Project Brief INVESTMENT CLiMATE | WORLD BANK GROUP 90716 Public-Private Dialogue Helps Steer Agribusiness Reforms in the Philippines Project At A Glance Results and Impacts Country/Region THE PHILIPPINES/EAST ASIA PACIFIC • Organized a high-level working group Product InDUstRY-Specific InVestMent CliMate/ that discusses and proposes policies AGRiBUsiness on agribusiness competitiveness. Theme PUBlic-pRiVate DialOGUe • Identified three focus areas for A public-private dialogue in partnership is informing discussions policy reform: agricultural finance, and stakeholder consultations on agribusiness-related trade international trade facilitation, and shipping and logistics. logistics and transport systems in the Philippines. The system reforms aim to help small farmers and agribusinesses gain better • Completed an analysis of the access to trade markets. Trade logistics reforms are expected to domestic shipping sector that generate $12 million in private sector savings, while reforms to identified key pro-competition help make shipping more competitive are expected to generate regulatory reform opportunities. $9 million in investments by 2018. • Completed an analysis of trade facilitation issues, resulting in focused risk management in quarantine and inspections of import and export of Context agricultural products. Agribusiness is a critical sector of the Philippine economy. It employs almost 35 percent of the national workforce, a total of over 11.5 million people, but contributes to a mere 18 percent of the gross domestic product (GDP). Similarly, the overall agribusiness value chain employs nearly half of the workforce but accounts for 35 percent of IN PartNErship With CanaDa World Bank Group GDP. While the sector is critical to livelihoods and poverty • Working with the Department of Agriculture in alleviation, low productivity and lack of competition developing a more efficient and risk-based agri-trade persist, confronted by the twin challenges of: system focusing on interventions both at and past the • Increasing internal demand due to a growing border. population and related food safety issues. • Working with the Department of Transportation and • Unrealized export potential of agribusiness products. Communications in simplifying the permit process and promoting pro-competition regulations in domestic Growth has declined from 4.9 percent in 2007 to negative shipping. 0.5 percent in 2010, while employment levels have • Working with the National Competitiveness Council remained relatively steady. The Philippines’ share and (NCC) in convening dialogues and stakeholder value of exports is among the lowest of the Association consultations to inform policy solution design and of Southeast Asian Nations countries. The sector’s advocacy in support of the trade and logistics reforms. importance, overshadowed by its underperformance, indicates considerable potential for its increased contribution towards inclusive economic growth, rural development, and poverty reduction. Our Role A dynamic and efficient agribusiness sector will be an important driver of growth for farm and rural nonfarm sectors in the Philippines considering that agribusiness contributes to 35 percent of the GDP (and rising) and two-thirds of national employment. Investment climate teams of the World Bank Group have been supporting the Philippine government to streamline trade and enhance transportation and logistics services by: “Building up the competitiveness position of a country takes time, and one can expect progress Through the NCC, the World Bank Group continues to to move at a modest pace at the outset. On the use public-private dialogue as a cross-cutting tool for other hand, it is possible to make relatively quick stakeholder engagement and discussions of policy and improvements…especially if there is consensus regulatory reforms. The NCC is a public-private body that on which items to focus on, and if the proper convenes public and private sector consultations around resources are put to bear on the problem.” issues related to the country’s competitiveness. The Bank GUILLERMO LUZ Group supported the formation of an agri-trade logistics Private Sector Co-Chair working group, designed to focus on key reform areas in National Competitiveness Council agriculture and trade. Contact Hans Shrader | Senior Operations Officer | Investment Climate Email: HShrader@ifc.org | TEL: +63-2-465-2700 | www.wbginvestmentclimate.org