prospects on manufacturing and their implications on … • snapshot of the manufacturing sector...

Prospects on Manufacturing and Their Implications on the LogisticsTheir Implications on the Logistics

BusinessProf. Cayetano W. Paderanga, Jr.

IDEAIDEA

Outline

• Snapshot of the manufacturing sector

• Developments in the macroeconomy• Developments in the macroeconomy

• Prospects of the manufacturing sector, 2013‐20142014

• Implications on the logistics business

Snapshot of the manufacturing sector


Manufacturing – a key sector in the economy; creates about 1 in every 4 pesos of value added

SectorsPeriod

2001 2010 2011 2012

Share of GVA to GDP per Sector, 2000 = 100

2001‐2010 2011 2012Agriculture, Hunting, Forestry, & Fishery 13.2% 11.5% 11.1%Mining & Quarrying 1.0% 1.2% 1.1%Manufacturing 23.3% 22.4% 22.1%Manufacturing 23.3% 22.4% 22.1%Construction 4.9% 5.2% 5.5%Electricity, Gas, & Water 3.6% 3.3% 3.4%Transport, Storage, & Communication 7.7% 7.5% 7.7%Trade 16.5% 16.5% 16.7%Financial Intermediation 5.9% 6.8% 6.7%Real Estate, Renting, & Business Activities 9.5% 10.7% 11.0%Public Administration 4 7% 4 5% 4 2%Public Administration 4.7% 4.5% 4.2%Other Services 9.8% 10.5% 10.6%

Source: National Statistical Coordination Board, staff calculation


Employs 3.1 million, accounting for 8% of total employment

Manufacturing Employment12%

3 100

3,150

8%

10%

3,000

3,050

3,100

4%

6%

2,900

2,950

0%

2%

2,750

2,800

2,850


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Employment in Manufacturing, in '000 [LHS] Share of Manufacturing to Total Employment [RHS]


Manufacturing has the most extensive linkages in the economyy

Sectoral Linkage Index (2000 Input‐Ouput Table)

SectorsLinkage Index

Forward Backward TotalForward Backward TotalManufacturing 3.13 1.26 4.39Other Services 1.00 1.16 2.15Transport, Storage 0.82 1.20 2.03Agriculture, Fishery & Forestry 1.06 0.86 1.92Trade 0.90 0.97 1.88Mining & Quarrying 0.83 0.99 1.82Construction 0 63 1 14 1 77Construction 0.63 1.14 1.77Electricity, Gas and Water 0.83 0.92 1.75Finance 0.78 0.96 1.74Communication 0.68 0.95 1.63


Real Estate & Ownership of Dwellings 0.73 0.77 1.50Government Services 0.61 0.82 1.43


Manufacturing has the most extensive linkages in the economyy

MfgMfg MfgMfg

Tranport, Storage

Agri, Fishery, Forestry

Mfg

dd TradeTrade


GVA narrowed in 2009 but recovered quickly; top firms’ revenue, however, remained weak

Manufacturing GVA TrendsRevenue Trends of Top 1000 Mfg Corps25%1,600

YearTotal Revenue, in billion pesos

Growth Rate23%

24%

1,000

1,200

1,400

2007 2,571.7

2008 2,896.4 12.6%21%

22%

400

600

800

2009 2,735.4 ‐5.6%

2010 1,720.4 ‐37.1%19%

20%

0

200

Source: National Statistics Office, staff calculation

Source: Top Corporations Reports, staff calculationManufacturing GVA, in billion pesos [LHS]

Share of Mfg GVA to GDP [RHS]


l fLocal manufacturing sector grew 50% since 2000, but one of the slowest in the region…

20%

180

200 350Manufacturing GVA Index, 2000 = 100

10%

15%

120

140

160

200

250

300

0%

5%

60

80

100

100

150

200

‐10%

‐5%

0

20

40

Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4

0

50

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Q1 '00

Q4 '00

Q3 '01

Q2 '02

Q1 '03

Q4 '03

Q3 '04

Q2 '05

Q1 '06

Q4 '06

Q3 '07

Q2 '08

Q1 '09

Q4 '09

Q3 '10

Q2 '11

Q1 '12

Q4 '12

Mfg GVA Index [LHS] Growth Rate [RHS]

