICT&bills&and&wider&adoption&of&industry&curriculum&and&testing& recommendations&in&tertiary&and&secondary&education.&&& & Infrastructure:1 Airports& & 10& of& 15& recommendations& have& started.& Solutions& to& the& many& challenges&in&aviation&are&underway,&although&slowed&by&the&midW2011&change&of&leadership&at& DOTC.&Progress&was&made&in&2011&in&approval&of&the&two&pocket&open&skies&EOs4,&resolving&the& legal& issues& concerning& NAIA& TW3,& and& NEDA& approval& of& an& upgrade& of& the& Puerto& Princesa& airport&with&Korean&ODA.&There&are&many&LHFs1for&2012:&full&opening&of&NAIA&TW3,&facelift&of&TW1,& increasing& the& peak& events& rate& at& NAIA,& expanding& the& Clark& LCC& terminal,& initiating& airport& improvements&in&Bicol,&Bohol,&Cebu,&Palawan,&implementing&CNS/ATM,&moving&closer&to&a&FAA& category&upgrade,&passing&legislation&to&end&CCT/GPB,&and&implementing&CIQ&reform.& &&& Infrastructure:1 Water1 & 6& of& 9& recommendations& have& started.& A& LHF& for& 2012& is& for& GPH& to& issue&its&comprehensive&water&policy&and&begin&its&implementation.& & Manufacturing& & Some& progress& took& place;& there& was& little& regression.& Nine& of& 17& recommendations&have&started.&The&GPH&has&become&more&interested&in&supporting&the&sector.& The& twoWtiered& wage& system& and& extension& of& special& power& rates& for& large& exporters& were& positive&actions.&LHFs1for&2012&include&rolling&back&excessive&nonWworking&holidays,&minimizing& minimum&wage&increases,&preventing&passage&of&the&security&of&tenure&and&profit&sharing&bills,& and&ending&uncertainty&over&fiscal&incentives&policy.&& & Tourism,1Medical1Travel,1and1Retirement&&This&sector&experienced&the&most&progress&of&any&in& Part&3&with&24&recommendations&progressing&and&only&8&not&started.&Along&with&BPO,&this&sector& has& the& strongest& support& of& the& Aquino& Administration,& which& rapidly& developed& a& sound& National&Tourism&Plan.&The&new&secretary&built&on&the&work&of&his&predecessor.&LHFs1for&2012& include& elimination& of& CCT/GPB,& GPH& implementation& of& CIQ& reform,& visa& facilitation& reform,& continuation& of& infrastructure& improvement& at& key& tourism& destinations& outside& Manila,& and& international&promotion.&&&& & !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
4

