PHILLIPINE INSTITUTE FOR DEVELOPMENT STUDIES Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas
November - December 2003
Vol. XXI No. 6
O
n December 4, 2002, Japan’s Prime Minister Junichiro Koizumi and the Philippines’ President Gloria Macapagal-Arroyo held a meeting in Tokyo during the latter’s visit to Japan and discussed the establishment of a Japan-Philippines Economic Partnership (JPEP). The envisaged JPEP would include a possible free trade agreement and other components covering services, investments, support for SMEs, human resource development and other forms of economic cooperation.
The outlook for a Philippine* Japan economic partnership
Why a Free Trade Agreement (FTA)? The worldwide trend is pointing toward regional integration or free trade agreements. In November 2001, the ASEAN and the People’s Republic of China (PRC) announced plans to establish the world’s biggest free trade area (FTA) by 2010. Two months after, Japan abandoned its “single track” approach to a multilateral World Trade Organization
What's Inside? 7
Courting the Japanese elderly:
(WTO) by promoting its own version of an FTA with the ASEAN. This rethinking on FTA by Japan, however, started as early as 1998 through its individual initiatives with Mexico, Korea and Chile. By January 13, 2001, Japan signed its very first bilateral free trade accord with Singapore through the JapanSingapore Economic Agreement for a New Age Partnership. The removal of trade and investment bariers in the FTAs would lower transaction costs, raise economic efficiency, improve economies of scale and upgrade product quality. It would further improve the external competitiveness of agreeing parties on top of substantial trade-creation effects and bigger flows of traderelated investments.
Prospects for the Philippines' retirement and medical tourism industry 13 Making science policy work in the Philippines
ISSN 0115-9097
* Condensed version of the situationer component of the Japan-Philippines Economic Partnership Agreement (JPEPA) research project of the Philippine Institute for Development Studies (PIDS). ** Senior Research Fellow and Research Analyst II, respectively, at the PIDS.
By Erlinda M. Medalla and Dorothea C. Lazaro**
Japan's importance as Philippines’ partner in an FTA Japan plays an important role in the economic as well as infrastructural development of the Philippines. Through the years, Japan has become one of the country’s largest trading partners even if there is no existing bilateral trade or economic agreement between the two countries. Thus, an economic partnership agreement seems to provide an opportunity for further economic expansion and development. Trade Japan is considered an economic hegemon not only in East Asia but also in the world. In 2000, it was the 5th largest exporter with a share of 4.55 percent of the total world exports which was equivalent to an estimated US $252 billion. During the same year, it was also the third largest importer with a 7.5 ) 3
DEVELOPMENT RESEARCH NEWS
DEVELOPMENT RESEARCH NEWS Vol. XXI No. 6 November - December 2003 ISSN 0115 - 9097
DEVELOPMENT RESEARCH NEWS is a bimonthly publication of the PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIES (PIDS). It highlights the findings and recommendations of PIDS research projects and important policy issues discussed during PIDS seminars. PIDS is a nonstock, nonprofit government research institution engaged in long-term, policy-oriented research. This publication is part of the Institute's program to disseminate information to promote the use of research findings. The views and opinions expressed here are those of the authors and do not necessarily reflect those of the Institute. Inquiries regarding any of the studies contained in this publication, or any of the PIDS papers, as well as suggestions or comments are welcome. Please address all correspondence and inquiries to: Research Information Staff Philippine Institute for Development Studies Room 304, NEDA sa Makati Bldg., 106 Amorsolo Street, Legaspi Village, 1229 Makati City, Philippines Telephone numbers 892-4059 and 893-5705 Telefax numbers (632) 893-9589 and 816-1091 E-mail address: publications@pidsnet.pids.gov.ph Reentered as second class mail at the Business Mail Service Office under Permit No. PS-570-04 NCR. Valid until December 31, 2004. Annual subscription rates are: P200.00 for local subscribers and US$20.00 for foreign subscribers. All rates are inclusive of mailing and handling costs. Prices may change without prior notice.
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Editor's Notes There are many complementarities in the relations between Japan and the Philippines. In the areas of trade and investments, for instance, not only are the numbers in terms of volume and value encouraging but are also indicative of more potentials in terms of exchange that may still be tapped. Thus, the ongoing negotiation for a Japan-Philippines Economic Partnership Agreement (JPEPA) comes at a no better time. For it provides an opportunity to clear up certain gray areas in terms of definitions, regulations and the like that may serve as constraints in exploiting the full potentials of new and emerging areas of complementarities. One area that will benefit from a fair and frank negotiation is the growing retirement and medical tourism industry. A little more than 3 decades ago, not much attention was given to retirees and elderly tourists who travelled overseas. Sure, they were accorded respect and priority to seats and slots but they were not the focus of attention of travel agencies and operators nor the subject of planning by tourism authorities in various travel destinations. In their travels, therefore, they would join the usual tour groups and packages where the routine was to be up by sunrise and have an early start to be able to maximize the time. The aim was to see as many places as possible during the alloted time of the tour. Needless to say, such tours ended up being exhausting and rigid. And the older tourists or those with relatively weaker physical constitutions were normally the ones who suffered the most inconvenience. Not anymore. These days, as seen in the special tour packages offered by countries like Singapore, Thailand and Malaysia, the elderly and the retirees are increasingly becoming the special tourist market and pampered with special amenities and privileges. What brought about such change? Basically, it is the demographic reality. More of the developed countries' populations are ageing. At the same time, they have money to spend for travel and leisure. In the Asian region, it is Japan, with its ageing population and a relatively high per capita income, that provides this market. It is thus only logical and practical for destination countries in the region to tap said market and entice them to visit more often and stay longer, if possible. The Philippines, of course, shares the same objective. Endowed with resources that are natural magnets in attracting this market, the Philippines has seriously begun to examine, as discussed in the article starting on page 7, its prospects of becoming a top haven for this special Japanese market. But there is work to be done, including basic homework such as the peace and order situation, cleanliness and sanitation, efficiency of infrastructure and open access to travel. At the same time, too, there are areas where kinks, as noted earlier, need to be settled. Nonetheless, hopes are high that at the end of the day, when the JPEPA shall have come to a conclusion, the Philippines will reap much fruit in various areas, including the retirement and medical tourism industry. â??
