UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-06378

Templeton Developing Markets Trust
----------------------------------
(Exact name of registrant as specified in charter)

500 East Broward Blvd., Suite 2100, Fort Lauderdale, FL 33394-3091
------------------------------------------------------------------
(Address of principal executive offices) (Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
-------------------------------------------------------------
(Name and address of agent for service)

Registrant's telephone number, including area code: (954) 527-7500
--------------

Date of fiscal year end: 12/31
-----

Date of reporting period: 06/30/08
--------

Item 1. Reports to Stockholders.

JUNE 30, 2008

(GRAPHIC)

SEMIANNUAL REPORT AND SHAREHOLDER LETTER INTERNATIONAL

TEMPLETON
DEVELOPING MARKETS TRUST

WANT TO RECEIVE THIS DOCUMENT FASTER VIA EMAIL?

Eligible shareholders can sign up for eDelivery at franklintempleton.com. See
inside for details.

(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO)

Franklin - TEMPLETON - Mutual Series

Semiannual Report

Templeton Developing Markets Trust

YOUR FUND'S GOAL AND MAIN INVESTMENTS: Templeton Developing Markets Trust seeks
long-term capital appreciation. Under normal market conditions, the Fund invests
at least 80% of its net assets in securities of developing market countries.

PERFORMANCE DATA REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY DIFFER FROM
FIGURES SHOWN. PLEASE VISIT FRANKLINTEMPLETON.COM OR CALL 1-800/342-5236 FOR
MOST RECENT MONTH-END PERFORMANCE.

GEOGRAPHIC BREAKDOWN
Based on Total Net Assets as of 6/30/08

(PIE CHART)

Asia 36.0%
Europe 28.3%
Latin America 25.0%
Middle East & Africa 6.2%
Short-Term Investments
& Other Net Assets 4.5%

This semiannual report for Templeton Developing Markets Trust covers the period
ended June 30, 2008.

PERFORMANCE OVERVIEW

Templeton Developing Markets Trust - Class A had a -16.49% cumulative total
return for the six months ended June 30, 2008. The Fund underper-formed its
benchmarks, the Morgan Stanley Capital International (MSCI) Emerging Markets
(EM) Index and the Standard & Poor's/International Finance Corporation
Investable (S&P/IFCI) Composite Index, which had total returns of -11.64% and
- -12.26% for the same period.(1) Please note that

(1.) Source: (C) 2008 Morningstar. All Rights Reserved. The information
contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not warranted
to be accurate, complete or timely. Neither Morningstar nor its content
providers are responsible for any damages or losses arising from any use of
this information. The MSCI EM Index is a free float-adjusted, market
capitalization-weighted index designed to measure equity market performance
in global emerging markets. The S&P/IFCI Composite Index is a free
float-adjusted, market capitalization-weighted index designed to measure
equity performance of global emerging markets. The indexes are unmanaged
and include reinvested dividends. One cannot invest directly in an index,
nor is an index representative of the Fund's portfolio.

THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND NAMES OF ALL
PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE
SOI BEGINS ON PAGE 18.

Semiannual Report | 3

index performance is purely for reference and that we do not attempt to track
any index, but rather undertake investments on the basis of fundamental
research. You can find the Fund's long-term performance data in the Performance
Summary beginning on page 8.

WHAT IS A CARRY TRADE?

Carry trade is a strategy in which an investor sells a certain currency with a
relatively low interest rate and uses the funds to purchase a different currency
yielding a higher interest rate. A trader using this strategy attempts to
capture the difference between the rates, which can often be substantial,
depending on the amount of leverage the investor chooses to use.

ECONOMIC AND MARKET OVERVIEW

Emerging markets gave back some of last year's strong gains in the first quarter
of 2008. Concerns of a U.S. recession, the unwinding of the Japanese yen carry
trade and the bailout of Bear Stearns by JPMorgan Chase pushed global stock
markets down in the first quarter. In the second quarter, markets recorded mixed
results, as Latin America and Eastern Europe registered positive returns while
Asian markets declined.