&EOs&28&and&29&signed&March&14,&2011.&

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! Eight1 subparts1 of1 Part1 31 had1 50%1 or1 more1 recommendations1 not1 progressing1 or1 regressing:& Creative&Industries,&Infrastructure&Policy,&Power,&Roads&and&Rail,&Seaports,&Telecommunications& and&Information,&Logistics,&and&Mining.&& & Creative1 Industries& & Only& 5& of& 16& recommendations& have& started.& While& there& was& no& significant& regression,& this& is& an& industry& not& yet& receiving& enough& support& to& grow& faster.& Passage&of&the&Philippine&Design&Competitiveness&Act&is&a&LHF&for&2012.& & Infrastructure1 Policy& & About& half& of& the& recommendations& started& and& half& had& not& in& 2011.& There&was&good&progress&on&budget&reform&and&transparency,&policy&to&solicit&bids&for&PPP,&and& availability& of& TA& for& PPP.& Reform& of& lump& sum& budgets& is& a& major& accomplishment.& BOT& amendments& are& stalled& in& Congress,& and& bureaucrats& delayed& approval& of& the& BOT& IRR& amendments.&A&LHF&for&2012&is&the&IRRs.&GPH&underspending&on&infrastructure&in&2011,&which& slowed&GDP&growth,&should&be&reversed&in&2012.&& & Infrastructure:1Power1&9&of&19&recommendations&moved&forward&in&2011.&RE&policy&for&solar,& wind,&and&foreign&ownership&remains&uncertain.&The&power&mix&in&the&Mindanao&grid&remains& too& dependent& on& hydro.& Energy& efficiency& legislation& is& not& moving& in& Congress.& Initiation& of& Open&Access&is&a&LHF&for&2012.&& & Infrastructure:1 Roads1 and1 Rail& & Only& 4& of& 9& recommendations& moved& forward.& There& was& progress&at&DPWH&in&its&policy&to&upgrade&national&roads;&the&SCTEX&north&extension&is&under& construction,&and&JBIC&will&fund&the&NLEX&east&extension.&Although&the&small&Daang&Hari&award& marked&the&first&successful&PPP&bidding,&no&major&road&and&rail&projects&were&bid&out&in&2011,& and& road& traffic& in& Metro& Manila& worsened.& LHF& reforms& in& 2012& would& be& to& bid& out& NAIA& skyway&Phase&II,&move&forward&one&if&not&both&Manila&Skyway&extension&proposals,&advance&the& provincial& intermodal& bus& terminals,& give& final& approval& to& MRTW7,& bid& out& and& award& LRTW1& south& extension& and& LRTW2& east& extension,& and& initiate& completion& of& the& STAR& highway& to& Batangas&Port.&&&&&& & Infrastructure:1 Seaports1 & Only& 6& of& 20& recommendations& progressed& in& 2011.& While& little& regressed,& also& little& progressed.& Recommendations& for& seaports& made& the& least& progress& for& any&Seven&Big&Winners&subsector.&LHFs&for&2012&would&be&to&enable&sustainable&feeder&service& to& Batangas,& end& expansion& of& Manila& Port& international& container& capacity& after& Berth& 6& is& completed,&adopt&chaWRO,&and&lower&arrastre&and&other&port&charges.& & Infrastructure:1 Telecommunications1 and1 Information1 Technology& & Only& 4& of& 11& recommendations& moved& ahead& in& 2011.& The& DICT& bill& passed& the& House;& but& the& telecommunications& reform& bill& is& not& moving.& Transfer& of& CICT& to& DOST& took& industry& stakeholders&by&surprise,&just&after&the&Philippine&Digital&Strategy&was&launched.&The&Philippines& fell&10&places&in&the&UN&eWgovernance&rankings.&LHFs&for&2012&are&enactment&of&the&DICT&bill&and& a&stronger&policy&to&expand&and&speed&up&broadband&service.&& &