Editorial Board: Dr. Mario B. Lamberte, President; Dr. Gilberto M. Llanto, Vice-President; Mr. Mario C. Feranil, Director for Project Services and Development; Ms. Jennifer P.T. Liguton, Director for Research Information; Ms. Andrea S. Agcaoili, Director for Operations and Finance; Atty. Roque A. Sorioso, Legal Consultant. Staff: Jennifer P.T. Liguton, Editor-in-Chief; Claudette G. Santos, Issue Editor; Sheila V. Siar (on study leave), Genna J. Estrabon, Jane C. Alcantara, Ma. Gizelle G. Manuel, Edwin S. Martin and Mitzi H. Co, Contributing Editors; Valentina V. Tolentino and Rossana P. Cleofas, Exchange; Delia S. Romero, Galicano A. Godes, Necita Z. Aquino and Alejandro P. Manalili, Circulation and Subscription; Claudette G. Santos, Layout and Design.
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DEVELOPMENT RESEARCH NEWS
November - December 2003
Table 1. Top 10 exporters and importers of the world, 1996-2000 (% share) Rank Country
Exports
Country
1996
1997
1998
1999
2000
14.47
15.10
16.00
17.30
18.58
Imports
USA
1996
1997
1998
1999
2000
12.14
12.71
12.65
12.42
12.47
1
USA
2
Germany
8.02
7.51
7.90
7.54
7.03
Germany
8.51
8.07
8.53
8.25
7.53
3
UK
5.05
5.13
5.35
5.30
5.06
Japan
7.83
7.60
7.04
7.21
7.46
4
France
4.85
4.57
4.87
4.87
4.61
China
4.74
5.10
5.17
5.57
6.22
5
Japan
5.11
4.73
4.07
4.20
4.55
Canada
4.01
4.08
4.17
4.43
4.62
6
Canada
3.19
3.46
3.54
3.65
3.64
France
4.62
4.52
4.82
4.66
4.12
7
Netherlands
3.50
3.48
3.53
3.48
3.32
UK
4.25
4.25
4.25
4.18
4.01
8
Italy
3.30
3.28
3.41
3.36
3.32
Italy
4.03
3.78
3.85
3.61
3.26
9
Hong Kong
2.82
3.05
2.58
2.37
2.57
Mexico
1.81
2.01
2.2
2.41
2.69
10
Spain
Taiwan (POC)
World Value (billion US$)
2.16
2.13
2.37
2.51
2.43
4,754
4,967
4,915
5,075
5,556
2.46
2.42
2.32
2.42
2.68
5,055
5,261
5,208
5,432
6,033
Source: Personal Computer-Trade Analysis System
percent share amounting to US $450 billion (Table 1). With respect to the ASEAN market, it is the second main destination of ASEAN exports next to the United States (Table 2).
it disinvested in the year 2000. The top three main destinations of Japanese foreign direct investments (FDIs) in the ASEAN are Thailand (37.4%), Philippines2 (18.4%) and Singapore (17%) (Figure 1).
development assistance (ODA) as per Japan’s ODA Annual Report for 2001. In the ASEAN, the Philippines' shares amounts to about 9.74 percent or US $304 million, which goes
Tariff structure 1 Source: UNCTAD, cited in Myrna Austria (2003), The Foreign aid Tariff peaks and escalation in Japan Philippines in the global trading environment: looking back and the chalenges ahead. Japan remains as the main source of exist not only in its labor-intensive 2 As of 2002, Japan has become the top foreign direct official assistance of the Philippines. manufactures but also especially in investor in the Philippines with about PhP17 billion of The latter is the 6th major recipient agricultural and food products. The the total approved projects, as indicated in the BOI of Japan’s total bilateral official import-weighted MFN average tariff website. of Japan is still high in footwear (17.4), Table 2. Ten main destinations of exports from ASEAN by country, 1993-2000 (US$ million) clothing (11.7) and leather and travel 1993 1996 1999 2000 goods (10.3).1 Country Value Country Value Country Value Country Value Elimination of high tariffs on these USA 42,008.20 USA 59,515.50 USA 48,047.70 USA 43,792.10 products would post Japan 30,952.20 Japan 43,150.30 Japan 29,120.80 Japan 41,571.10 great advantage to Singapore 18,353.90 Singapore 28,071.70 Singapore 23,767.10 Singapore 31,682.70 Philippine prodMalaysia 12,295.00 Malaysia 25,130.80 UK 14,617.90 Taiwan 12,337.60 ucts. UK
Investments Japan is the second largest investment source country for the ASEAN. Its total investment from 1995-2000 amounted to US $19,213.8 million albeit the fact that
Thailand
11,971.50
Thailand
11,546.20
Taiwan
8,932.50
UK
10,904.40
6,751.60
Taiwan
11,316.70
Hong Kong
8,043.70
Hong Kong
10,709.50
Germany
6,414.30
Germany
10,728.50
Korea
7,322.40
Korea
9,226.70
Taiwan
6,143.60
Hong Kong
10,571.00
Netherlands
6,885.30
Netherlands
7,092.50
Korea
6,125.90
Korea
9,446.70
China
5,645.10
China
6,836.60
China
4,528.70
UK
8,275.70
Germany
5,500.00
Thailand
6,697.90
Others
61,092.30
Others
105,608.20
Others
183,184.50
Others
208,907.20
TOTAL
206,637.20
TOTAL
323,361.30
TOTAL
341,067.00
TOTAL
389,758.30
Source: ASEAN Trade Statistics Database; covers only ASEAN 6. Notes: Exclude exports from Singapore for 2000. Thailand exports for 2000 cover only 1st to 3 rd quarter.
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DEVELOPMENT RESEARCH NEWS Figure 1. Japanese FDI in ASEAN, 2000 (%)
November - December 2003
Moreover, it could pave the way for the creation of the ASEAN-Japan Comprehensive Economic Partnership, and later, the establishment of an East Asian Free Trade Area. In terms of labor movements, an understanding of Japan’s motives seems to arise from pressing concerns over its aging population, stagnant economy, including the decline of its working population, and its weakening role in the region. To cope with these problems, the use of foreign workers is recognized as a potentially effective measure for Japan.
Source: ASEAN-Japan Centre
primarily to grants (48%) and technical cooperation (33%) rather than government loans(19%) (Table 3). Philippines’ importance as Japan’s partner in an FTA An FTA with the Philippines would give further impetus to Japan's access to a population of 76.5 million (2000) and a market valued at a GDP of US $74,730 million (2000).
