The Philippine Economy: 2011 and Beyond

• Three Growth Sectors– Business Process Outsourcing– Tourism– Mining

• Hard Infrastructure Support– Transport and Telecommunications– Utilities– Power– Facilities

• Soft Infrastructure Support– Education– Governance– Finance

2006 2007 2008 2009 2010 F20110.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0

1

2

3

4

5

6

7

8

Construction-to-GDP ratio GDP

Construction Output (in billion USD) and share to total GDP (%)

Source: NSCB

Construction Industry

Construction Industry

Employment in the Construction Industry (in Thousand)

6.40%

36.60%

57.00%

In Terms of Size

Large Contractors (AAA & AA)Medium sized Contractors (A&B)Small Contractors

59.90%

31.40%

3.80% 4.90%

Classification

General Engineering General BuildingTradeSpecialty

Total licensed contractors = 3,325

Construction Industry

Source: PCA Industry Report

213

1,8951,217

1,992

163126

1,044

10

4

3

11

1 1

21 Foreign Contractors

Japan China Korean ThaiAustrian Malaysian Australian

Construction Industry

Source: PCA Industry Report

Construction Industry

Prospects

Tourism – hotels, airports BPO – buildings Mining – office sites, mine developmentPower – power plantsPPP / Infrastructure – PPP list

Tarlac-Pangasinan-La Union Expressway (TPLEX)

• 88 km initially two-lane road

• 5-year construction

• BTO with 30-year concession

• $345M – project cost with $84M government subsidy

• Construction started in 2Q 2010; $43M

Road

Construction IndustryProspective Public-Private Partnership (PPP) List

TOLL ROADS• TPLEX Tarlac-La Union (ongoing) $345M• Daang Hari- Slex Link (ongoing) $36M• NAIA Expressway Phase 2 $235M• Cavite-Laguna (North-South) Expressway $233M• NLEX-SLEX Connector $477M

LIGHT RAIL• LRT 1 South Extension $1.5B• LRT Line 2 Phase 2 $251M

Prospective Public-Private Partnership (PPP) List

Construction Industry

AIRPORTS• Bohol Airport $169M• Puerto Princessa $98M• Legaspi Airport $71M• O&M Laguindingan Airport $33M

EDUCATION

• School Infrastructure Projects $233M

Real Estate

F

Source: BSP

OFW REMITTANCES

Real Estate

Socialized Low cost Mid Income High Rise Condo

Commercial & Others

Jan-Apr 2010 14967 19746 11958 11283 876

Jan-Apr 2011 9823 14336 10539 20698 658

2,500

7,500

12,500

17,500

22,500

Issued Licenses to Sell

Source: HLURB

BIR: Increased Threshold for VAT Exemption in 2012

Not subjected to VAT

• Sale of a residential lot which is not more than USD46 thousand per unit from USD35 thousand

• Sale of a residential house and lot which is not more than USD74 thousand from USD58 thousand

• Lease of residentuial units which is not more than USD296.00

Real Estate

Real Estate

Foreign Ownership limitation on owning real properties

Entry Points

REIT – currently under discussionListed real estate companies

Source: DOE, Investment Opportunities Report by Usec. Asirit

Energy

Source: DOE, Investment Opportunities Report by Usec. Asirit

Energy

Source: DOE, Investment Opportunities Report by Usec. Asirit

TOTAL 5,438.0 838.0 5,116.0 2,428.8 80.0 9,510.8 14,878.8

Energy

Energy

Source: DOE, 2010 Power Situationer Report

Installed and Dependable Capacity, Philippines

Energy

Source: DOE, 2010 Power Situationer Report

Coal; 34%

Oil; 10%

Natural Gas; 29%

Geo-thermal; 15%

Hydro; 12%

Coal;

29.75%

Oil; 19.52

%

Natura

l Gas;

17.49%

Geothermal; 12.02%

Hy-dro; 20.78% Wind; 0.20%

Solar; 0.01%Biomass; 0.24%

Installed capacity = 16,359 MW Dependable capacity = 13,902 MW

Installed and Dependable Capacities in MW, Total Philippines

Energy

Source: DOE, 2010 Power Situationer Report

Gross Generation by Plant Type, in GWhr

Energy

Source: DOE, 2010 Power Situationer Report

Coal;

34%

Oil; 10%

Natural Gas; 29%

Geothermal; 15%

Hydro; 12%

2010 Gross Power Generation, Philippines

Total Generation = 67,743 Gwh

Energy

Source: DOE, 2010 Power Situationer Report

71%

29%

Non-NPC NPC

Generation by Ownership, in GWhrTotal Philippines

48,442 GWh

19,786 GWh

Energy

Luzon Visayas Mindanao -

20,000

40,000

60,000

80,000

100,000

120,000

Required Additional Capacity Committed CapacityExisting Capacity Required Reserve MarginPeak Demand

2011-2020

Luzon Visayas Mindanao -

20,000 40,000 60,000 80,000

100,000 120,000 140,000 160,000

Required Additional Capacity Committed CapacityExisting Capacity Required Reserve MarginPeak Demand

2021-2030

MW

MW

Supply-Demand Outlook

The Philippines needs a total additional capacity of 14,100 MW

onwards to 2030

Source: DOE, 2011 Power Demand and Supply outlook

MABUHAY!