Latin American markets were the top performers in the six-month reporting period
due to stronger currencies, higher investor confidence and rising commodity
prices for exports. Brazil and Argentina were among the region's top performing
countries. In Europe, Russia and the Czech Republic outperformed their regional
peers while Turkey underperformed. Strong economic growth and high commodity
prices continued to support the Russian stock market, while investor confidence
in Turkey suffered due to political uncertainty despite higher-than-expected
gross domestic product growth. Fears of a prolonged U.S. economic downturn and
its impact on Asia, coupled with overheating and inflationary concerns,
pressured Asian markets to end the period in negative territory.

INVESTMENT STRATEGY

We employ a bottom-up, value-oriented, long-term investment approach. We focus
on the market price of a company's securities relative to our evaluation of its
long-term (typically five years) earnings, asset value and cash flow potential.
We also consider a company's price/earnings ratio, profit margins and
liquidation value. As we look for investments, we focus on specific companies
and perform in-depth research to construct an "action list" from which we make
our investment decisions. In choosing investments, we strongly believe in
on-site visits to issuers of prospective investments to assess critical factors
such as management strength and local conditions.

4 | Semiannual Report

MANAGER'S DISCUSSION

For the six months under review, sectors that had a negative impact on the
Fund's absolute performance were banks, energy and telecommunication
services.(2) Geographically, our investments in China, South Korea and Turkey
also hurt Fund performance. Concerns about high inflation and an overheating
economy led Chinese stock prices to decline, while political uncertainty had a
negative impact on Turkey's stock market. The largest individual detractors
included Akbank, one of Turkey's largest commercial banks, Chalco (Aluminum
Corp. of China), China's leading alumina and aluminum products manufacturer, and
SK Energy, South Korea's largest oil refiner. Based on our research, we believed
the Fund's investments in these sectors and countries were well positioned in
their respective markets to benefit over the longer term from developments in
emerging markets.

On the other hand, the largest contributor to absolute performance was the
Fund's exposure to Brazil. Brazil's sovereign debt attained investment grade
status for the first time from two major international ratings agencies,
Standard & Poor's and Fitch Ratings, which boosted international confidence in
the country's stock market. By industry, food and staples retailing contributed
to Fund returns. Among the Fund's top individual stock contributors were three
Brazilian holdings, Petrobras (Petroleo Brasileiro), the national oil and gas
company, Vale (Companhia Vale do Rio Doce), one of the world's largest iron ore
producers that also engages in various other mining activities, and Usiminas
(Usinas Siderurgicas de Minas Gerais), the country's major flat steel producer.

During the reporting period, we increased the Fund's investments in Taiwan,
Pakistan and Singapore, as market corrections allowed us to purchase undervalued
stocks trading at what we considered attractive valuations. We also initiated
investments in companies in select frontier markets, which are markets we
believe have potential to grow at a fast pace and could become tomorrow's
emerging markets. We made select purchases in Qatar, United Arab Emirates,
Kuwait, Ukraine and Panama, and as of period-end, the Fund had 1.2% of total net
assets in frontier markets.

(2.) The banks sector comprises commercial banks in the SOI. The energy sector
comprises energy equipment and services; and oil, gas and consumable fuels
in the SOI. The telecommunication services sector comprises diversified
telecommunication services and wireless telecommunication services in the
SOI.

TOP 10 COUNTRIES
6/30/08

% OF TOTAL
NET ASSETS
----------

Brazil 20.0%
China 12.5%
Russia 12.0%
Turkey 6.7%
South Korea 6.0%
Taiwan 5.9%
Mexico 4.7%
South Africa 4.7%
India 4.3%
U.K. 3.9%

Semiannual Report | 5

TOP 10 EQUITY HOLDINGS
6/30/08

COMPANY % OF TOTAL
SECTOR/INDUSTRY, COUNTRY NET ASSETS
- ------------------------ ----------

Vale (Companhia Vale do Rio Doce),
ADR, pfd., A 7.2%
METALS & MINING, BRAZIL
Petrobras (Petroleo Brasileiro SA),
ADR, pfd. 6.9%
OIL, GAS & CONSUMABLE FUELS, BRAZIL
Gazprom, ADR 3.6%
OIL, GAS & CONSUMABLE FUELS, RUSSIA
Norilsk Nickel (Mining and Metallurgical
Co. Norilsk Nickel) 3.3%
METALS & MINING, RUSSIA
Anglo American PLC 3.1%
METALS & MINING, U.K.
China Mobile Ltd. 2.5%
WIRELESS TELECOMMUNICATION SERVICES,
CHINA
LUKOIL, ADR 2.3%
OIL, GAS & CONSUMABLE FUELS, RUSSIA
Chalco (Aluminum Corp. of ChinaLtd.), H 2.3%
METALS & MINING, CHINA
Akbank TAS 2.3%
COMMERCIAL BANKS, TURKEY
SK Energy Co. Ltd. 2.1%
OIL, GAS & CONSUMABLE FUELS,
SOUTH KOREA