3&

! Logistics1 & About& 50%& of& 22& recommendations& have& started,& while& 50%& have& not.& Efforts& to& begin& decongestion& of& Manila& Port& increased,& and& the& BOC& issued& its& first& LOA& for& deconsolidation.&A&series&of&meetings&of&PEZA&and&PPA&with&exporters&in&Batangas&built&support& for& feeder& service& at& Batangas& Port.& & LHFs& in& 2012& are& sustaining& MCC& feeder& service& to& Batangas,&issuing&a&CAO&for&transshipment,&CIQ&reform,&increased&antiWsmuggling&actions,&and& passing&the&CMTA&bill&in&the&Senate.&&&& & Mining1&Half&of&the&32&recommendations&have&started,&while&half&have&not.&The&House&passed& the& bill& to& share& mining& royalties& directly& with& LGUs,& but& the& Senate& has& not& moved& the& bill.& Mining&bans&by&LGUs&and&in&Congress&increased;&the&president&initiated&a&Mining&Policy&Review.& LHFs&in&2012&are&to&pass&the&National&Wealth&Tax&sharing&bill&and&ensure&the&outcome&of&the& mining&policy&review&enables&responsible&mining&while&better&regulating&smallWscale&mining.&& & Part14:1General1Business1Environment&found&55%&(96)&of&recommendations&were&progressing& of&which&1&was&accomplished,&while&less&than&45%&(80)&were&underway&of&which&15%&(26)&had& regressed.& & Nine1 subparts1 of1 Part1 41 had1 50%1 or1 more1 recommendations1 progressing:& Environment& and& Natural& Disasters,& Governance,& Labor,& Legislation,& Local& Government,& and& Social& Services:& Health&and&Population.& & Environment1and1Natural1Disasters&&9&recommendations&are&moving&forward&while&8&are&not.& Implementation& of& the& Clean& Air,& Clean& Water,& and& Solid& Waste& acts& is& weak.& Reforestation& is& supported.&Hazard&maps&are&being&distributed&nationwide.&&There&are&no&LHF&for&2012.1 & Governance1 & With& 11& of& 16& recommendations& started,& Governance& is& one& of& the& most& progressing& groups.& The& Aquino& Administration& is& demonstrating& political& will& and& introducing& reforms&to&reduce&corruption;&it&supports&the&Integrity&Initiative,&which&15&cabinet&secretaries& have& signed.& Reforms& are& underway& at& COA,& DOJ,& Ombudsman,& and& Sandiganbayan& that& will& improve& enforcement.& Public& spending& is& becoming& less& corrupt& and& more& transparent.& Implementation&of&the&new&GOCC&Act&has&started.&LHFs1for&2012&include&expanding&the&Integrity& Initiative,&successful&prosecution&of&RATS&and&RATES&cases,&and&passage&of&AMLA&Amendments,& and&the&Whistleblowers&Protection&Act.&&&& & Judicial1&50%&of&the&12&recommendations&progressed&in&2011.&The&most&substantial&progress& was& made& by& greater& use& of& ADR& and& arbitration& to& resolve& civil& disputes& outside& of& courts.& Improvements& in& leadership& at& the& Ombudsman& and& Sandiganbayan& should& improve& their& effectiveness.&A&Writ&of&Kalikasan&against&mining&in&the&Zamboanga&Peninsula&was&a&backward& step.& LHFs& for& 2012& include& continued& improvements& of& the& Ombudsman& and& Sandiganbayan& and&improved&antiWsmuggling&legal&actions&by&the&BOC.&&&&& & Labor&&With&6&of&9&recommendations&started,&Labor&is&one&of&the&groups&with&good&progress,& with& Labor& Code& reform& initiatives,& continued& industrial& peace,& adoption& of& TwoWTiered& Wage& System,&and&better&matching&of&education&and&the&skills&industry&needs.&Excessive&nonWworking& !
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! holidays& remain& a& problem.& LHFs1 for& 2012& include& working& with& DOLE& to& oppose& new& nonW working& holidays& and& to& attenuate& labor& policies& that& may& weaken& the& interest& of& foreign& investors&considering&the&Philippines&as&they&relocate&operations&within&Asia.&&&& & Legislation& & With& 10& of& 16& recommendations& started,& Legislation& is& one& of& the& groups& that& progressed&in&2012.&Although&LEDAC&met&only&twice,&18&of&the&36&LEDAC&priority&measures&are& business&and&economic&reforms.&Many&passed&the&House&but&are&moving&slowly&in&the&Senate.& Work&on&a&new&Criminal&Code&began.&LHFs&for&2012&are&mostly&having&the&Senate&pass&HouseW passed&reform&bills.&&& & Local1Government&&Also&with&10&of&16&recommendations&started,&this&group&is&progressing.&The& DILG&is&doing&well&at&LGU&capacity&building&and&reduction&in&red&tape.&But&LGUs&regressed&when& several&LGUs&declared&bans&on&openWpit&mining.&LHFs1for&2012&would&include&passage&of&the&bill& to& share& mining& royalties& directly& with& LGUs& and& a& mining& policy& that& discourages& LGUs& from& adopting&bans&on&mining.&& 1 Macroeconomic1 Policy& & Fifteen& of& 29& recommendations& were& assessed& as& having& shown& progress&in&2011.&Macroeconomic&and&public&revenue&policy&and&management&was&assessed&as& showing& solid& results.& Reimbursing& investors& for& the& longWdue& TCC& backlog& is& planned.& No& tax& evaders& were& jailed& despite& many& cases& initiated.