Malaysia is made of 13 States and 3 Federal Territories. The States are Perlis, Kedah, Pulau, Pinang, perak, Selangor, Negeri Sembilan, Melaka, Johor, Kelantan, Terennganu, Pahang, Sabah and Sarawak. The Federal Territories are: Kuala Lumpur, Federal Territory of Labuan and Federal Territory of Putrajaya.

LOCATION:

Malaysia is located just north of the Equator and right in the heart of Southeast Asia. Her neighbors are Thailand, Myanmar, Laos, Cambodia and Vietnam, while in the south are Singapore and Indonesia, and in the east are Brunei and the Philipines.

CAPITAL: Kuala Lumpur

LAND AREA:

Malaysia covers a total land area of 329,758 sq.km. Peninsular Malaysia covers 131,598 sq.km, Sabah 73,711 sq.km and Sarawk 124,449 sq.km.

CLIMATE:

Tropical climate, which is subject to maritime influence and the interplay of wind systems which originates from the Indian Ocean and South China Sea. The year is commonly divided into the southwest and northwest monsson seasons. The average daily temperation throughout Malaysia varies from 21-32 degrees Celsius. Humidity is high.

POPULATION:

23 Million (2000). The average rate of Annual Natural Increase is 2.3%

PEOPLE:

Multi-racial - Malay, Chinese, Indian and indigenous people.

LANGUAGES:

Multi-lingual - Bahasa Malaysia (official), Chinese dialects, Tamil, English.

RELIGION:

Multi-religious. Islam (official - 53%), Buddhist (17%), Chinese folk religions (12%), Hindu (7%), Christian (6%)

FORM OF STATE:

Federated Constitutional Monarchy consists of a Federal and 13 State Governments. Supreme legislative powers are veted the Federal Parliament.

HEAD OF STATE:

Paramount Ruler Sultan Syed Sirajuddin Syed Putra Jamalullail, is the current Head of State of Malaysia.

HEAD OF GOVERNMENT:

Prime Minister Dato' Seri Dr. Mahathir bin Mohamad. The Prime Minister is the Chief of the Cabinet or Executive.

ECONOMY:

Malaysia made a quick econmic recovery in 1999 from tis worst recession since independence in 1957. GDP grew 5% responding to a dynamic export sector, which grew over 10% and fiscal stimulus from higher government spending. The large export surplus has enabled the country to build up its already substantial financial reserves, to $31 billio at yearend 1999. This stable macroeconomic environment, in which both inflation and unemployment stand at 3% or less, has made possible the relaxation of most of the capital controls imposed by the government in 1998 to counter the impact of the Asian Financial crisi. Government and private forecasters expect. Malaysia to continue this trend in 2002, predicting GDP to grow another 5% to 6%. While Malaysia's immediate economic horizon looks bright its long-term prospects are clouded by the lack of reforms in the corporate sector, particularly those dealing with competitiveness and high corporate dept.

MONETARY UNIT:

Ringgit Malaysia (RM), 1US$ = RM 3.80

REAL GDP GROWTH RATE:

5% (2000)

PER CAPITA INCOME:

RM 12,724 (2000)

EXPORTS:

US$83.5 billion (1999 est.)

Export commodities: Electronic equipment, petroleum and liquefied natural gas, chemicals, palm oil, wood and wood products, rubber, textiles.

Export partners: US 23%, Singapore 16%, Japan 11%, Hong Kong 5%, Netherlands 5%, Taiwan 5%, Thailand 3% (1999 est.)

IMPORTS:

US$61.5 billion (1999)

Import commodities: Machinery and equipment, chemicals, food fuel and lubricants.

Import partners: Japan 21%, US 18%, Singapore 14%, Taiwan 5%, South Korea 5%, Thailand 4%, China 3% (1999 est.)

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The Philippines and Malaysia established diplomatic relations on 18 May 1964. Bilateral relations have been cordial but had been prevented from reaching its full potential due to the question of Sabah.