From a sector perspective, we made purchases in semiconductors, marine,
electronic equipment manufacturing and computer hardware companies.(3) The
largest purchases during the period included shares of TSMC (Taiwan
Semiconductor Manufacturing), the world's biggest independent integrated circuit
foundry, Qatar National Bank, Qatar's largest bank, and HSBC Holdings, one of
the world's premier banking and financial services organizations.

To raise funds for redemptions during the reporting period, we sold a number of
holdings. These sales also allowed the Fund to focus on stocks we considered
relatively more attractively valued within our investment universe. We sold some
positions as stocks reached sale price targets. As a result, the Fund reduced
allocations to Russia, Brazil and China (via Hong Kong-listed China H and Red
Chip shares).(4) Key sales included UES (Unified Energy Systems), an electricity
production group that would be split into individual companies due to
restructuring in Russia's power sector, China Telecom, the country's leading
integrated telecommunication services provider, and America Movil, a major
wireless telecommunication provider in Mexico and Latin America. We also reduced
the Fund's exposure to telecommunication services and electric utilities
companies.

Although this reporting period was challenging for emerging markets, we believe
they are in a stronger position than in the past to weather the effects of a
U.S. economic slowdown because many emerging markets hold large fiscal reserves.
We are also excited about frontier markets, which we consider to be the younger
generation of emerging markets, and the potential investment opportunities they
offer.

(3.) The semiconductors industry is part of semiconductors and semiconductor
equipment in the SOI. The electronic equipment manufacturing industry is
part of electronic equipment and instruments in the SOI. The computer
hardware industry is part of computers and peripherals in the SOI.

(4.) "China H" denotes shares of China-incorporated, Hong Kong-listed companies
with most businesses in China. "Red Chip" denotes shares of Hong
Kong-listed companies with significant exposure to China. China H and Red
Chip shares are traded on the Hong Kong Stock Exchange.

6 | Semiannual Report

We thank you for your continued participation in Templeton Developing Markets
Trust and look forward to serving your future investment needs.

(PHOTO OF MARK MOBIUS)

/s/ Mark Mobius
Mark Mobius
Executive Chairman
Templeton Asset Management Ltd.

THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS
AS OF JUNE 30, 2008, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT OUR
MAIN INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE
DEPENDING ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY
NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY.
THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET,
COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES
CONSIDERED RELIABLE, BUT THE INVESTMENT MANAGER MAKES NO REPRESENTATION OR
WARRANTY AS TO THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR
INVESTMENT MANAGEMENT PHILOSOPHY.

Semiannual Report | 7

Performance Summary as of 6/30/08

Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses of each
class. Capital gain distributions are net profits realized from the sale of
portfolio securities. The performance table does not reflect any taxes that a
shareholder would pay on Fund dividends, capital gain distributions, if any, or
any realized gains on the sale of Fund shares. Total return reflects
reinvestment of the Fund's dividends and capital gain distributions, if any, and
any unrealized gains or losses.

PRICE INFORMATION

CLASS A (SYMBOL: TEDMX) CHANGE 6/30/08 12/31/07
- ----------------------- ------ ------- --------

Net Asset Value (NAV) -$5.03 $25.47 $30.50

CLASS B (SYMBOL: TDMBX) CHANGE 6/30/08 12/31/07
- ----------------------- ------ ------- --------

Net Asset Value (NAV) -$5.02 $24.83 $29.85

CLASS C (SYMBOL: TDMTX) CHANGE 6/30/08 12/31/07
- ----------------------- ------ ------- --------

Net Asset Value (NAV) -$5.00 $24.76 $29.76

CLASS R (SYMBOL: TDMRX) CHANGE 6/30/08 12/31/07
- ----------------------- ------ ------- --------

Net Asset Value (NAV) -$4.99 $25.08 $30.07

ADVISOR CLASS (SYMBOL: TDADX) CHANGE 6/30/08 12/31/07
- ----------------------------- ------ ------- --------

Net Asset Value (NAV) -$4.99 $25.49 $30.48

8 | Semiannual Report

Performance Summary (CONTINUED)