& Tax& reform& has& not& been& initiated.& LHFs& for& 2012&include&assisting&the&private&sector&to&take&advantage&of&new&FTAs,&further&reducing&TCC& arrears,& enactment& of& the& Rationalization& of& Fiscal& Incentives& Act,& and& further& transfer& of& manual&operations&of&the&BIR&and&BOC&to&online&eWgovernance.&&&&& & Social1Services:1Health1and1Population&&With&6&of&9&recommendations&underway,&this&group& also&did&well.&The&private&sector&increased&its&support&for&RH&reforms.&Senate&debate&on&the&RH& bill&advanced,&while&the&UHC&bills&also&advanced&in&Congress.&LHFs&for&2012&are&final&passage&of& the&RH&and&UHC&bills&and&successful&bidding&of&PPP&projects&of&the&DOH.&&&& & Four1 subparts1 of1 Part1 41 had1 50%1 or1 more1 recommendations1 not1 started1 or1 regressing:& Business& Costs,& Foreign& Equity& and& Professionals,& Judicial,& Macroeconomic& Policy,& Security,& Social&Services:&Education,&and&Social&Services:&Poverty.& & & Business1 Costs& W& Only& 7& of& 16& recommendations& under& Business& Costs& have& started& and& none& has& made& substantial& progress.& Labor& and& power& costs& constrain& growth& of& many& businesses.& LHFs& for& 2012& include& implementing& the& TwoWTiered& Wage& System,& reform& of& nonWworking& holidays,& implementing& Open& Access,& NCC& organization& of& local& Competitiveness& Councils,& enactment& of& DICT& to& enhance& eWgovernance,& continued& reduction& of& red& tape,& and& better& urban&traffic&management.&&&&&& 1 Foreign1 Equity1 and1 Professionals& & Only& 5& of& 12& recommendations& progressed& in& 2011.& Congressional& leaders& for& the& first& time& supported& removal& of& constitutional& limits& on& foreign& investment.& Several& bills& on& professions& that& would& change& to& reciprocity& the& current& prohibitions& on& foreigners& practicing& certain& professions& advanced& in& Congress.& However,& !
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! changes&in&the&FINL&regressed&when&NEDA&opposed&JFC&recommendations&on&FINL&provisions&on& professions&and&horizontal&condominium&ownership.&Other&than&passage&of&the&Environmental& Plan&Act&amendments,&there&are&no&LHFs&for&2012&(so&long&as&the&GPH&does&not&place&priority&on& liberalization).&&&&& & Security1 1 Only& 6& of& 15& recommendations& moved& forward& in& 2011.& President& Aquino& demonstrated& his& interest& in& peace& in& an& historic& meeting& with& MILF& leadership& in& Tokyo.& Yet& talks&with&the&MILF&(and&NDF)&went&slowly.&The&Mindanao&Development&Plan&was&completed.& Poverty&and&security&in&Mindanao&remain&deterrents&to&investment.&Human&rights&prosecutions& remain& weak.& Serious& AFP& and& police& modernization& is& not& underway,& and& gun& crimes& are& rampant.&No&LHFs.&1 & Social1 Services:1 Education1 & Only& 5& of& 12& recommendations& have& started.& A& start& has& been& made&on&increasing&the&public&education&budget&by&10W15%&per&annum&in&2011&and&2012,&on& shifting& to& the& K+12& cycle,& on& strengthening& tertiary& education,& and& expanding& technicalW vocational& education.& Too& little& is& being& done& to& improve& English.& Or& increase& foreign& participation&in&the&country.&There&are&no&LHFs.&&& & Social1 Services:1 Poverty1 & Of& the& 4& recommendations,& 2& were& started& and& 2& were& not.& Substantial&progress&was&made&on&expanding&the&CCT&program&and&a&start&on&UHC.&However,& the&incidence&of&poverty&and&hunger&is&not&being&reduced.&There&are&no&LHFs1for&2012.& 1 & From&the&foregoing&and&Annex&A,&following&are&two&selective&lists&of&37&key&business&and& economic&reforms&that&progressed&well&and&23&that&did&not&in&2011.&& & Top1reforms/1accomplishments1in12011:511 &&1.&&Philippine&Development&Plan&has&numerous&Arangkada&recommendations& &&2.&&Record&level&of&IPA&investment&approvals& &&3.&&National&Competitiveness&Council&adopted&a&sound&strategy& &&4.&&BPO&reform&laws&(4)&moved&forward&in&Congress&& &&5.&&Nightwork&Prohibition&for&Women&Repeal&Act&(RA10151)& &&6.&&BPO&curriculum&reform&progressing& &&7.&&Lump&sum&budgeting&for&infrastructure&ended& &&8.&&One&small&PPP&project&awarded& &&9.&&Puerto&Princesa&airport&improvement&project&approved& 10.&&RentWseeking&RE&contracts&reviewed&and&suspended& 11.&&RentWseeking&mining&exploration&contracts&reviewed&and&suspended&& 12.&&Consideration&ongoing&of&Extractive&Industry&Transparency&Initiative&(EITI)& 13.&&Pocket&open&skies&EOs&28&and&29&signed& 14.&&National&Tourism&Policy&developed&&&&& 15.&&Infrastructure&improvements&funded&for&priority&tourism&destinations& 16.&&Hospital&services&reform&ongoing& !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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&&Partial&list;&follows&organization&of&Arangkada,&i.e.&Part&1,&Part&2,&etc.&