The Philippines, for one, has a long tradition of sending Filipino nurses, therapists and health caregivers as well as professional IT experts overseas, including to Japan. An FTA will further enhance this especially because it is seen as a potential for promoting the use of Nihonggo
Table 3. Types and geographic distribution of Japan’s aid (2000), net disbursement basis ($ million) Country/Region
ASEAN Brunei Darussalam* Cambodia
Grant Aid Grant Aid Technical Cooperation 311.24
610.74
Total
Govt Loans
Total
921.98
2,204.42
3,126.40
-
0.19
0.19
65.32
32.35
97.68
1.53
144.6
-
0.19 99.21
Indonesia
52.07
196.67
773.43
970.10
Laos
74.13
35.05
109.18
5.69
114.87
Malaysia
1.14
61.2
62.34
-38.4
23.94
Myanmar
17.97
22.38
40.35
11.43
51.78
Philippines
57.58
99.52
157.09
147.39
304.48
Singapore*
-
2.92
2.92
-
2.92
Thailand
1.51
121.04
122.55
512.69
635.25
Vietnam
41.52
91.49
133.01
790.66
923.68
53.05
318.96
372.01
397.18
769.19
China
Source: ASEAN-Japan Centre *Countries graduated from ODA recipient status.
among Filipino workers, on the one hand, and for increasing the number of English-speaking professionals in Japan, on the other. This prospect has already been seen through the development of language-training centers in the Philippines. In terms of trade, Japan's net exports to the Philippines are primarily manufactures composed of chemical products, basic manufactures and machine transport equipments. Agricultural exports are quite modest. This could be explained by the high Philippine tariffs on agricultural products at an average of 16.33 percent. Certain quarters are of the opinion, however, that lowering the agricultural tariff would not necessarily lead to an increase in Japanese exports of these products. Current structure of trade and investment between Japan and RP Trade environment Japan is the second largest trading partner of the Philippines after the United States. It accounts for 14.72 percent of Philippine exports and 19.09 percent of total imports in 2000. On the other hand, the Philippines remains a potential market for Japan, cornering about 2.14 percent share of Japanese exports (ranked 12th) and 1.9 percent of its imports (ranked 13th). From 1991-2000, overall bilateral trade shows that the Philippines is a net importer of Japan. The gap or trade imbalance, though, has narrowed down since 1998. Export performance has improved and growth already doubled from 1999 to 2000. Major trade products Philippine exports to Japan are primarily electronic microcircuits, input or output units, parts of data processing machines, insulated wires, printed circuits, wood builders, diodes or transistors, gas oils, telecommunication equipment parts and
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DEVELOPMENT RESEARCH NEWS
fresh or dried bananas. The top imports from Japan are parts for the manufacture of electronic machinery; machinery and mechanical appliances; parts and accessories for electronic integrated circuits and microassemblies. Among the top 10 export and import products, only one agricultural product—the frozen prawn or shrimp—made it as a top export in 2000. Philippine exports are primarily electronic products and equipment; however, the industry is still limited to assembling type of products because most parts or components used for these exports are still being imported. Export goods profile Industrial manufactures dominate Philippine exports to Japan with about a 76 percent share in 2003. Classified as industrial manufactures are electronics, machineries, transport equipment and parts, metal manufactures, construction materials, chemicals and others like packaging. Food products captured seven percent of the market while food and food preparations as well as special transactions had seven percent each. Consumer and resource-based products got only five percent (Figure 2). The Philipines is also a top exporter of certain products to Japan. In the year 2001, it was the number one exporter of pineapples, bananas, wood carpentry, microperipherals and magnetic disk units.3 Most of these products where the Philippines dominates in the Japanese market have zero tariff. Even if faced by tariffs as high as 17 to 20/25 percent, agricultural products such as pine-
Major competitors in these products are China, Taiwan, USA, Malaysia, Thailand and Singapore. 4 Manzano, G. Forthcoming. Preferential rules of origin for the Japan-Philippine economic partnership: issues and prospects. Makati City: Philippine APEC Study Center Network. 3
November - December 2003
Figure 2. Total Philippine exports to Japan by major product groupings, 1999-2003
76%
2003 2002 2001 2000 1999
groupings 1999-2003 7%
CONSUMER MANUFACTURES 5%
7%
5%
FOOD AND FOOD PREPARATIONS RESOURCE-BASED PRODUCTS INDUSTRIAL MANUFACTURES SPECIAL TRANSACTIONS
source: DTI
Source: ASEAN-Japan Centre
apples and bananas were still able to dominate the Japanese market. Tariff structure Almost 80 percent of Philippine exports are faced with zero tariff.4 This is an indication that most of our products have free access to the Japanese market. However, there is still an opportunity to increase market access especially those with tariff rates ranging from one to five percent and 16-20 percent for most agricultural exports like bananas. On the other hand, Japanese exporters are faced with zero tariff for more than 50 percent of their products. A big proportion of Japanese exports to the Philippines are within the one to three and 6-10 tariff rate brackets. Philippines' comparative advantage The country's revealed comparative advantage in exports according to the Balassa formula shows that the country specializes in electronic components, IT and consumer electronics, and clothing. In the first two sectors, the Philippines ranks among the countries with the highest degree of specialization in the world. Market positioning Philippine exports to Japan can be categorized according to their market positioning which is based on the change of their market shares
from 1995 to 2000 (Table 4). High potential and competitive products are those where the Philippine share of Japanese imports is rising together with the share of that product to total Japanese world imports. Low potential but competitive products are those where the share of Philippine exports of certain products to Japan is increasing but the products’ share to the Japanese world imports is decreasing. On the other hand, lost opportunity products are those where the share of the products increases in the total world import of Japan but the share of Japanese imports from the Philippines of the same product is decreasing. Restructuring products are those where both the share of imports from the Philippines and the world are decreasing. Looking at the market positioning of Philippine exports to Japan, it can be seen that the country has been able to maximize the products where it has a comparative advantage, particularly in information technology (IT) products. However, there remains an opportunity of introducing into the Japanese market the country’s clothing and leather products. The share of high potential and competitive products over Japan’s
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DEVELOPMENT RESEARCH NEWS
November - December 2003
Table 4. Japan import share: Philippines vis-a-vis world
whose overall edge over the Philippines has become visibly wider.5
Share of Japan imports from the world Trend Share of Japan imports
from the Philippines
Rising (+)
Falling (-)
Rising (+)
Falling (-)
high potential and competitive (+), (+)
low potential but competitive (+),(-)
65 JICC*
16 JICC
58 % **
1.4 %
lost opportunity (-), (+)
restructuring (-), (-)
39 JICC
97 JICC
26 %
10 %
Notes: *4-digit JICC level **percentage of Philippine exports to Japan
total imports from the Philippines is only about 58 percent, majority of which are IT products and various parts and equipments. Lost opportunity products amount to almost 26 percent of total Philippine export to Japan. Products under this classification include electronics, telecommunications and machine parts as well as fresh or dried bananas. This does not necessarily mean the fall of these industries but it shows the opportunity for the Philippines to take advantage of the Japanese market by providing greater market access as well as product enhancement or promotion of these products. Low potential but competitive products account for 1.4 percent while restructuring products account for about 10 percent. Investment scenario Japan has become the top foreign direct investor in the Philippines. From 1998-2002, the cumulative total of Japan’s FDI in the country is about P57,788.80 million. This spells over to the economic zones where the Japanese dominates the number of firms at 41 percent (Figure 3). Approximately 20 percent of Japanese equity investments in the Philippines are in the power generat-
ing plants while 10.3 percent are in the vehicle parts and components sector. Japan’s total equity investments in the country amounted to an estimated P1.5 billion in 2002, with a labor generation of 1,094. This is exclusive of the foreign investments made in special economic zones such as the Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA) and Clark Development Corporation (CDC).