PERFORMANCE

CUMULATIVE TOTAL RETURN EXCLUDES SALES CHARGES. AVERAGE ANNUAL TOTAL RETURN AND
VALUE OF $10,000 INVESTMENT INCLUDE MAXIMUM SALES CHARGES. CLASS A: 5.75%
MAXIMUM INITIAL SALES CHARGE; CLASS B: CONTINGENT DEFERRED SALES CHARGE (CDSC)
DECLINING FROM 4% TO 1% OVER SIX YEARS, AND ELIMINATED THEREAFTER; CLASS C: 1%
CDSC IN FIRST YEAR ONLY; CLASS R/ADVISOR CLASS: NO SALES CHARGES. UNTIL AUGUST
31, 2008, THE FUND MAY CHARGE A 2% FEE ON REDEMPTIONS MADE WITHIN SEVEN DAYS OF
PURCHASE.

CLASS A 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- ------- -------- ------- -------- --------

Cumulative Total Return(1) -16.49% -6.37% +196.62% +231.50%
Average Annual Total Return(2) -21.29% -11.76% +22.83% +12.06%
Value of $10,000 Investment(3) $ 7,871 $ 8,824 $ 27,958 $ 31,232
Total Annual Operating Expenses(4) 1.83%

INCEPTION
CLASS B 6-MONTH 1-YEAR 5-YEAR (1/1/99)
- ------- -------- ------- -------- ---------

Cumulative Total Return(1) -16.82% -7.08% +186.65% +218.16%
Average Annual Total Return(2) -20.14% -10.28% +23.27% +12.96%
Value of $10,000 Investment(3) $ 7,986 $ 8,972 $ 28,465 $ 31,816
Total Annual Operating Expenses(4) 2.55%

CLASS C 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- ------- -------- ------- -------- --------

Cumulative Total Return(1) -16.80% -7.05% +186.55% +209.68%
Average Annual Total Return(2) -17.63% -7.85% +23.44% +11.97%
Value of $10,000 Investment(3) $ 8,237 $ 9,215 $ 28,655 $ 30,968
Total Annual Operating Expenses(4) 2.55%

INCEPTION
CLASS R 6-MONTH 1-YEAR 5-YEAR (1/1/02)
- ------- -------- ------- -------- ---------

Cumulative Total Return(1) -16.59% -6.56% +193.90% +239.55%
Average Annual Total Return(2) -16.59% -6.56% +24.06% +20.73%
Value of $10,000 Investment(3) $ 8,341 $ 9,344 $ 29,390 $ 33,955
Total Annual Operating Expenses(4) 2.06%

ADVISOR CLASS 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- ------------- -------- ------- -------- --------

Cumulative Total Return(1) -16.37% -6.14% +201.01% +242.92%
Average Annual Total Return(2) -16.37% -6.14% +24.66% +13.11%
Value of $10,000 Investment(3) $ 8,363 $ 9,386 $ 30,101 $ 34,292
Total Annual Operating Expenses(4) 1.56%

PERFORMANCE DATA REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY DIFFER FROM
FIGURES SHOWN. FOR MOST RECENT MONTH-END PERFORMANCE, SEE "FUNDS AND
PERFORMANCE" AT FRANKLINTEMPLETON.COM OR CALL 1-800/342-5236.

Semiannual Report | 9

Performance Summary (CONTINUED)

ENDNOTES

THE FUND INVESTS IN FOREIGN SECURITIES, WHICH CAN INVOLVE EXPOSURE TO CURRENCY
VOLATILITY AND POLITICAL, ECONOMIC AND REGULATORY UNCERTAINTY. INVESTMENTS IN
DEVELOPING MARKETS INVOLVE HEIGHTENED RISKS RELATED TO THE SAME FACTORS, IN
ADDITION TO THOSE ASSOCIATED WITH THESE MARKETS' SMALLER SIZE AND LESSER
LIQUIDITY. THE FUND'S PROSPECTUS ALSO INCLUDES A DESCRIPTION OF THE MAIN
INVESTMENT RISKS.