China Indonesia Malaysia

Philippines Thailand Vietnam

Source: National Statistical Coordination Board, staff calculation Source: World Bank, staff calculation


…MISSI, however, with a few exceptions, shows only a revival to 2001 production level

40%120 600300

MISSI Volume of Production Index, 2000 = 100

10%

20%

30%

80

100

300

400

500

150

200

250

‐10%

0%

40

60

100

200

50

100

‐40%

‐30%

‐20%

0

20

1 2 3 4 6 7 8 9 1 2

00

Jan‐01

Jul‐0

1

Jan‐02

Jul‐0

2

Jan‐03

Jul‐0

3

Jan‐04

Jul‐0

4

Jan‐05

Jul‐0

5

Jan‐06

Jul‐0

6

Jan‐07

Jul‐0

7

Jan‐08

Jul‐0

8

Jan‐09

Jul‐0

9

Jan‐10

Jul‐1

0

Jan‐11

Jul‐1

1

Jan‐12

Jul‐1

2

Food [LHS] Beverages[LHS]

Jan‐01

Apr‐02

Jul‐0

3

Oct‐04

Jan‐06

Apr‐07

Jul‐0

8

Oct‐09

Jan‐11

Apr‐12

VOPI [LHS] Growth Rate [RHS]

Chemical Products [LHS] Non‐metallic Mineral Products [LHS]

Basic Metals [LHS] Transport Equipment [LHS]

Miscellaneous Manufactures [LHS] Furniture & Fixtures [RHS]

Source: National Statistics Office


Many subsectors, e.g., semi‐conductors, have weaker production in 2012 than in 2001p

180

MISSI Volume of Production Index, 2000 = 100

100

120

140

160

20

40

60

80

0

20

Jan‐01

May‐01

Sep‐01

Jan‐02

May‐02

Sep‐02

Jan‐03

May‐03

Sep‐03

Jan‐04

May‐04

Sep‐04

Jan‐05

May‐05

Sep‐05

Jan‐06

May‐06

Sep‐06

Jan‐07

May‐07

Sep‐07

Jan‐08

May‐08

Sep‐08

Jan‐09

May‐09

Sep‐09

Jan‐10

May‐10

Sep‐10

Jan‐11

May‐11

Sep‐11

Jan‐12

May‐12

Sep‐12

Tobacco Textiles Footwear & Wearing Apparelg pp

Wood & Wood Products Paper and Paper Products Publishing & Printing

Leather Products Rubber & Plastic Products Petroleum Products

Machinery, excluding Electrical Electrical MachinerySource: National Statistics Office


A number of factors offer threats to the manufacturing sectorg

• Uncompetitive energy cost

• Emergence of low cost production countries• Emergence of low‐cost production countries

• Weak global economic growth

• Trade liberalization


Mfg sector growth, more correlated to external demand; but domestic factors also matter

30%

Mfg GVA, Exports, and Net GDP* Growths, 2000 = 100

Correlation with Mfg Growth

10%

15%

20%

25%

SectorsPeriod

2000 ‐ 2010‐

Correlation with Mfg Growth

10%

‐5%

0%

5% 2012 2012

Exports 0.59 0.71

Net GDP* 0 36 0 37

‐20%

‐15%

‐10%

Q1 '00

Q3 '00

Q1 '01

Q3 '01

Q1 '02

Q3 '02

Q1 '03

Q3 '03

Q1 '04

Q3 '04

Q1 '05

Q3 '05

Q1 '06

Q3 '06

Q1 '07

Q3 '07

Q1 '08

Q3 '08

Q1 '09

Q3 '09

Q1 '10

Q3 '10

Q1 '11

Q3 '11

Q1 '12

Q3 '12

Net GDP* 0.36 0.37*Net of net exports


Manufacturing Exports GDP net of net exports

*Net of net exportsSource: National Statistical Coordination Board, staff calculation


k l d d l d hWeak external demand, in part, lowered share of mfg to exports

6%

90%

100%GDP Growth of Major Trade Partners Share of Mfg to Exports

2%

4%

60%

70%

80%

‐2%

0%

30%

40%

50%

6%

‐4%

0%

10%

20%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011‐6%2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