Identified as impediments to investments in the Philippines are the high production cost, restrictive state laws and poor investment incentives, prevalence of labor- management disputes, political instability, weak law enforcement and threat of terrorism. The question remains whether JPEPA could address some, if not all, of these impediments. Trade in services As of 2002, there were nearly 78,000 overseas Filipino workers (OFWs) in Japan. Although the number is increasing, the annual growth rate has decreased from 34.6 percent in 2000 to only 5.1 percent in 2002. Cash remittances, on the other hand, increased by P884 million from P3,005 million in 1998 to P3,889 million in 2002. Movement of natural persons Japanese travelers to the Philippines average about 372,000 yearly from 1997 to 2001. This figure is only about 10.3 percent of all Japanese travelers to the ASEAN region. It is hoped that provisions for free ) 16
Major impediments According to the Japanese Chamber of Commerce and Industry, the Philippines is losing the Figure 3. 1995-2002 locator investments Japanese investors to by nationality in Philippine economic China, Vietnam and zones Thailand due to the Ot hers former's high production American 2% 13% costs, labor unrest, and Korean poor law and order 4% situation. The latter Japanese Singaporean countries provide an 41% 5% orderly environment as German well as investment incen2% tives that are consistent Brit ish and reliable. In addition, 6% there are fewer labor M alaysian Dut ch disputes in these countries Filipino 1% 8%
Philippines losing Japan Investors: Business Group. Philippine Daily Inquirer, August 8, 2001. 5
17%
Taiwanese 1%
Source: Philippine Economic Zone Authority 2002
DEVELOPMENT RESEARCH NEWS
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November - December 2003
Courting the Japanese elderly: Prospects for the Philippines’ retirement and medical tourism industry*
W
hat describes a well-spent life? Perhaps, it is having the chance to enjoy a second life or a “full” life after years of working for the family, one’s self and others. All of us face an inevitable truth: that one day, we shall find ourselves nearing or in the sunset of our lives. But such years need not be spent in isolation nor idleness. For these are the years that one can make full use of his/her free time and engage in a new range of activities such as new hobbies, sports and even volunteer work. For those who can afford, the prospects of pursuing these activities abroad may even be considered. One country where a growing segment of its society has started to consider this lifestyle is Japan. With a population that is rapidly aging and with a relatively higher income than other countries to spend, Japan offers a special market with accompanying opportunities for other countries—with the appropriate resources available—to explore and tap.
* Culled and recast from “Developing the Japanese Market for Philippine Tourism and Retirement Services: Prospects and Impediment” by Winston Conrad B. Padojinog and Maria Cherry Lyn S. Rodolfo, a paper presented for the Japan-Philippines Economic Partnership Agreement research project being coordinated by the Philippine APEC Study Center Network - Philippine Institute for Development Studies (PASCN-PIDS).
For the Philippines, in particular, in light of the ongoing economic partnership agreement negotiations between its government and the government of Japan where barriers to trade and investments in a number of economic sectors, including tourism, are being proposed to be removed, the abovementioned phenomenon offers a multitude of opportunities to make the most of its comparative advantage—skilled and compassionate labor—and to fully explore yet untapped potentials for developing a
retirement and medical tourism industry. Japan as a tourism market With a relatively large number of households earning above US$50,000 per annum and a per capita income of US$33, 333, Japan is a huge market for tourism possibilities. In fact, for Asia-Pacific alone, Japan’s outbound travel has averaged about 20 million per year since 1999. The average Japanese typically loves to travel and usually spends winter bonuses on leisure and travel. His/
Japanese life expectancy has so improved that the number of citizens belonging to the 60 years and above bracket is expected to be the highest in Japan by the year 2025. Asia Pacific Perspectives: Japan+ (June 2004)
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DEVELOPMENT RESEARCH NEWS
her average spending per trip is estimated at US$1,750. Today, Japan ranks as the second largest tourism market of the Philippines, accounting for 17 percent of total visitor arrivals to the country. Tourists come mostly from Tokyo, Osaka and Nagoya, and travel for leisure (62 %), business (19 %) and visiting friends and relatives (10%). Most frequently visited places are Tagaytay in Cavite, Batangas and Cebu. At present, only less than one percent (0.60 %) of total visitors come from the ranks of retirees or pensioners. This number, however, may be expected to rise in the coming years as Japan’s population, as mentioned earlier, continues to rapidly age. Assessing Japan’s silver market In 2002, more than 20 million Japanese were aged 60 years old and above. And because life expectancy has so improved, the number of Japan’s citizens belonging to this age bracket would increase even more in the next few years. The average life span of a Japanese individual was 77 years for male in 1999 and 84 years for female in the same year—the highest life expectancy rate in the world. At the rate in which its demographic structure is changing, the number of people aged 60 years old and over will be the highest in Japan by year 2025 (two other countries experiencing the same demographics are Italy and Germany). Moreover, out of the 124.1 million population projected in Japan in 2020, around 27.8 percent will be 65 years and older while the growth rate in the age brackets of 0-39 years will be negative. Given these trends, the Philippines must double its efforts in tapping this Japanese elderly or silver market for its tourism industry. To be able to
November - December 2003
plan for the wooing of this market, though, it will be useful to divide or segment the Japanese silver market into certain categories based on their needs, as follows: ✦ Retiring individuals. These are the people 50 to 55 years old who are in the process of winding down their active professional life and contemplating what retirement plans they wish to pursue; ✦ Retired individuals. These are the people aged 56 to 75 years old, some of whom have opted to maintain a schedule of social activities while others are relatively idle; and ✦ Retired elderly. These are the people aged 76 years and older and are the least active and have less capacity for independent existence.