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! 17.&&TwoWtiered&wage&system&adopted&by&DOLE& 18.&&Labor&disputes&minimized&& 19.&&Aquino&Administration&introducing&good&governance&reforms& 20.&&GOCC&Act&signed&(RA&10149)& 21.&&Budget&and&procurement&reforms&being&implemented& 22.&&Integrity&Pledge&signatories&reached&1,000&firms&and&senior&GPH&officials& 23.&&AntiWRed&Tape&Act&compliance&increasing& 24.&&Arrest&order&served&on&former&president&GMA&for&election&fraud& 25.&&Greater&use&of&Alternative&Dispute&Resolution& 26.&&Rule&of&law&improvements&at&COA,&Ombudsman,&and&Sandiganbayan& 27.&&Ombudsman&resigns&rather&than&face&impeachment&& 28.&&Initiative&to&reform&Criminal&Code&launched& 29.&&Some&LGUs&improving&with&assistance&of&Performance&Governance&System& 30.&&GPH&has&set&austerity&tone&for&public&officials&& 31.&&Ratings&agencies&upgraded&Philippine&debt&& 32.&&RATE&and&RATS&programs&intensified& 33.&&Increased&funds&to&eliminate&TCC&arrears&in&5&years& 34.&&Mindanao&2020&Peace&and&Development&Plan&adopted& 35.&&Preparation&for&K+12&basic&education&cycle&initiated& 36.&&CHED&bringing&more&discipline&and&curriculum&reform&to&tertiary&education& 37.&&CCT&program&expanding&to&6.9&million&families& & Main1backward1developments1in12011:1 &&1.&&GDP&growth&was&half&as&fast&as&2010& &&2.&&FDI&net&inflow&was&lower&than&2010,&but&rose&sharply&in&December& &&3.&&CICT&moved&to&DOST&without&stakeholder&consultation& &&4.&&None&of&the&10&PPP&projects&announced&by&the&GPH&in&2010&were&bid&out& &&5.&&Major&PPP&rail&projects&were&not&bid&out& &&6.&&LRTW7&light&rail&project&did&not&begin&construction& &&7.&&Major&PPP&toll&road&projects&were&not&bid&out& &&8.&&NLEXWSLEX&Skyway&project&stalled1 &&9.&&Open&Access&delayed;&power&costs&remain&very&high& 10.&&Decongestion&of&Port&of&Manila&has&not&started& 11.&&Transshipment&of&cargo&reform&blocked&by&BOC& 12.&&EWgovernance&ranking&of&country&declining& 13.&&Foreign&aviation&tax&and&CIQ&reform&moved&very&slowly& 14.&&AntiWmining&campaign&accelerated& 15.&&NonWworking&holidays&unchecked& 16.&&Ground&transport&costs&remain&high& 17.&&Foreign&investment&restrictions&unchanged& 18.&&Supreme&Court&Gamboa&decision&threatens&grandfather/control&test&rule& 19.&&Smuggling&continues&to&cause&serious&harm&to&the&economy& 20.&&Too&few&business&and&economic&reform&laws&were&enacted&& 21.&&LGUs&continue&actions&contravening&national&laws&that&hinder&FDI& !
7&