In recent years, bilateral relations assumed a new sense of vibrancy following the visit of former President Fidel V. Ramos to Kuala Lumpur in January 1993, Prime Minister Mahathir bin Mohamad’s visits to Manila in February 1994 and February 1998, and the Yang di Pertuan Agong’s (King of Malaysia) visit to Manila in June 1995.

The discussions between former President Ramos and Prime Minister Mahathir resulted in the establishment of the Philippines-Malaysia Joint Commission for Bilateral Cooperation which has met four times.

The Philippines and Malaysia have concluded a number of bilateral agreements such as the agreements on anti-smuggling, taxation, air services, among others. Other bilateral agreements are presently being worked out by the two countries, e.g. Memorandum of Understanding (MOU) on Cooperation in Health Matters, MOU in the Field of Education, MOU on Information Cooperation, MOU on Tourism Cooperation, MOU on Fisheries, Investment Guarantee Agreement. The two countries are also collaborating on the establishment of an agreement on joint oil spill response. The Philippines is also working out the possibility of establishing an agreement on trafficking in women and children with Malaysia.

Highlights of Philippine-Malaysia Bilateral Relations

Political

The significant developments which served to enhance relations between the Philippines and Malaysia includes the working visit of Prime Minister Mahathir Mohamad to Manila in February 1998, the attendance of the Malaysian Foreign Minister at the June 12 celebration of the Philippine Centennial Year in Manila, the Philippine chairmanship of ASEAN, the APEC Summit Meeting which provided the opportunity for then newly-elected President Joseph Ejercito Estrada to visit Malaysia and enabling the two leaders to hold their first bilateral meeting, and the hosting by Malaysia of the 4^th RP-Malaysia Joint Commission for Bilateral Cooperation Meeting (JCM) in March 2000, after almost four years since the last meeting of the JCM was held in Manila in May 1996.

Within the ASEAN framework, the Philippines and Malaysia cooperated in finding immediate as well as long-term solutions to the Asian financial crisis. Prime Minister Mahathir during the early part of 1998 made a round of the ASEAN capitals to discuss with other leaders possible global, regional and bilateral measures to bring the crisis to a halt. These visits, without a doubt, not only contributed to the strengthening of ASEAN solidarity, but also improved bilateral ties between ASEAN member countries, including Malaysia and the Philippines.

The establishment of temporary offices in Sabah and Labuan in support of the Regularization Program in 1997 and the continuing interest of the Philippine Government in providing passport and consular services to more than 500,000 Filipinos in Sabah in 1998 was welcomed by the Malaysian authorities. This endeavor helped to alleviate the problem of illegal Filipino immigrants in that state. More importantly, the Philippine Embassy’s participation in the implementation of the Regularization Program opened new avenues and opportunities for normalizing economic as well as political relations between Sabah and Mindanao authorities. To a limited degree, this initiative of the Embassy had a positive effect on the Malaysian Government’s treatment and attitude towards Filipino workers in Malaysia, both legal and illegal. To date, the Embassy regularly sends consular teams to Sabah to cater to the needs of Filipinos in the area.

Relations between the Philippines and Malaysia dipped to an all time low towards the end of 1998 with the strong Philippine reaction to the sacking and arrest of Malaysia’s former Deputy Prime Ministers Anwar Ibrahim which Malaysia found unacceptable. However, relations have considerably improved since then.

Economic Relations

Bilateral trade relations have expanded significantly during the past five years, with exports growing at a higher rate than imports. A major development in 1998 was the reversal of the trade balance in favor of the Philippines. Since then, the Philippines continues to enjoy a favorable trade balance with Malaysia. Average growth rate (1996-2000) was 14.07% for total trade. For the same period, exports grew by an average of 18.98% while imports grew by 9.27%.

BILATERAL MERCHANDISE TRADE (Value in US$ million)

Trade relations continues to surge ahead with total trade increasing to US$2.518B in 2000 from US$2.457B in 1990, for an increase of US$61.05M or 2.48%. The Philippines’ top export product to Malaysia in 2000 was semi conductor devices, with sales reaching US$952.83M (69.19% of total exports). Other top exports are: parts of IC & micro assemblies; machine parts & accessories; finished electrical & electronic machinery & parts; and crude coconut oil.