United States European Union Japan

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

China Indonesia Malaysia

Thailand Philippines Vietnam

Source: World Bank Source: World Bank


d hIncreasing income, demographic transition make domestic economy viable market

14%2,500

Gross National Income Trends Population Age Structure

3.6% 4.3%64+

8%

10%

12%

1,500

2,000

15 4%

22.9%

15 3%

27.4%

25 34

35‐64

p4%

6%

8%

1,000

,

9.4%

15.4%

9.1%

15.3%

20‐24

25‐34

Age group

0%

2%

0

500

Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4

38.2%

10.5%

33.4%

10.5%

0‐14

15‐19

Q1 '00

Q4 '00

Q3 '01

Q2 '02

Q1 '03

Q4 '03

Q3 '04

Q2 '05

Q1 '06

Q4 '06

Q3 '07

Q2 '08

Q1 '09

Q4 '09

Q3 '10

Q2 '11

Q1 '12

Q4 '12

GNI, in billion pesos [LHS] Growth Rate [RHS]

Source: National Statistical Coordination Board Source: National Statistics Office, staff calculation

‐40% ‐20% 0% 20% 40%

1995 2010

40% 20%

Developments in the macroeconomy


The Philippines has shown resilience throughout the global economic slowdown.

Real Gross Domestic Product, Annual Average Global Economic Growth Forecasts

10%

9.0%7,000

4%6%8%10%

6.7% 6.6%

7.6%

6.6%

6.0%

7.0%

8.0%

5,000

6,000

sos

‐4%‐2%0%2%5.0% 4.8%

5.2%

4.2%3.9%

3.0%

4.0%

5.0%

2 000

3,000

4,000

In billion pe

‐8%‐6%‐4%

'08 '09 '10 '11 '12 '13 '141.1%

0.0%

1.0%

2.0%

0

1,000

2,000

Source: National Statistical Coordination Board Source: International Monetary Fund, World Bank, IDEA staff calculation

US Japan World Emerging0.0%0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Level (LHS) Growth rate (RHS)


The economy grew by 6.6 percent in 2012.

Regional Economic Performance, 2012Real Gross Domestic Product, Quarterly10.0%1800

Selected8.4%

8.9%

7.3%

6.1% 6.3%6.0%

7.2%6.8%

6.0%

7.0%

8.0%

9.0%

1200

1400

1600

s

Selected Economies

Growth Rate

China 7.8

PHILIPPINES 6 64.9%

3.6%3.2%

4.0%

3.0%

4.0%

5.0%

600

800

1000

in billion pe

sos PHILIPPINES 6.6

Indonesia 6.3*

India 6.5

0.0%

1.0%

2.0%

0

200

400 Malaysia 5.3*

Vietnam 4.7

Thailand 2.6

* As of Q3 2012Source: Country statistical websites

Source: National Statistical Coordination Board

Level (LHS) Growth rate (RHS)

Singapore 1.5

h d d d d d f l l b


On the demand side, demand for Filipino labor abroad supports consumption growth…

Top Remittance Recipient Economies, 2012

7080

EconomiesPer Capita

$70

66

50

60

70

ollars

EconomiesRemittance*, in US$

India 55.6

China 48.9

PHILIPPINES 249 5

24 2421

18

30

40

in billion US do PHILIPPINES 249.5

Mexico 206.7

Nigeria 123.5

Egypt 218.7 18

14 149 7

0

10

20Pakistan 77.6

Bangladesh 91.6

Vietnam 101.1

Source: World Bank estimates, IDEA computation

Lebanon 1,627.9

*Using 2012 population estimates of the Population Reference Bureau


…while resurgent government spending and exports support the growth picture…p pp g p

Government Cash Flow Growth Rates

Monthly Export Performance, 2010 – Nov 2012

60%60%6.00

30%

40%

50%

60%RevenueExpenditure

20%30%40%50%

4.00

5.00

h rate

lion US$

0%

10%

20%

30%

‐20%‐10%0%10%

1.00

2.00

3.00

Growth

FOB, in

Bil

‐30%

‐20%

‐10%

0%

‐40%‐30%

‐10

‐Jan

May Sep

11‐Jan

May Sep

12‐Jan

May Sep

Source: Bureau of Treasury, IDEA staff calculations


Export (LHS) Growth (RHS)


…though investments remain weak.