! 22.&&No&significant&progress&made&on&FTAs&with&EU&or&US&(in&TPP)& 23.&&Sendong&floods&dramatize&again&dangers&of&deforestation& 24.&&Security&and&peace&and&order&situation&did&not&improve&in&2011&&& & Recommendations.1 The& GPH,& donors,& and& the& private& sector& should& work& to& implement& as& many&as&possible&of&the&lowWhanging&fruit&discussed&above&and&elsewhere&in&this&report&and& also&consider&actions&that&can&advance&the&many&recommendations&that&are&not&yet&moving.&A& good&starting&point&is&the&50&recommendations&assessed&to&have&regressed,&as&well&as&the&larger& group&of&158&that&were&assessed&as&having&not&started.&& & & Another&source&of&recommendations&for&business&and&economic&reform&actions&in&2012& are& the& comments& of& speakers& and& panelists& made& at& the& January& 26& Arangkada& Anniversary& Forum& at& summarized& in& Part& IV& of& this& report& (pages& 26W43).& For& example,& former& Finance& Secretary& de& Ocampos& recommendation& The& continuing& central& problems& to& address& are:& infrastructure,&infrastructure,&and&infrastructure.&For&example,&NCC&CoWChair&Luzs&look&at&a& 10& to& 20Wyear& plan.& For& example,& TVI& president& Ridsdels& We& need& a& consistent,& predictable& framework& to& encourage& mining& investment.& For& example,& rail& expert& Santiagos& All& the& projects& have& beendiscussed& for& the& last& 15W10& years.& Look& at& the& ripe& ones,& implement& the& lowWlying&ones.&&& & Comments:&& & 1.&&There&are&many&officials&in&government&working&to&accomplish&reforms&for&the&Philippines&to& improve&the&investment&climate&and&lead&to&faster&economic&growth.&Better&governance&is&the& main& reform& of& the& Aquino& Administration.& At& the& same& time,& the& agencies& with& the& worst& reputations& for& corruption& in& past& years& still& have& in& their& ranks& groups& that& can& thwart& antiW corruption&policies&and&hope&to&reWemerge&strong&in&future&administrations.&&&&& & 2.& Departments& which& have& shown& considerable& progress& in& terms& of& Arangkada( recommendations& include& the& House& of& Representatives,& Department& of& Budget& and& Management,& Department& of& Education,& Department& of& Finance,& Department& of& Labor& and& Employment,& Department& of& Public& Works& and& Highway,& Department& of& Social& Welfare& and& Development,& Department& of& Tourism,& and& the& CoWChairmen& of& the& National& Competitiveness& Council.& & 3.&&Media&is&a&vital&partner&in&reform&advocacy.&The&January&26&Forum&produced&nine&newspaper& columns,& several& using& Arangkada& in& their& titles.& Through& the& media& domestic& and& foreign& business&groups&can&articulate&their&recommendations&for&improvements&that&will&lead&to&more& investments&and&jobs.&In&contrast&to&their&colleagues&in&most&SEA&publications,&Philippine&media& editors& usually& place& political& news& ahead& of& business& and& economic& reporting.& Nevertheless,& there&are&ample&outlets&in&the&business&press,&business&television&newscasts,&and&at&times&the& front& pages& of& major& broadsheets& for& advocacies& for& actions& that& will& improve& Philippine& national&competitiveness.&&&& &