What are the trends in Japan with regard to the needs and lifestyles of these various market niches? Overseas multihabitation Many Japanese elderly remain active even after retirement, taking such post-retirement period as an opportunity to enjoy a second life where they engage in activities that they have always wanted to do before but did not have the free time to do so or in a new range of activities such as
sports and artistic pursuits. In recent years, the practice of overseas multihabitation (retirees’ pursuit of an alternative way of life abroad) among these retirees has become quite attractive. Table 1 shows these preferences in overseas lifestyle of the Japanese retirees. Statistics show that there are currently more than 800,000 Japanese on long stay abroad, with 20 percent vacationing mostly in China, Singapore and Thailand. In the Philippines, there were about 10,137 Japanese officially residing in 2001, making the country the eighth most popular destination in Asia. What makes them stay? How do the Japanese choose their retirement destination? Their decision is said to be dependent on their assets and pension revenue, marital status and relationship with spouse and children, as well as visa rules and regulations in the country where they wish to travel or to stay permanently. There is now a trend for the Japanese elderly to depend on public pensions as their main source of income after retirement. Because of its dwindling funds and the possible bankruptcy of its national pension
Table 1. Lifestyles of Japanese seniors (Categories of overseas multihabitation) Long stayers
Retirees who live in Japan during their “second life” but travel abroad on extended vacations.
Migrant retirees
Retirees who live in Japan during spring and summer and like birds, often travel to tropical countries during autumn and winter.
Immigrants
Those who opt to migrate to or be a permanent resident of another country, and return to Japan periodically.
Source: Hiroyoshi Ono, “The Philippines as Retirement Haven for the Japanese,” University of Asia and the Pacific, 21 March 2002.
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DEVELOPMENT RESEARCH NEWS
system by the year 2010, Japan, however, is currently implementing some reforms in its pension funds program which might, in the future, affect the amount of pensions received by Japanese retirees. Notwithstanding this, the fact remains though that the Japanese pension—at an average of US$1,800 per month—is one of the highest in the world. And staying abroad where the cost of living is relatively cheaper will certainly take such amount ( or an even lesser amount if affected by the planned reforms in the Japanese pension fund system) quite far. In terms of family relationship, the trend for the Japanese elderly to remain living together with their children, albeit still extremely high compared to other countries, is waning, as seen in the decline in the ratio of living together, from 68 percent in 1975 to about 55 percent in the 1990s. Other factors also influence the Japanese elderly’s choice of destination: familiarity with the foreign country, peace and order situation as well as cost of living in the destination country, distance from Japan, English-speaking population, and natural beauty of the foreign country.
The preferred activities of this market are trips that allow them to have a pleasant time and enjoy the natural scenery. Historical and architectural tours are also popular. Meanwhile, for those aged 55-64 years, ecological tours have also proven to be attractive since these are the individuals who are still relatively strong enough to bear the physical strain involved in such tours. Cost of medical care and long-term care services By nature, older people are more prone to sickness and thus require regular medical check-ups or special medical attention. The cost of living and medical care in Japan is one of
November - December 2003
graphic and economic changes that are shaping. Given this scenario, foreign destinations have begun to develop their domestic markets to entice the Japanese retirees to choose them as their retirement havens. The regional offers How do countries like Singapore, Thailand and Malaysia try to woo the Japanese elderly market? What programs have they launched? Below is an overview of the efforts in these countries to boost their retirement and medical tourism industry.
Table 2. Factors affecting Japanese retirees’ choice of retirement location Safety Natural beauty Promptness Conducive environment Friendliness of local population to the Japanese Others (not specified) Source: Tourism Authority of Thailand
In a study by the Tourism Authority of Thailand (TAT), safety and security ranks first in the elderly’s choice of a foreign place to stay, followed by availability of medical services, language consideration, and beauty of the place (Table 2).
the highest in the world. As such, for the elderly who usually depend on monthly pensions for their upkeep, it is but natural for them to seek for more affordable medical care and services. Often, this may be found overseas, especially in Asian countries like Thailand, Malaysia and the Philippines, where medical care is less costly and where the Japanese retiree’s pensions may go a long way.
The increase in the number of Japanese elderly tourists in various foreign country destinations has given rise to certain kinds of products and services being packaged and offered in these countries. Many offer activities that involve walking, hiking, cultural activities and nature.
Moreover, as noted earlier, the ratio of living together among Japanese families, though still very high, has been waning through the years. The basic Japanese belief that children— especially women—should take care of their aged parents is beginning to take a back seat given the demo-
Singapore Singapore was the only country in the region in the past known for its 40.2% state-of-the-art hospitals. 12.9% An estimated 150,000 foreign patients sought 7.9% treatment in Singapore 7.6% in 2000 and spent about 7.4% S$345 million a year in 24.0% healthcare expenditure. However, regional competition has intensified with the aggressive marketing of Thailand as an alternative and cheaper destination for medical tourism. To counter this, Singapore has packaged its image as a destination that has set high standards for quality healthcare. It plans to lead over its competitors in terms of medical expertise rather than just price. It also aims to establish one-stop centers in key regional markets to make it more convenient for patients to go to Singapore. Thailand After its successful Visit Thailand Year tourism campaign in 1997, Thailand’s tourist arrivals zoomed and its products became very popular. However, Thailand was not able
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http: //www.asiancenterhospital.com Filipino caregivers are naturally friendly and cheerful, making the country a perfect place to stay for the retirees.
to generate higher revenues from the high volume of visitors because the latter’s average length of stay was quite short and their per capita spending was not high enough. This is probably because low-priced and short tour packages, which prevented tourists from enjoying other attractions and staying longer, were the types of offer widely promoted. As a result, and in order to achieve economic sustainability, Thailand has decided to attract more longerstaying and higher-spending tourists. The retirees therefore became a natural market to attract. Working in tandem with a number of official departments, the Tourism Authority of Thailand (TAT) soon developed a long-stay program where long-stay providers such as hotels, condominiums and service apartments began converting their premises to accommodate this kind of visitors. And as previously noted, it had begun to challenge Singapore as a hub for medical tourism by offering medical services at prices 50 to 70 percent lower than those charged in Singapore. Medical tours are now readily available and promoted in the TAT’s website. The TAT also regularly
organizes a health travel mart which brings around 150 tour operators from Asia and Europe as well as journalists to see the best of Thailand’s hospitals. Tour operators, on the other hand, offer various packages that combine medical procedures like liposuction with visits to the beach or boat trips. Malaysia The website of the Association of Private Hospitals of Malaysia promotes Malaysia as the preferred health and medical destination in the region because of its Englishspeaking medical staff, its harmonious plural society practicing a variety of religion, affordable hospitalization costs, highly trained medical specialists, accessibility to major international airports, comprehensive network of hospitals and clinics, and an array of wellness packages.