Capital Formation and Construction Gross Value Growth Rates

60%

80%

20%

40%

60%

‐40%

‐20%

0%

‐80%

‐60%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2009 2010 2011 2012


2009 2010 2011 2012

Public Construction Private Construction Construction Capital Formation


On the supply side, all sectors contributed to economic growth.

Gross Value Added Growth Rates25%

15%

20%

5%

10%

‐5%

0%


Services AFF Industry


Low inflation allows for adequate monetary policy space.

6%

Consumer Price Inflation and Contribution of Components (2006 = 100) 7%

Overnight Policy Rates

3%

4%

5%

6%

6%

0%

1%

2%

3%

5%

Q1 '11 Q2 Q3 Q4 Q1 '12 Q2 Q3 Q4

Food and Non‐Alcoholic Beverages

Housing, Water, Electricity, Gas, and Other Fuels

Transport

R t t d Mi ll G d d S i3%

4%


Restaurants and Miscellaneous Goods and Services

Others

Inflation

Q1 '10 Q2 Q3 Q4 Q1 '11 Q2 Q3 Q4 Q1 '12 Q2 Q3

RP Rate RRP Rate

Source: Bangko Sentral ng Pilipinas


Consequently, interest rates have declined.

Treasury Bill Rates3%

dred

s

2%

Hun

d

1%

0%

11 Jan

Feb

Mar

Apr

May Jun Jul

Aug Sep

Oct

Nov Dec

12 Jan

Feb

Mar

Apr

May Jun Jul

Aug Sep

Oct

Nov


20 20

91 ‐ Day All Maturities

BOP surplus drives external stability boosting


BOP surplus drives external stability, boosting the strength of the peso.

Current Account, Capital Account, and Balance of Payment

5 000 8%

9%47

Peso‐Dollar Exchange Rate

3,000

4,000

5,000

S $ 5%

6%

7%

8%

44

45

46

0

1,000

2,000

In M

illion US

1%

2%

3%

4%

41

42

43

‐2,000

‐1,000

10 Jan

Mar

May Jul

Sep

Nov

11 Jan

Mar

May Jul

Sep

Nov

‐1%

0%

40

41

Jan‐10

Apr‐10

Jul‐1

0

Oct‐10

Jan‐11

Apr‐11

Jul‐1

1

Oct‐11

Jan‐12

Apr‐12

Jul‐1

2

Oct‐12


201

201

BOP CA KA

Peso/Dollar Exchange Rate [LHS]

Appreciation Rate [RHS]



Investment is not yet able to take advantage of CA surplus.

Savings, Investment, and Gap

800

900

600

700

800

Pesos

300

400

500

in Billions

‐

100

200

2010 Q1 Q2 Q3 Q4 2011 Q1 Q2 Q3 Q4 2012 Q1 Q2 Q3 Q4

Source: National Statistical Coordination Board, IDEA Staff computation

2010 Q1 Q2 Q3 Q4 2011 Q1 Q2 Q3 Q4 2012 Q1 Q2 Q3 Q4

Gap Savings Investment


Government spending has picked up, but the deficit is contained.

Government Revenue, Expenditure, and Deficit250

100

150

200

sos

(50)

‐

50

In billion Pe

s

(150)

(100)

(50)

Source: Bureau of the TreasuryDeficit Revenue Expenditure


Weakness in the labor market persists.

Indicators June 2012 October 2012 October 2011

Key Labor and Employment Indicators

Employment rate 93.0% 93.2% 93.6%

U l t t 7 0% 6 8% 6 4%Unemployment rate 7.0% 6.8% 6.4%

Underemployment rate 22.7% 19.0% 19.1%

Labor force participation rate 64.0% 63.9% 66.3%



Recent positive developments fuel optimism.