8&

! The1 deterioration1 of1 the1 Philippines1 in1 global1 rankings1 appears1 to1 be1 bottoming1 out1 and1 beginning1to1improve.&& & International& competitiveness& rankings& of& the& Philippines& released& in& 2011& saw& a& potentially& significant& change& in& direction& of& several& of& the& 15& competiveness& rankings& of& the& Philippines& included& in& Part& 2& of& Arangkada.6& Of& the& 11& rankings& released& during& 2011,& 6& improved&while&5&deteriorated.7&By&comparison,&in&2010&of&13&rankings&released&6&improved&and& 7&deteriorated.&(See&Tables&1&and&2)&& & Significantly,& the& rank& of& the& Philippines& in& the& 2011& WEF1 Global1 Competitiveness1 Report&leapt&10&places&from&85th&of&139&countries&in&2010&to&75th&of&142,&its&highest&percentile& ranking&(53%)&in&a&decade.&The&improvement&in&the&TI1Corruption1Perceptions1Index&to&129th&of& 183&countries&from&134th&of&178&(a&percentile&improvement&of&5%)&was&also&a&downward&trend& reversal.&& & By&contrast,&the&slippage&in&the&IFC1Doing1Business&from&134th&of&183&to&136th&of&183& countries,8& and& the& change& in& the& IMD1 World1 Competitiveness1 Yearbook1 from& 39th& of& 58& to& 41st& of& 59& countries& are& relatively& minor& changes& in& rankings& reflecting& a& bottoming& out& and& possibly&heralding&a&trend&of&moving&upwards&in&2012,&similar&to&the&advancement&WEF&and&TI& indices.& & However,&in&each&of1these1four1widely1consulted1rankings1the1Philippines1places1dead1 last1 of1 the1 ASEAN\6& (see& Table& 3).9& In& the& 2011W2012& Country& Brand& Index,& the& Philippines& deteriorated&from&65th&of&110&to&78th&of&113&countries&and&placed&6th&of&6&among&the&ASEANW6& largest&economies.&& & Given1 these1 poor1 relative1 competiveness1 rankings,1 the1 public1 and1 private1 sectors1 should1endeavor1to1reform1Twice(as(Fast.1For1the1Philippines1to1close1the1gap1with1Indonesia1 and1Vietnam1W&the&two&ASEAN&economies&it&ranks&closest&to&W&let&alone&come&close&to&the&higher& rankings&of&Malaysia&and&Thailand&among&the&ASEANW6&W&a1greater1and1more1systematic1effort1 to1 reform1 should1 be1 undertaken.1 The& annual& National& Competitiveness& Assessment& and& the& Master&Plan&to&2020&announced&by&the&NCC&can&be&a&good&start&to&begin&to&move&the&ratings& upwards.& & 1 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
&For&2012,&Arangkada&will&add&the&FutureBrand&Country&Brand&Index&&one&of&the&indexes&the&National&Competitiveness&Council& (NCC)&uses&to&measure&the&progress&of&its&efforts.&The&other&four&are&the&Corruption&Perceptions&Index,&Doing&Business&Report,& Global&Competitiveness&Report,&and&World&Competitiveness&Yearbook.&NCCs&ambitious&goal&is&for&the&Philippines&to&place&in&the& top& third& of& these& five& rankings& by& 2016.& Arangkada& will& add& the& FutureBrand& Country& Brand& Index& to& the& other& 15& indices& covered&in&Part&2.& 7 &&Including&the&Country&Brand&Index,&the&total&would&be&6&improved&and&6&deteriorated.& 8 &The&Doing&Business&Report&does&not&cover&locators&in&the&countrys&more&than&250&PEZA&zones,&accounting&for&some&80%&of& total&Philippines&exports.&These&firms&have&repeatedly&expressed&their&high&level&of&satisfaction&in&doing&business.& 9 &&The&IMD&World&Competitiveness&Yearbook&covers&the&ASEANW5&economies&but&not&Vietnam.!!!
6

9&

! Table11:120101Competitiveness1Rankings1161Improved,171Deteriorated1 !
Survey1Title1 Best&Countries&for&Business& Failed&States&Index& Index&of&Economic&Freedom& World&Competitiveness&Yearbook& International&Property&Rights& Corruption&Perception&Index& Human&Development&Report& EWgovernance&Readiness&Survey& Doing&Business& Investing&Across&Borders& Paying&Taxes& Global&Competitiveness&Report& Global&Enabling&Trade&Report& Travel&&&Tourism&Competitiveness& Environmental&Performance&Index& Year1 2010& 2010& 2010& 2010& 2010& 2010& 2010& 2010& 2010& 2010& 2010& 2010& 2010& 12 N/A & 2010& RP1ranking1 91&of&128& 51&of&177& 109&of&179& 39&of&58& 80&of&125& 134&of&178& 97&of&169& 78&of&184& 144&of&183& 87&countries& 135&of&183& 85&of&139& 92&of&125& W& 50&of&163& Previous1RP1ranking1 84&of&127& 53&of&177& 104&of&179& 43&of&57& 74&of&115& 139&of&180& 105&of&182& 11 66&of&189 & 141&of&183& 87&countries& 129&of&181& 87&of&133& 82&of&125& 86&of&133& 13 61&of&149 & ASEAN\61position1 5&of&6& 6&of&6& 4&of&6& 5&of&5& 4&of&6& 6&of&6& 4&of&6& 4&of&6& 6&of&6& N/A& 5&of&6& 6&of&6& 6&of&6& 6&of&6& 2&of&6& Trend1 Deteriorated& 10 Deteriorated & Deteriorated& Improved& Improved&& Improved& Improved& Deteriorated& Deteriorated&& N/A& Deteriorated& Improved& Deteriorated& N/A& Improved&