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Malaysia is now being promoted as “My Second Home” and a renewable Social Visit Pass can be granted to any person who fulfills certain criteria to stay in Malaysia as long as possible for an initial period of five years. Japan is Malaysia’s second largest tourism market. It has now also become a major target for Malaysia’s health tourism programs. What can the Philippines offer? In the face of these regional marketing blitzes to promote their respective countries as retiree and medical tourism havens, what has the Philippines done? Actually, it may be said that the Philippines has long foreseen this potential in the retiree and medical tourism industry. In fact, as early as in 1985, the government, through Executive Order 1037 signed by then President Ferdinand Marcos, created the Philippine Retirement Authority (PRA) whose main purpose was to adopt an integrated approach in the development of retirement communities. Only the Philippines has a dedicated government agency to develop and promote the Philippines as a retirement haven because in other countries, retirement programs are under the tourism authorities. In 2001, President Gloria Macapagal-Arroyo placed the PRA under the supervision and control of the Board of Investments by virtue of Executive Order No. 26 to enhance its efforts to attract additional investments.
...The Philippines has long foreseen this potential in the retiree and medical tourism industry...The Philippine Retirement Authority (PRA) whose main purpose was to adopt an integrated approach in the development of retirement communities.
DEVELOPMENT RESEARCH NEWS
A year after, PRA was renamed Philippine Leisure and Retirement Authority (PLRA) to reflect its thrust of encouraging foreign nationals to try the Philippines as a leisure destination and eventually as a retirement place. The country also revived its relationship with the Long Stay Coordinating Committee in Japan when it signed a Memorandum of Agreement (MOA) that involves partnership and cooperation in marketing and facilitation for the entry of Japanese nationals. One of the programs reviewed was that of the Extended Leisure Stay Abroad (ELSA) of the Japanese government.1 To address the lack of retirement villages and facilities in the country, the PLRA embarked on negotiations with existing leisure communities where retirement facilities can be established. It also signed various memoranda of agreement with the Department of Tourism (DoT) to undertake a marketing campaign and the Bureau of Immigration to implement “look and see” programs of varying durations.2 The PLRA likewise signed agreements with the DoT and the Bureau of Immigration to allow foreigners registered as participants in the program of the PLRA to stay for at least 31 days in the accredited accommodation facilities. The Bureau of Immigration’s Special Resident Retiree’s Visa has been merged with the Board of Investment’s Special Investor’s
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Resident Visa to produce the IR2 Visa or Investor and Retiree Resident Visa, which awards holders with a permanent nonimmigrant status with multiple entry privileges as well as exemption from exit and entry clearances and exemption from custom duties and taxes on imported
culture, the natural resources and the cost structure to make various destinations within the country as real havens for the retirees. For instance, in terms of manpower resources alone, the Philippines’ educational system churns about
http://www.plra.gov.ph
The Special Resident Retiree’s Visa (SRRV) is a special resident, nonimmigrant visa with multiple entry or indefinite stay privileges and benefits.
personal effects such as appliances and furniture. Through the years, however, the Philippines has been challenged and overtaken by neighboring countries in capturing this market because of the latter’s aggressive marketing efforts as well as their well-developed programs. Nonetheless, the Philippines has the necessary resources that can enable it to tap into the Japanese retirees market. It has the manpower, the
The ELSA is a Japanese government program that encourages private companies to send out their employees who will retire in three to five years at company’s expense to countries with ELSA tie-up for a vacation period of three to six months. The ELSA replaced the Silver Columbian Plan, a scheme based on research that calls for the old Japanese people to be sent out of Japan to spend their aging years in other countries, particularly Spain which was then the leading retirement destination. However, it was said that the Japanese elderly and their Spanish caretakers did not hit it off well, thereby eventually making the Japanese return voluntarily to Japan (Salaya, 1989; Ono, 2002). 2 The “look and see” programs aim to attract foreigners (who do not have the money to invest) as retirees. The programs provide different options: a tour package of one week, a short visit of one month, or an extended stay for one year. These aim to give visitors a taste of Philippine lifestyle without pressuring them to invest immediately. 1
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300,000 to 400,000 graduates every year, 21 percent (about 21,000 to 28,000) of which come from medicalrelated degrees. The abundance of medical service providers in the country is attested by the endless stream of nurses, physical therapists and caregivers from the Philippines leaving for abroad to work there. If retirees from other countries like Japan will stay in the Philippines, then these medical service providers need not apply for work overseas and leave their families. Jobs for them would be available domestically. Moreover, the compassionate, cheerful and hospitable disposition of the typical Filipino makes the country a natural haven for care giving and other related services to the elderly who require special care. At the same time, the quality of treatment and competence of the Filipino medical people, especially doctors, is well recognized, thereby
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making available high-quality but affordable levels of medical care in the Philippines. Addressing barriers and opportunities Still, there are areas or aspects that must be given more attention by the Philippines if the country is to be more competitive in developing and promoting its retirement and medical tourism industry.
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belong to the 65 years old and above age bracket. It can also target those who are close to retirement or have opted for early retirement like the working professionals and executives aged between 45 to 65 years old, including their family members. They are often referred to as “retirables.”
Foreign ownership of land in both Japan and the Philippines, however, is prohibited. In this regard, one option for attracting long-staying Japanese retirees is to provide accommodations under long-term or perpetual lease arrangements. This is similar to the apartment user’s arrangement where his/her payment depends on the length of stay, location, amenities and other services provided.
Overcoming cultural barriers Caring for a retiree, especially for the elderly, entails close cultural interaction between the caregiver and the retiree. Usually, the problems and weaknesses that may take place in caregiving are cultural in nature. This involves the lack of effective communication between the two parties brought about largely by the caregiver’s little understanding of the Japanese language and the misinterpretation of certain actions and behaviors shaped by cultural nuances on both sides.
There are a number of idle and unsold but highly developed properties that can be transformed into retirement villages or subdivisions. Idle housing subdivisions may not also be the only beneficiary of the retirement industry. Vertical housing structures or residential condominiums can also be sold to the “retirables” for they are more active and require minimal nursing care or medical attention except some regular diagnostic tests. The standards of the facilities of these residential subdivisions and condominiums and their amenities can be conformed to the standards set by the PLRA.
