Retos y Oportunidades en el Este de Canad

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Trade opportunities between Mexico and
Phillipines April 20, 2006
Hector Reyes Retana President and CEO Mexicos
National Bank for Foreign Trade
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Contents

• The Mexican economy
• Economic relations Phillipines-Mexico
• Bancomext

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CHARACTERISTICS OF THE MEXICAN ECONOMY

• Population
• 103.1 million
• Size of the economy
• 768 billion USD
• Per capita GDP
• 7,456 USD
• GDP by sector
• Agriculture 4 Industry 25 Services 71

Source SHCP, INEGI, IMF
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MEXICO IS A LEADING PLAYER IN THE INTERNATIONAL
ECONOMY
GDP in billion dollars, 2005
Thirteenth world economy
Exports in billion dollars, 2005
Tenth world exporter 1/
1/ Considering the European Union as a
whole Source IMF, WTO
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AND ALSO A TOP ECONOMY IN THE LATIN AMERICAN
REGION

• GDP in 2005
• (Billion dollars)

Total exports in 2005 (Billion dollars)
Source IMF, WTO, CEPAL
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ECONOMIC ACTIVITY

• The Mexican economy is on a growing path
• Average annual increase in GDP of 3.6 in recent
  years

Annual GDP growth ()
GDP growth in Mexico and the U.S.A. ()

• And is closely related to the U.S. economic
  activity

2000
2001
2003
2005
P/ Projected Source Banco de México
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ECONOMIC STABILITY

• Aside of growth Mexico has moved forward in its
  macroeconomic stability
• Decreasing inflation
• Low country risk
• At historical low levels and below other
  emerging economies
• High international reserves
• Flexible exchange rate regime
• Investment grade
• This insures an attractive environment for
  investment decisions and economic growth

Annual inflation, 1998-2006 ()
March 3.4
Country risk for selected Latin American
economies, 2005-2006 (Basis points)
Argentina
Brasil
México
133 points on April 12 Source Banco de México,
SHCP
2005
2006
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MEXICO IS A RELIABLE TRADE AND INVESTMENT PARTNER
Network of free trade agreements with 43
countries
Strategic location
Open economy
Investment protection agreements
Competitive labor force
Investment grade

• Flexible exchange rate

Sound management of economic policy
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12 FREE TRADE AGREEMENTS WITH 43 COUNTRIES
European Union (25 countries)
Japan
Uruguay
Source Secretaría de Economía
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DYNAMIC EXPORT GROWTH

• Between 1990 and 2005 total exports increased
  from 40 to 214 billion dollars
• For 2006 exports are expected to reach 235
  billion dollars

Total exports (billion dollars)
235
214
NAFTA

• Exports of manufactures
• (Billion dollars)

• Manufactures account for 82 of total exports

e/ Estimated Source Banco de México
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LEADING EXPORTING INDUSTRIES IN 2005
Million dollars

• Electronics 46,249
• Automobile and autoparts 45,692
• Machinery and equipment 24,805
• Textiles and apparel 10,349
• Chemicals 5,912
• Food and beverages 5,729
• Steel 5,481
• Other industries 30,304
• TOTAL MANUFACTURES 174,521

Source Banco de México
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MEXICO IS ALSO A LARGE IMPORTER

• Total imports
• 1995-2005
• (Billion dollars)

• Autoparts 10,719
• Iintegrated circuits 8,905
• Automobiles 7,840
• Oil derivatives 7,257
• Computers 6,238
• Machinery 4,247
• Cables 3,150
• Plastic manufactures 3,137
• Telecommunications equipment 2,703
• Trucks 2,341
• Steel products 2,133
• Other 162630
• Total 221,300

Leading imports in 2005 (Million dollars)
Source Banco de México
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FOREIGN DIRECT INVESTMENT, 1980-2005(Million
dollars)

• After NAFTA, average annual flows of FDI
  multiplied by four
• From 3 billion in 1980-1993 to 13 billion in
  1994-2005
• In the last decade Mexico has received 140
  billion dollars in FDI

NAFTA
Source Secretaría de Economía
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IN 2005 MEXICO REMAINED AS THE SECOND FDI
RECIPIENT AMONG EMERGING ECONOMIES And the first
one in the Latin American region
FDI flows to selected emerging economies in
2005 (Million dollars)
Source UNCTAD
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ECONOMIC RELATIONS PHILLIPINES-MEXICO
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MEXICO ECONOMIC RELATIONS WITH PHILLIPINES

• Bilateral trade in 2005 reached 1,355 million
  dollars
• There is a trade deficit for Mexico of 1,274
  million
• Phillipine exports have been the most dynamic
  component
• They grew from 587 to 1,314 million dollars in
  the last five years

Mexico foreign trade with Phillipines,
2000-2005(Million dollars)
2002
2003
2004
2005
2000
2001
Exports from Mexico 11.4 16.4 14.4 14.1 12.7 40.6
Imports from Phillipines 587.2 817.5 925.0 783.8 8
78.2 1,314.6 Trade balance -575.8 -801.1 -910.6 -7
69.7 -865.5 -1,274.0
Source INEGI
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MEXICO LEADING PRODUCTS TRADED WITH PHILLIPINES
IN 2005(Million dollars)

• Parts for computers 8.5
• Copper 4.6
• Selenium 2.7
• Eyeglasses 2.3
• Oil derivatives 1.6
• Other 20.9
• Total 40.6

Mexican exports

• Integrated circuits 755.6
• Parts for computers 63.6
• Memory units for computers 62.5
• Parts for TV and telecomm. eq. 43.2
• Cables 19.3
• Other 370.4
• Total 1,314.6

Imports from Phillipines
Source World Trade Atlas
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BANCOMEXT
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BANCOMEXT OVERVIEW
25 Offices in Mexico 31 Offices Abroad
Mandate to Promote Finance Trade
Small Medium-sized Firms
Founded in 1937
Own Resources Generation
Sovereign Risk SP BBB Moodys Baa1 Fitch BBB
Government Owned (99.9)
1,024 Employees
With the irrevocable full faith and credit
obligation of the Mexican Government
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BANCOMEXT BUSINESS SEGMENTS
Direct Loans Loans to Private and Public
entities, mainly on a secured basis
Government Loans Bancomext acts as a financial
agent for the Mexican Government
Discounted Loans Discounting of trade-related
instruments by commercial banks
Promotional Activities Missions, international
fairs, training, technical support
Guarantees Pre and post-export guarantees for
trade finance, bid bonds, performance bonds,
bank guarantees
Venture Capital Limited equity participation
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SERVICES FOR FOREIGN BUSINESSMEN

• Match-making with Mexican exporters
• Information on Mexico and its export supply
• Buyers missions and visits to Mexican trade
  shows
• Buyers credit

Trade

• Match-making with Mexican entrepreneurs
• Information on economic sectors and regions of
  Mexico
• Legal framework
• Advise on investments location
• Investment Portal

Investment
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INVESTMENT PORTAL The website of the Mexican
Government to attract FDI

• Projects
• Sectors
• Potential locations and partners
• Costs in Mexico
• Incentives
• Infrastructure

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BANCOMEXT ON-LINE
www.bancomext.com
Bancomext Trade Commission in Singapore covers
business with Phillipines Mail
bncesin_at_singnet.com.sg 152 Beach Road No.
06-05/06, The Gateway East Tower 189721 Singapore