Sources:& Forbes& Magazine,& Foreign& Policy& Magazine/The& Fund& for& Peace,& Heritage& Foundation/Wall& Street& Journal,& International& Institute& of& Management& Development,& Property& Rights& Alliance,&Transparency&International,&United&Nations&Development&Programme,&UN&Public&Administration&Network,&World&Bank,&World&Economic&Forum,&and&Yale&Center&for&Environmental& Law&&&Policy.&&&

Table12:120111Competitiveness1Rankings1161Improved,151Deteriorated1 !
Survey Title Best Countries for Business Failed States Index Index of Economic Freedom World Competitiveness Yearbook International Property Rights Corruption Perception Index Human Development Report 16 E-governance Readiness Survey 17 Doing Business Investing Across Borders Paying Taxes Global Competitiveness Report Global Enabling Trade Report Travel & Tourism Competitiveness Environmental Performance Index Year 2011 2011 2011 2011 2011 2011 2011 2012 2011 2012 2011 2011 2012 2011 2012 RP ranking 87 of 134 50 of 177 115 of 179 41 of 59 87 of 129 129 of 183 112 of 187 Released 2012 148 of 183 87 countries 124 of 183 75 of 142 Released 2012 94 of 139 Released 2012 Previous RP ranking 91 of 128 51 of 177 109 of 179 39 of 58 80 of 115 134 of 178 113 of 187 78 of 184 146 of 183 87 countries 135 of 183 85 of 139 92 of 125 18 86 of 133 50 of 163 ASEAN-6 position 5 of 6 6 of 6 4 of 6 5 of 5 6 of 6 6 of 6 4 of 6 6 of 6 N/A 4 of 6 6 of 6 6 of 6 Trend Improved 15 Deteriorated Deteriorated Deteriorated Improved Improved Improved Deteriorated N/A Improved Improved Deteriorated -

Sources:& Forbes& Magazine,& Foreign& Policy& Magazine/The& Fund& for& Peace,& Heritage& Foundation/Wall& Street& Journal,& International& Institute& of& Management& Development,& Property& Rights& Alliance,&Transparency&International,&United&Nations&Development&Programme,&UN&Public&Administration&Network,&World&Bank,&World&Economic&Forum,&and&Yale&Center&for&Environmental& Law&&&Policy.&&&

Table13:1Selected12011\20121Competitiveness1Rankings,1ASEAN\6!
TI1Corruption1Perceptions1 Index1(out1of1183)1 &&&&5& &&60& &&80& 100& 112& 129&
Institute& of&

1 Singapore& Malaysia& Thailand& Indonesia& Vietnam& Philippines&

Sources:&

WEF1Global1Competitiveness1 Report1(out1of1142)1 &&2& 21& 39& 46& 65& 75&

Development,& Transparency&

IMD1World1Competitiveness1 Yearbook1(out1of159)1 &&3& 16& 27& 37& N/A& 41&

International,& World& Bank,& and&

20121WB1Doing1 14 Business1(out1of1183) 1 &&&1& &&18& &&17& 129& &&98& 136&

World& Economic& Forum

International&

Management&

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
10 11

&Rankings&closer&to&0&=&closer&to&complete&state&failure.& &This&is&a&biennial&report;&previous&report&was&published&in&2008.& 12 &A&2010&edition&of&this&report&was&not&released.& 13 &This&is&a&biennial&report;&the&previous&ranking&is&the&2009&ranking.! 14 &The&2012&Doing&Business&Report&was&released&in&November&2011.& 15 &Failed&States&Index&Rankings&closer&to&0&=&closer&to&complete&state&failure.& 16 &This&is&a&biennial&report&released&in&2012;&previous&report&was&published&in&2010.& 17 &The&2011&Doing&Business&Report&was&released&November&2010.& 18 &This&is&the&2009&ranking;&a&2010&edition&of&this&report&was&not&released.&

10&