Strengthening the coordination among affected parties To be able to compete for a niche in the retirement and medical tourism industry, there is a need to strengthen the coordination among the private sector players in the industry. At the moment, the Philippines does not have any medical tourism package in the likes of what Thailand and Malaysia are offering. For one, the country’s tourism industry is still fragmented at this point. Coordination between travel agencies and medical facilities is wanting.
In view of this, the training curriculum for caregivers must include programs for basic languages, culture practices, norms and values. More professional training courses should also be given to service providers like facility design, food preparation, culinary arts, and tourist guides.
More importantly, sizes of housing units in the country are more spacious than in Japan and lower in price. Even the continuing weakening of the Peso against major currencies can make real estate properties in the Philippines more affordable to a Japanese retiree or visitor as shown in Table 3.
At the same time, it is important to involve local government units and local communities which are positioning their localities for tourism prospects by increasing their awareness about these programs and possible investments. In this regard, dialogues with them should be part and parcel of any government ) 15
Taking advantage of real estate opportunities One area which the Philippines should take advantage of in its bid to promote the country as a retirement haven is in real estate. Retirement homes are traditionally associated with clusters, nursing homes and villages. However, the retirement home market is not only focused on the elderly who
Table 3. Comparative real estate housing size and rates in the Philippines and Japan Comparative Housing Statistics
Japan* Size (In Sqm)
Philippines* Price (US$/Sqm)
Size (In Sqm)
Price (US$/Sqm)
New Condominium Sale
50-70
3,900-4,100
40-300
730-1,820
New Detached Unit Sale
80-92
3,000-3,300
140-500
545-900
Daily Apartment Rental **
40-100
54-211
50-150
40-113
Notes: * Rates in Central Tokyo and Makati were basis for the highest priced or luxury units. Konsai and Cavite property markets were used for the lower priced detached units. Exchange rates assumptions used are ¥108.9/US$1.0 and PHP55/US$1.0 for Japan and Philippines, respectively. ** Based on the lowest and highest monthly rates of full serviced apartments in Central Tokyo and Makati
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M
any countries have made giant strides in their industrial and manufacturing sectors as a result of having a wellcrafted and developed science and technology (S & T) policy. The importance of having a wellformulated science policy is premised on the fact that human and natural resources for utilization in science are limited while problems to be tackled by science are numerous and enormous. Adoption of judicious and visionary policies in science is therefore essential for a poor country with scarce resources like the Philippines in the face of an urgent need for knowledge that could bail us out of poverty. The policy will guide the choice of scientific studies and undertakings to pursue. Photo taken at the Philippine Coconut Research and Development Foundation (PCRDF), Pasig City
Science policy can serve as guide in making decisions for science, in the prosecution of science, and on the public use of science-based products. Decisions for science, for instance, may concern areas of investment in science such as support for science establishments, setting of goals for science for the national government, and undertakings of cultural or non-economic tasks such as search for life in other parts of the universe. These decisions may be made by fund-dispensing institutions such as government, private foundations and international organizations. Decisions in the prosecution of science, on the other hand, are concerned with the choice of * Abridged version of a paper titled " Some Aspects of Science Policy in the Philippines" written by the author. ** National Scientist, Professor Emeritus, Institute of Biological Sciences, College of Arts and Sciences University of the Philippines-Los Ba単os.
Making science policy work in the Philippines* research problems, selection and organization of personnel to undertake a task, mustering of resources, and choice and development of promising colleagues, among others. These functions are the responsibilities of heads of agencies and leaders of groups. Decisions on the use of sciencebased products for and by the masses, meanwhile, are those that involve products which have, of late, permeated and even dominated the activities in modern society. These science-based products have helped people increase their performance and capacity.
Jose R. Velasco, Ph.D.**
The use of science-based products by the masses has both positive and negative aspects. On one hand, public patronage encourages scientists to exert more effort to search for new knowledge and invent new products. Patronage stimulates the economy. Thus, manufacturers make millions or billions in the business of producing and marketing science-based products. Trade then proceeds and progresses swiftly throughout the world.
DEVELOPMENT RESEARCH NEWS
On the other hand, there are a few concerns on the use of sciencebased products for and by the masses: one, the excessive use of rare and scarce minerals and other natural resources in their production can cause these raw materials' exhaustion; two, the byproducts of manufacture—the rejects and junks —can cause pollution; three, some products of mass destruction (e.g., atomic bomb, missiles, poisonous chemicals, and disease-causing microbials) can cause mass killings when used in war; and four, advanced genetic engineering can produce somatic clones, stem cells, and genetically modified organisms that may modify humans and the human environment. The leaders of society and government officials are thus obligated to regulate the use of such sciencebased products. The use of science-based products also has effects on the economies of underdeveloped countries like the Philippines. For example, a big chunk of foreign exchange is used up in the importation of such products, which are mostly foreignoriginated, for the consumption by certain sectors of the public. The consumption further reaches a larger scale as the products become more valuable for people because they begin to consider them as necessities and not simply as status symbols. Among the products that have captured the eyes of the masses in recent times include wrist watches, transistor radios, privately owned vehicles, TV sets, calculators, computers and currently, cellular phones. Through direct and indirect advertisements in the mass media, businessmen are able to stimulate the desire of the masses for these products by extolling them as symbols of status and then
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Helping the country land in the map of the industrial world, the semiconductor industry is one of the strongest sectors in the Philippine economy.
promoting them as necessities in daily existence. To mitigate and cushion these effects, underdeveloped countries may have to adopt some measures of impeding the injudicious use of science-based products. These socalled hedges1 may be in the form of import quotas, tight bank credit for imports, luxury taxes, prestige taxes (similar to sin taxes) and other means of control. Crafting aspects of a science policy The process of selecting which aspect of science policy to adopt is rather intricate. It usually involves exchanges of opinions among colleagues who are deeply concerned over advancing the welfare of their country through science. Opinions may differ; and a debate
1 Even the more advanced countries adopt some form of hedges. For example, the Australian government limits the consumption of gasoline and other petroleum products (which it does not produce) by prohibiting public transport from plying its route outside of certain prescribed hours.
may ensue before arriving at a compromise or consensus on what science policy and which of its various aspects to promote. However, it is sad to note that debates have not taken much root within the country's science culture. Unlike the practice in politics and government, the Filipino scientists do not generally make a critique on the opinion or work of others. Apparently, they are apprehensive in possibly hurting the feelings of colleagues and in producing more heat than light because of the arguments. A likely alternative given to a colleague’s opinion or work, as one's indirect expression or estimation of his work, is a silent treatment. A few topics which may be subjects of debate among science policymakers include: a) the so-called bandwagon mentality, b) issues for and against academic freedom,
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One definition of an educated person such as a scientist is that he knows something about everything and everything about something.