TOP PHILIPPINE EXPORTS TO MALAYSIA

(January – December 1999/2000)

Value in US$ million

Although sales in electronics suffered a downturn in 2000, it continues to pace Philippine exports, with sales reaching US$ 1.176B in 2000 (reflecting a decrease of US$138.53M from 1999). However, electronics still represents the bulk of Philippine exports to Malaysia, accounting for 85.42% of total export sales in 2000.

For the first four months of 2001 (January – April), semiconductor devices remained the top export item, followed by machine parts & accessories; parts of IC & micro assemblies; finished electrical & electronic machinery & parts; and crude coconut oil. Compared to the same period last year, the value of export trade decreased by 18.71%, with exports of semi conductor devices decreasing by a substantial 41.74%.

TOP PHILIPPINE EXPORTS TO MALAYSIA

(January – April 2000/2001)

Value in US$ million

Philippine imports from Malaysia inched up to US$1.141B in 2000, from US$978.45M in 1999. This represented an increase of US$163.23M or 16.68%. Top imports were electronic integrated circuits and micro assemblies that accounted for US$129.66M or 11.36% of total imports. Coming in second was petroleum oil with a share of 9.64% of total imports or US$ 110.08M. Other top exports were: parts of IC & micro assemblies; liquefied petroleum gas; and materials for the manufacture of semi-conductor devices.

TOP PHILIPPINE IMPORTS TO MALAYSIA

(January – December 1999/2000)

Value in US$ million

For the first four months of 2001 (January – April), materials for the manufacture of semi-conductor devices were the top import item. This was followed by: petroleum oil; liquefied petroleum gas; machineries parts & accessories; and parts of IC & micro-assemblies.

TOP PHILIPPINE IMPORTS TO MALAYSIA

(January – April 2000/2001)

Value in US$ million

The Bureau of Export Trade Promotion lists the following Philippine products for promotion to Malaysia:

1. Halal Certified Product

1.1) Beauty and Healthcare Products

1.2) Food Products

               2. Information technology Services

               3. GTH

                  3.1) Articles Made of Paper

                  3.2) Ceramics/Stoneware

               4. Wood and Iron Furniture

               5. Marble

               6.Construction Materials and Construction Services

Prospects for Philippine Products

Admittedly, Malaysia is a difficult market to penetrate given the existing direction of the Malaysian economy and their import requirements vis-à-vis Philippine products for export. There is a certain degree of parallelism between the import requirements of Malaysia and that of the Philippines. Malaysia in its desire to go up the technological ladder relies more on developed and industrialized nations for its imports. These consist mainly of high technology machinery that it could use to upgrade and support its manufacturing industry. This is manifested by its efforts to relocate labor intensive assembly based industries to countries such as Vietnam and the Philippines and replace this with high technology industries. The Philippines in turn would want to follow the footsteps of Malaysia by initially developing its manufacturing industry that it could later shift to high technology based industries.

A glance at the product lines being imported by Malaysia and that being exported by the Philippines would indicate the difficulty of supplying the former’s major import requirements. The bulk of Philippine exports consist mostly of products assembled from parts imported on consignment basis and the traditional imports consisting mostly of resource based products like crude coconut oil. Thus, we could aptly describe our market niche as secondary. With the Philippines unable to compete for the major import requirements (e.g., electric machinery, transistor valves, electronic component parts and microcircuits, telecommunication equipment and parts, general industrial machinery, and machines for special industries) of Malaysia, or until such time that we would be in the position, it is a natural recourse for us to vie for the secondary import requirements (e.g. garments, articles made of paper, processed food, and some resource based product such as crude coconut oil).