Philippine Stock Exchange Index

Feb '13 6318.61

6,400

Bullish sentiment continues to drive

6,100

6,200

6,300

continues to drive the stock market to record highs…5,800

5,900

6,000

5,500

5,600

5,700

Source: Philippine Stock Exchange

5,400Dec '12 Jan '13 Feb '13



Rank Change from ASEAN ranking

2012 WEF Global Competitiveness Report ‐ Philippines

previous year

65th of 144 +10 6th of 8 (+1)

Sound macroeconomic and gains in public trust in

Source: WEF Global Competitiveness Report

Sound macroeconomic management…

Favorable interest rate spreadR d d d b

…and gains in public trust in institutions.

Transparency in budgeting processMReduced government debt More open procurement processEfforts to reduce corruption



Agency Rating Outlook Date

Sovereign Credit Rating

Recent switch to positive outlook by Standard & Poor’s

Agency Rating Outlook Date

Fitch BB+ Stable Oct 28, 2011

Standard & Poor’sMoody’s Ba1 Stable Oct 29, 2012

S&P BB+ Positive Jul 4, 2012



Long‐term service sector and remittance trends temper the growth outlook.

Service Sector Growth Rates and Trend Overseas Filipino Monthly Dollar Remittances12% 50%2.5

6%

8%

10%

30%

40%

1 5

2.0

%billion

$

Remittances Growth Rate

0%

2%

4%

0%

10%

20%

1.0

1.5

Growth, in

mittances, in

‐2%'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Service SectorTradeR Estate Renting Bus Activities

‐20%

‐10%

0%

0.0

0.5

'04

Sep

May '06

Sep

May '08

Sep

May '10

Sep

May '12

Sep

Rem

Source: National Statistical Coordination Board Source: Bangko Sentral ng Pilipinas

R. Estate, Renting, Bus. ActivitiesOther ServicesService Sector Trend

Jan ' S M

Jan ' S M

Jan ' S M

Jan ' S M

Jan ' S

Significant increase in capital formation could


Significant increase in capital formation could boost growth.

6% 35%Investment and GDP Growth

4%

5%

20%

25%

30%

2%

3%

10%

15%

20%

Investment/GDP (right scale)

0%

1%

0%

5%

1 4 3 2 1 4 3 2 1 4 3 2 1 4 3 2 1 4 3 2 1 4 3 2 1 4 3

Investment/GDP (40 Qtr Moving Average) (right scale)GDP growth (40 Qtr Moving Average) (left scale)

1992:1

1992:4

1993:3

1994:2

1995:1

1995:4

1996:3

1997:2

1998:1

1998:4

1999:3

2000:2

2001:1

2001:4

2002:3

2003:2

2004:1

2004:4

2005:3

2006:2

2007:1

2007:4

2008:3

2009:2

2010:1

2010:4

2011:3

Source: National Statistical Coordination Board, IDEA staff calculation

Bottom lineEconomy has what it takes to maintain at least 6% growth, on the back of traditional growth6% growth, on the back of traditional growth drivers…

BPOs, real estate, tourism, finance on the supply side

Remittance‐driven consumption, increased government p gspending and positive exports on the demand side

But more investments are needed to sustain andBut more investments are needed to sustain and accelerate growth.


PH relatively unattractive to FDI, but has potential to attract more.

FDI Attraction Index vs. FDI Potential Index Matrix, 2011

Above expectations In line with expectations Below expectations

High

Q1

China, Hong Kong, Malaysia, Singapore,

Viet Nam

ex

DI A

ttraction Inde

Q2 Cambodia Brunei

Indonesia, Thailand

Q3 Lao,

Japan

FD Q Myanmar

Japan

Low

Q4 Philippines

Q4 Q3 Q2 Q1Low FDI Potential Index High

Source: United Nations Conference on Trade and Development


FDI in PH contributes the least to economic development.