c) scholarship programs in science and technology, d) national science and technology development plans, and e) accountability among scientific personnel. For this paper, the author simply puts his thoughts on the bandwagon mentality and how it may play a role in the dynamics of science policy decisionmaking. Redirecting the "bandwagon mentality" toward a positive note One definition of an educated person such as a scientist is that he knows something about everything and everything about something. However, in certain instances, some scientists tend to jump on the "bandwagon" in order to learn more about something new. When there was a "bandwagon" for knowing more about the possibilities of atomic science, for instance, the Philippines went on to establish an atomic reactor. Then, there were bandwagons for learning the virus aspect of the cadang-cadang disease of coconut, concern for the environment, information technology, genetically modified organisms, and others. These were discussed in various advocacy fora and became the focus of foreign-assisted projects and the mass media. Of course, there is nothing wrong in these especially because there is indeed a need to understand and know more about something new. Moreover, no one would want to be a Rip van Winkle in the 21st
century, and would thus certainly want to be updated. However, in shifting listlessly from one bandwagon to another, the tendency is to sway like “a field of grain in a gust of wind.” The “gust of wind” may be a token grant of foreign aid, a hard and soft sell in the mass media, or a considered advice of a foreign official who professes friendship with the country. Perhaps the country's intellectual leaders should, on their own, conduct critical discussions on the merits of an introduced bandwagon, and on the basis of national interest and capabilities, determine whether or not to ride the "current" band-
Elderly from page 12
plan to promote the retirement and medical tourism industry. Conclusion Finally, over and above the country’s genuine capacity and capability to provide what is needed to serve as a real retirees’ haven for Japanese nationals, it is important that a solid cooperation between the Philippines and Japan is forged in order to identify areas where possible tourism opportunities for this special Japanese market may be developed.
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wagon. And instead of spending a bulk of the country's resources in riding on a bandwagon, decisionmakers should perhaps decide on what field of study would be most beneficial to the country, focus on it and create it as the Philippines' own bandwagon. This is something that was done, for example, by Park Chung Hee, president of South Korea. Foreseeing the great demand for motive power in the developing countries of Southeast Asia, he husbanded a bandwagon for the manufacture of motor vehicles and power equipment. To do this, he “pirated” outstanding Korean metallurgists in Europe and America. As a result, Korean machineries today have become a familiar sight all over the world. The same may be done in the Philippines but there must be a truly inspired decisionmaker with clout who can start a bandwagon on a well-crafted science policy and lead it toward success. ❏
On its part, the Philippines, for a start, has to address the basics: the peace and order situation in the country, cleanliness and hygiene of host destinations, and marketing and promotional efforts of the concerned players. In addition, the issue of an opening up of the air access between Japan and the Philippines must be seriously looked into. In sum, the Philippines should shape up in the race for the huge Japanese elderly market. Or else, the country will just retire the fight to its more aggressive and proactive Asian neighbors. ❏
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movements of natural persons would boost domestic tourism and increase our share of Japanese travelers.
look at the differential impacts between gainers and losers must be undertaken. Moreover, safety nets must be put in place so as to minimize, if not totally eliminate, these negative effects.
On the other hand, there have been 124,072 visitors to Japan from the Philippines. Of this number, only about 11 percent have business transactions. It is expected that business travels would increase through the Japan-Philippines Economic Partnership Agreement(JPEPA) provisions which will target business visitors, intracorporate transferees and investors.
In terms of tariff, Japan has more to gain because the Philippines has higher rates in general that cover more goods. The potential net positive impact on the Philippine economy may be minimal in this regard. Nevertheless, the impact becomes significant under the capital movement simulation and more so, with productivity assumption. The prevailing question would be how to make this happen.
Conclusion Taking into consideration the Philippines’ agenda and objectives of reforms toward global competitiveness, sustainable growth, efficiency in allocation, and poverty alleviation, it can be said that, on the whole, a bilateral agreement with Japan would provide a potential net positive impact on the economy.
The need for the enhanced features of the economic partnership agreement to bring the potential benefits cannot be overemphasized. These concerns transcend market access issues involving tariffs.
JPEPA from page 6
However, this does not mean that the Philippines could already discount the possible negative effects or tradeoffs in some specific sectors. A closer
The provision on movement of natural persons is also of paramount importance. This is not only because of the expected increase in remittances of contract workers abroad but also because it provides a venue for technological transfer and cooperation, which would later
2003 Policy Notes PN 2003-01 Where are the benefits of foreign bank liberalization? PN 2003-02 Population: does it matter? revisiting an old issue PN 2003-03 Lack of consensus characterizes philippine population policy PN 2003-04 Population and the fight against poverty PN 2003-05 Policy lending for LGUs: an innovative financing instrument for local governments PN 2003-06 Microfinance promise: to provide access to financial services PN 2003-07 Developing the policy and regulatory architecture for microfinance in the Philippines
improve the competitiveness of Filipino human resource. Of equal importance to market access and trade liberalization is trade facilitation. The use of ICT, simplified procedure and conformity to international standards in customs clearance procedures, prohibition of performance requirements, mutual recognition agreement as in the case of conformity assessment procedures, provisions on paperless trading and provision on technical support for SPS would not only reduce delays in cross-border transactions but would also facilitate and encourage trade between the two countries. There is also a need to focus on the Philippines' adjustment and other measures to maximize the country's benefits. This is where the provisions on technical cooperation and capability-building become crucial. The means to address this is through exchange of information and training, and the development of ECOTECH programs covering investments, HRD, science and echnology. Possible ECOTECH Programs would be in agriculture, SME development, health care sector and the retirement industry.❏
PN 2003-08 What we have and don’t have…is it enough for global competition? PN 2003-09 East Asian currencies: is there room for (further) appreciation? PN 2003-10 “No” to policy reversal: backsliding in tariff policy can do more harm than good PN 2003-11 Who benefits from the tariff reforms? PN 2003-12 Doing it right for tax administration reform: (semi-) autonomous revenue authority anyone? PN 2003-13 Cancun and its aftermath: what does it mean? PN 2003-14 Property rights in land reform areas PN 2003-15 Household poverty: addressing the core of microfinance PN 2003-16 Efficiency and gender concerns: issues confronting the Philippine credit cooperatives PN 2003-17 The insurance industry in the ASEAN5 economies: tapping its potential