1. Memorandum of Understanding on the Establishment of RP-Malaysia Joint Commission for Bilateral Cooperation

(signed in Kuala Lumpur on 22 July 1993)

2. Memorandum of Understanding on Defense Cooperation

(signed in Manila on 26 September 1994)

3. Memorandum of Agreement on the Establishment of the Turtle Island Heritage Protected Area (TIHPA)

(signed in Manila on 31 May 1996)

4. Air Services Agreement (ASA)

(signed in Manila on 12 April 1987. Amended by a Confidential Memorandum of Understanding signed in Malaysia on 29 November 1996)

5. Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income

(signed in Manila on 27 April 1982)

6. Anti-Smuggling Cooperation Agreement

(signed in Kuala Lumpur on 1 September 1967, Amended by a Second Protocol signed in Kuala Lumpur on 29 March 1995)

7. Agreement on the Abolition of Visa Requirements and Waiver of Visa Fees in Certain Cases

(signed in Manila on 31 July 1962)

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PACIFIC BASIN ECONOMIC COUNCIL - An Overview

The Pacific Basin: A Dynamic Region

The Pacific Basin region contains the world's largest economies, including China, Japan, and the United States. This dynamic region has the world's greatest pool of savings, its most advanced technologies, its fastest-growing and largest potential markets, and its greatest centers of production for key transnational industries. Who can doubt that the Pacific Basin region will continue to set the pace of global economic and technological development into the next century?

PBEC: A Dynamic Force

The Pacific Basin Economic Council is an association of senior business leaders from throughout the Pacific Basin Region dedicated to expanding trade and investment through fostering open markets. Founded in 1967, PBEC serves as the key organization through which regional executives create business relationships, encourage increased trade and investment, support open markets to lower trade barriers, and address emerging issues likely to shape the Pacific and global economies.

PBEC's Mission

PBEC's mission is to achieve a business environment in the region that ensures open trade and investment and encourages competitiveness based on the capabilities of individual companies; provide information, networking fora, and services to members that increase their business opportunities; and support cooperative business efforts to address the economic well-being of citizens in the Pacific region.

Objectives

The Pacific Basin Economic Council will have an impact on the following key business issues in the region (in no particular order), which will promote an improved business climate in the region for all PBEC members:

• advising government in order to improve their business environment:

• generating foreign investment flows to support economic development objectives;

• reducing administrative barriers to international trade in the region;

• stimulating the development and accelerating the implementation of new technologies; and

• balancing economic development with the need for a clean environment.

The Voice of Business

To carry out its mission and serve its members' interests, PBEC provides advice and counsel to governments on emerging issues affecting the Pacific region's development. Through meetings with key officials, PBEC provides members with a mechanism for high-level contact with Pacific Basin governments. PBEC provides advice and counsel to governments on major issues effecting the development of the Pacific region. Private sessions between PBEC executives and government ministers and officials are held regularly.

PBEC also cooperates with international organizations to ensure that business sector viewpoints are actively considered in government decision-making. PBEC also cooperates with international organizations such as the Asia Pacific Economic Cooperation (APEC) forum, the Association of Southeast Asian Nations (ASEAN), the World Trade Organization (WTO), the World Bank, and the United Nations to ensure that business sector viewpoints are represented.

PBEC meetings and publications help members to stay informed about cutting-edge trends and developments affecting the Pacific region. These activities and its International General Meeting make PBEC the preeminent voice of business in the Pacific Basin region.

PBEC Member Committees

Each Member Committee sets its own agenda and conducts a range of programs, including conferences, seminars, and regular sessions with senior government officials. PBEC's nineteen committees also contribute significantly to the international activities of the organization.

PBEC Working Committees

PBEC acts multilaterally through Working Committees to develop PBEC policy on emerging business issues such as administrative barriers, environment, food products and agriculture, foreign direct investment, services, and technology.

Services

The International General Meeting (IGM)

PBEC hosts the premier business conference in the region each year, the IGM, which brings together more than 700 business leaders, government ministers, and heads of state from more than twenty-five economies around the Pacific, to discuss emerging business opportunities and trade issues facing the region.

Business Symposiums

PBEC holds Business Symposiums focusing on improving the business climate in the region, effectively working with the business community toward the common goals of trade and investment liberalization, and increasing economic growth and prosperity. These symposiums are the ideal setting for governments and APEC to receive input from the business sector and conduct a mutually beneficial dialogue among the companies and governments in the region.