FDI Contribution Index vs. FDI Presence Matrix, 2011Above expectations In line with expectations Below expectations

High

Q1 Cambodia

MalaysiaHong KongSingapore

n FD

I Con

tribution

Inde

Q2

Q3 China

I d i

Q Indonesia

Low

Q4 Japan

Philippines

Q4 Q3 Q2 Q1Low FDI Inward Stock/GDP High

Source: United Nations Conference on Trade and Development


Investment – missing leg for faster, more sustainable growth.

1,000

Net Foreign Direct Investments Comparative FDI inflows of selected ASEAN countries, as of 1H 2012

400

600

800

US$

Country Level Growth Rate

Singapore $27.4 billion ‐1.9%

0

200Million U

Indonesia $8.2 billion ‐20.6%

Thailand $5.6 billion 62.1%

‐400

‐200

Jan Feb Mar Apr May Jun Jul Aug

Malaysia $4.4 billion ‐36.6%

PHILIPPINES $0.9 billion 10.6%

C b di $0 9 billi 166%2011 2012

Source: Bangko Sentral ng Pilipinas Source: UNCTAD

Cambodia $0.9 billion 166%

Though macroeconomic management and


Though macroeconomic management and governance issues are being addressed,

infrastructure remains a concern.infrastructure remains a concern.WEF Global Competitiveness Report 2010‐2011

Source: National Competitiveness Council


Infrastructure needs now being addressed by the government.

80%

Gross Value in Construction Year‐on‐Year Growth Rate by Type

2011 – 2016 PH Government Investment Requirement

h

%

40%

60%

80%Public construction

Private construction

GV in construction

Infra dev't

Php1.94 T

(38 0%)

OthesPhp1.86

T(36.4%)

‐20%

0%

20%(38.0%)Social dev't

Php1.31 T

(25 6%)

‐80%

‐60%

‐40%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2012 2013 GrowthTotal Budget in Php B 1 816 0 2 006 0 10 5%

(25.6%)

Proposed 2013 Infrastructure Budget

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2010 2011 2012


Total Budget, in Php‐B 1,816.0 2,006.0 10.5%Capital Outlay 18.7% 20.6% 21.5%Infrastructure 13.9% 16.0% 19.5%Source: National Economic Development Authority


Catching up on PPP projects…

Project Status

PPP Update

jDaang Hari‐SLEX Road Link Awarded

PPP for School Infrastructure Project Phase I Awarded

Modernization of the Philippine Orthopedic Center Bidder due diligence ongoingModernization of the Philippine Orthopedic Center Bidder due diligence ongoing

NAIA Expressway Project Bidder due diligence ongoing

LRT Line 1 Cavite Extension and O&M Bidder due diligence ongoing

Mactan‐Cebu International Airport Passenger Terminal Building Invitation to bid publishedMactan Cebu International Airport Passenger Terminal Building Invitation to bid published

PPP for School Infrastructure Project Phase II Invitation to bid published

Automatic Fare Collection System Invitation to bid published

Angat Hydro Plant Rehabilitation and O&M Invitation to bid publishedAngat Hydro Plant Rehabilitation and O&M Invitation to bid published

NLEX‐SLEX Connector Road For publication of invitation to bid

Source: PPP Center

Prospects of the manufacturing sector, 2013 20142013‐2014

IDEA Forecasts (preliminary)

Prospects of the manufacturing sector, 2013‐2014

PH economic growth hit 6.6% in 2012, maintaining above 6% growth through 2014.

Assumptions 2011 2012 2013/f 2014/f

Inflation 4.8 3.3 4.2 4.391‐day Treasury Bill Rate 1.4 1.6 1.1 1.6Peso‐Dollar Exchange Rate 43.3 42.4 40.9 40.5Dollar Remittances Growth Rate 7 2 6 0 5 0 5 0Dollar Remittances Growth Rate 7.2 6.0 5.0 5.0Budget Deficit, in Billion Pesos (197.8) (127.3) (148.7) (160.1)US GDP Growth Rate 1.6 2.2 2.4 2.4Japan GDP Growth Rate (0.8) 2.6 1.6 1.6

Aggregate 2011 2012 2013/f 2014/f

G D i P d 3 9 6 6 6 3 6 3Gross Domestic Product 3.9 6.6 6.3 6.3Net Primary Income 1.0 5.8 6.3 5.3Gross National Income 3.2 5.8 6.3 6.1


Private demand, except investment, holds steady growth.

