Philippines Australia Ministerial Meeting 3

PABC Talking Points for PAMM 2011

Canberra 15 June 2011

Enhance Bilateral Trade
The Philippines and Australia share much in common, and mutually capitalizing our complimentary resources may enhance bilateral trade and investment. The elements that our two countries have in common – adherence to democratic government, compatible educational system, the English language, and Christian religion provides a basic framework to do business.

It is well documented that the Philippines as an investment destination has a pool of skilled, English-speaking, cost-effective workforce not just in BPO and call centers but also in mining, tourism, agriculture and fisheries, resources that are primed for development.

Australia in turn enjoys a well developed, state of the art food processing, agricultural practices, mining technologies and tourism standards and practices that obviously will complement Philippine resources.

ASEAN Australia New Zealand Free Trade Agreement (AANZFTA)
The PABC was fully supportive in the advocacy to generate support by the private sector of the AANZFTA and affirmed agreement for adoption with the Philippine government.

The agreement now places Philippine exporters in more level playing field with regards to exports to Australia on similar product categories versus other ASEAN countries.

Economic Development of Mindanao & Regional Security Issues
The PABC continues to suggest to the Philippines and Australia governments that the bilateral cooperation focus a greater proportion of the delivery programs and projects in Mindanao to achieve maximum economic gain, social effectiveness and cross cultural benefit in the region.

An economically stable and vibrant Mindanao is the best deterrent against terrorism and insurgency activities that may be “based” in Mindanao, with spillover effects to neighboring countries, including Australia.

Mindanao has much to offer – mining, agriculture, and fisheries opportunities – aside from a “trainable” and cost effective workforce. Hence, the economic development of Mindanao, which inevitably leads to peace and security in the region, is mutually beneficial to the Philippines and Australia.

RORO / Strong Republic Nautical Highway (SRNH) & its Strategic Linkage with BIMP EAGA & Northern Territory and Adelaide Darwin Railway.

The PABC continues to strongly support the development of the nautical highway trade route, as it will spur economic development in the countryside. Presently, the cost of transport for trade and agricultural products from Luzon to Mindanao and vice versa is quite expensive and inefficient. The RORO/SRNH aims to link the island provinces through an efficient transport system that will enhance access to tourism areas throughout the country and offers an alternate route for the flow of agricultural products at a lesser cost.

Further south beyond Mindanao is the BIMP EAGA region and its close proximity to Northern Territory now serviced by the Adelaide Darwin railway.

In addition to the common markets of BIMP EAGA, there exist and opportunity for Philippine exporters to tap into non-traditional markets of the Pacific Island nations.

SEE ATTACHMENT A

Skills Replenishment
The worldwide demand for Filipino skilled workers over the last decade has significantly depleted the Philippine skill base. Given the current trends, it is only a matter of time before the Philippines becomes a drained resource of qualified technical and professional manpower.

The PABC continues to champion the notion that Australia and other foreign governments contribute toward the training of Philippine-based tradesmen/skilled workers to ensure that they acquire the same standards as those who leave the country for migration to Australia and other countries. This will ensure a continuing source of manpower with standardized skills and does not drain the Philippines of skilled tradesmen, critical for our own economic development.

It is prudent for Australia to recognize the value of a skillful Philippines in order to preserve the incumbent symbiotic relationship currently enjoyed by both. Failure to react to the depleting resource could see Australia not only competing with other developed countries
for the prime Filipino manpower.

Education
The PABC continues to lobby for equivalency of Philippines and Australia education in academic, vocational and technical qualifications.

PABC and the Private Public Partnership (PPP) Program

The PABC is fully supportive of the PPP Program as it seeks to encourage investments between the Philippines and Australia, and believes that the PPP program is an initiative that potentially enhances the accomplishment of this objective. The PABC position paper on PPP is tabled for more detailed discussion.

SEE ATTACHMENT B

Investment Opportunities in Philippine Tourism

The PABC strongly supports the Philippine Dept. of Tourism (DOT) National Tourism Development Plan (NTDP), which is a strategy and road map to guide the country in developing and promoting tourism up to 2016.

The Tourism Plan contains major investment opportunities for Australian companies who may wish to expand offshore operations.

The development plan will be released via a major conference of investors, developers, hotel management companies, and donors/development partners to inform them about the Plan.

The Tourism plan is tabled for more detailed discussion.

SEE ATTACHMENT C
457 VISA Scheme

A review of provisions to the 457 Visa may be appropriate to address Philippine private sector concerns on the following areas:

1. IELTS Pass Mark - It is our recommendation that an overall IELTS pass mark of 5 be maintained, however the minimum pass mark for each category should be reverted to 4.5.

2. Technical Assessment - It is our recommendation that the skills assessment be reformed to recognize comparable skills examination recently conducted by local trade testing centers to avoid lengthy delays and prohibitive costs.

3. Inflexible and Inconsistent Application of Market Salary Rate Requirement

4. Contract - Another problem encountered with the 457 visa is that the spirit of the system correctly requires a fixed-term contract. However, in reality both parties can break it at will for no valid reasons. This can be devastating to the worker who has sacrificed to get the position and costly to the employer who has invested extensively in the recruitment process.

The increasingly complicated and inflexible system has necessitated even experienced employers to engage the services of migration agents that can result in considerable additional costs and delays.

Should the 457 Visa scheme continue to operate in this manner, employers will be reluctant to seek employees offshore to meet their requirements. This will affect not only the workers who will miss out on employment opportunities, but also affect employers’ ability to maintain and expand their business effectively and meet market demands.

In some cases this has resulted in companies closing down and putting Australian employees out of work.

In the increasingly demanding trades environment that Australia is experiencing, the 457 Visa scheme needs to be revisited and reformed to resemble its once-streamlined structure to accommodate the acute skills shortage projected for the near future.

It should also allow more flexibility in implementation and not adhere to the “one size fits all” philosophy.

SEE ATTACHMENT D

Mining – refer to joint submission of PABC, APBC, ANZCHAM, Chamber of Mines of the Philippines and PCCI.

Albert M G Garcia
PABC - Chairman
June 15, 2011