Beginning in 1993, PBEC initiated a program of business missions. The first was to the Russian Far East, visiting the cities of Khabarovsk, Nakhodka, and Vladivostok. The 1994 tour visited Hanoi and Ho Chi Minh City, Vietnam. The business missions are hosted by top business and government officials, who showcase their economy and the business opportunities available to PBEC members.

PBEC Vitals

The Pacific Basin Economic Council (PBEC) is an association of senior business leaders representing more than 1,100 major corporations in 20 economies around the Pacific.

PBEC member corporations account for more than US$4 trillion in global sales and employ more than 10 million people.

The unprecedented scope and heft of PBEC's membership constitutes a broad and balanced reservoir of international business knowledge, unmatched in credibility and expertise.

PBEC celebrated its 30th anniversary in 1997.

As the Asia-Pacific's oldest regional business organization, PBEC serves as a forum through which business leaders can create new business relationships, exchange views with government officials, and produce recommendations on key business issues.

PBEC policy positions are often used as a reference by APEC.

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As the PBEC economies continue to strive for growth in an international environment that is constantly changing, there will be challenges for all: the opportunities and threats posed by globalisation, the potential of technology, the call for structural adjustments and better corporate governance, the new rules of world trade, the implications of regional politics and security on business and the emergence of China as a catalyst for the entire region.

As the "Voice of Business in the Pacific" for the past 35 years, PBEC has brought together the leading CEOs from throughout the Asia Pacific, heads of government, government ministers, leaders of international organisations, and other key decision makers. This senior level interaction has been a hallmark of the IGM experience, and has permitted PBEC to not only be the region's premier networking forum, but also to play an important role in influencing the development of business and policy issues in the region.

The Kuala Lumpur IGM is expected to include the participation of several leaders from key PBEC economies, as well as Trade and Finance Ministers, outlining their views on the policy implications of the region's challenging business environment. Senior executives from the Asia Pacific's most dynamic companies will also attend, and share their thoughts on the most pressing issues facing business today. Malaysia's Prime Minister Dato Seri Dr Mahathir Mohamad will deliver a keynote address and share his vision for the Pacific Basin.

Issues & Sub-Themes

Some of the issues that will be explored include:

• The challenges of economic growth: the security dimension
• Trade & Investment liberalisation: Playing by the new rules
• Facilitating growth in the Pacific
• Regional outlooks: China, ASEAN, the Americas
• Partnering China for growth
• Industry Outlooks: Biotechnology, Corporate Governance, Energy, Environment, Financial Markets, Food
• Fostering FDI in the Pacific Basin
• Rebuilding Confidence: the challenge for business
• Bridging the digital divide

The 35th International General Meeting will include a number of special programs that promise to make the Kuala Lumpur IGM a truly unforgettable, and uniquely valuable, event:

1. Breakfast Chats with Global Personalities: Delegates will have an opportunity to start their day with an intellectually stimulating breakfast chat with some of the leading personalities from the world of arts, media, and entertainment. Each day, before beginning the formal program of sessions on business and economic issues, these informal chats will allow IGM delegates to engage interesting global personalities over breakfast, in a relaxed, informal environment.
2. Ministerial Roundtables: Special, off-the-record roundtable discussions with key ministers from PBEC economies. These small, intimate gatherings will allow IGM delegates to exchange views and gain insights from some of the pivotal governmental decision-makers in the region.

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PHILIPPINES - MALAYSIA BUSINESS COUNCIL

The Council is composed of senior business executives from both countries and was established to promote on a regular basis cooperation between the business communities of the Philippines and Malaysia. The Council’s objectives are to identify and develop areas of cooperation between both countries’ private sectors; to encourage and develop further investment in both the Philippines and Malaysia; to encourage and develop trade links between both countries; to identify business opportunities, in particular small-and medium-sized enterprises; and to enhance networking, contacts, and exchange of information between the private sectors of both countries.

The Council is chaired by MBC Chairman Ricardo J. Romulo for the Philippines and Dick Chan, Chairman of Metroplex in Malaysia

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