Demand Sectors 2011 2012 2013/f 2014/f

1. Household Final Consumption Expenditure 6.3 6.1 5.6 4.92. Government Final Consumption Expenditure 1.0 11.8 3.8 8.93. Capital Formation 8.1 (4.4) 10.0 5.14. Exports (4.2) 8.7 10.6 8.55. Less: Imports 0.2 4.2 6.7 7.0


All major production sectors to contribute positively to economic growth.

Production Sectors 2011 2012 2013/f 2014/f

1 Agriculture Hunting Forestry and Fishing 2 7 2 7 3 6 4 41. Agriculture, Hunting, Forestry, and Fishing 2.7 2.7 3.6 4.42. Industry Sector 2.3 6.5 6.2 5.8a. Mining & Quarrying 7.0 (3.7) 12.6 3.0b. Manufacturing 4.7 5.4 4.6 4.3c Construction (7 3) 14 4 12 8 12 4c. Construction (7.3) 14.4 12.8 12.4d. Electricity,Gas, and Water Supply 0.6 5.1 4.2 4.9

3. Service Sector 5.1 7.4 6.9 6.9a. Transport, Storage & Communication 4.3 9.1 7.3 6.3b Trade 3 3 7 5 5 1 4 5b. Trade 3.3 7.5 5.1 4.5c. Financial Intermediation 5.2 7.8 9.3 8.3d. R. Estate, Renting & Business Activities 9.3 7.9 8.7 7.4e. Public Administration & Defense 0.3 3.3 7.8 16.9f Other Services 6 6 7 2 5 8 5 8f. Other Services 6.6 7.2 5.8 5.8


Upside factors to manufacturing growth

• Development of a an industry roadmap

• Power saving schemes (open access to• Power‐saving schemes (open access to electricity)

L f l b• Low cost of labor

• Infrastructure development, PPP

• Better than expected global economic growth


Downside factors to manufacturing growth

• Power rate hikes

• Absence of a long term strategy for growth• Absence of a long‐term strategy for growth

• Weak investment

Implications on the logistics business


Manufacturing growth to drive higher demand for logistics services

• Every unit increase in final demand for f t i t 0 02 it l imanufacturing generates 0.02 unit sales in

transport and storage sector.

• Outsourcing “in‐house” transport by manufacturing firms can boost further growth in the sector

Postal & courier activities sea & coastal

Implications on the logistics business

Postal & courier activities, sea & coastal transport, storage & warehousing to benefit

the mostthe mostDegree of Backward Linkages of the Logistics Business

Storage andPostal and Road freight Sea and coastal

Agriculture, Fishery, and Forestry 0.0% 0.0% 1.4% 0.3% 0.0%Mining and Quarrying 0 0% 0 1% 0 0% 0 0% 0 0%

Air transportStorage and warehousing

SECTORPostal and

courier activitiesRoad freight transport

Sea and coastal transport

Mining and Quarrying 0.0% 0.1% 0.0% 0.0% 0.0%Manufacturing 84.1% 4.0% 86.9% 3.2% 69.0%Construction 0.2% 52.8% 0.0% 0.2% 0.3%Utilities 0.2% 0.5% 0.1% 0.0% 2.2%Transportation, Communication, and Storage 4.5% 0.9% 2.9% 7.9% 1.6%p gTrade 0.6% 37.5% 0.3% 47.2% 0.4%Repairs 0.0% 0.0% 0.2% 0.0% 0.0%Finance 9.5% 3.3% 3.6% 20.1% 4.9%Ownership of Dwellings and Real Estate 0.0% 0.0% 1.5% 0.3% 17.2%


Government Services 0.0% 0.8% 0.0% 16.6% 0.1%Private Services 1.0% 0.0% 3.1% 4.2% 4.2%

Prospects on Manufacturing and Their Implications on the LogisticsTheir Implications on the Logistics

BusinessThank you!Thank you!

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prospects on manufacturing and their implications on … • snapshot of the manufacturing sector...

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