CLASS B: These shares have higher annual fees and expenses than Class A
shares.

CLASS C: Prior to 1/1/04, these shares were offered with an initial sales
charge; thus actual total returns would have differed. These shares
have higher annual fees and expenses than Class A shares.

CLASS R: Shares are available to certain eligible investors as described in
the prospectus. These shares have higher annual fees and expenses
than Class A shares.

ADVISOR CLASS: Shares are available to certain eligible investors as described in
the prospectus.

(1.) Cumulative total return represents the change in value of an investment
over the periods indicated.

(2.) Average annual total return represents the average annual change in value
of an investment over the periods indicated. Six-month return has not been
annualized.

(3.) These figures represent the value of a hypothetical $10,000 investment in
the Fund over the periods indicated.

(4.) Figures are as stated in the Fund's prospectus current as of the date of
this report.

10 | Semiannual Report

Your Fund's Expenses

As a Fund shareholder, you can incur two types of costs:

- - Transaction costs, including sales charges (loads) on Fund purchases and
redemption fees; and

- - Ongoing Fund costs, including management fees, distribution and service
(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs,
sometimes referred to as operating expenses.

The following table shows ongoing costs of investing in the Fund and can help
you understand these costs and compare them with those of other mutual funds.
The table assumes a $1,000 investment held for the six months indicated.

ACTUAL FUND EXPENSES

The first line (Actual) for each share class listed in the table provides actual
account values and expenses. The "Ending Account Value" is derived from the
Fund's actual return, which includes the effect of Fund expenses.

You can estimate the expenses you paid during the period by following these
steps. OF COURSE, YOUR ACCOUNT VALUE AND EXPENSES WILL DIFFER FROM THOSE IN THIS
ILLUSTRATION:

1. Divide your account value by $1,000.
IF AN ACCOUNT HAD AN $8,600 VALUE, THEN $8,600 / $1,000 = 8.6.

2. Multiply the result by the number under the heading "Expenses Paid During
Period."
IF EXPENSES PAID DURING PERIOD WERE $7.50, THEN 8.6 X $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

HYPOTHETICAL EXAMPLE FOR COMPARISON WITH OTHER FUNDS

Information in the second line (Hypothetical) for each class in the table can
help you compare ongoing costs of investing in the Fund with those of other
mutual funds. This information may not be used to estimate the actual ending
account balance or expenses you paid during the period. The hypothetical "Ending
Account Value" is based on the actual expense ratio for each class and an
assumed 5% annual rate of return before expenses, which does not represent the
Fund's actual return. The figure under the heading "Expenses Paid During Period"
shows the hypothetical expenses your account would have incurred under this
scenario. You can compare this figure with the 5% hypothetical examples that
appear in shareholder reports of other funds.

Semiannual Report | 11

Your Fund's Expenses (CONTINUED)

PLEASE NOTE THAT EXPENSES SHOWN IN THE TABLE ARE MEANT TO HIGHLIGHT ONGOING
COSTS AND DO NOT REFLECT ANY TRANSACTION COSTS, SUCH AS SALES CHARGES OR
REDEMPTION FEES. Therefore, the second line for each class is useful in
comparing ongoing costs only, and will not help you compare total costs of
owning different funds. In addition, if transaction costs were included, your
total costs would have been higher. Please refer to the Fund prospectus for
additional information on operating expenses.

BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES PAID DURING
VALUE 1/1/08 VALUE 6/30/08 PERIOD* 1/1/08-6/30/08
----------------- -------------- ----------------------

CLASS A
Actual $1,000 $ 835.10 $ 8.49
Hypothetical (5% return before expenses) $1,000 $1,015.61 $ 9.32
CLASS B
Actual $1,000 $ 831.80 $11.84
Hypothetical (5% return before expenses) $1,000 $1,011.93 $13.01
CLASS C
Actual $1,000 $ 832.00 $11.80
Hypothetical (5% return before expenses) $1,000 $1,011.98 $12.96
CLASS R
Actual $1,000 $ 834.10 $ 9.58
Hypothetical (5% return before expenses) $1,000 $1,014.42 $10.52
ADVISOR CLASS
Actual $1,000 $ 836.30 $ 7.31
Hypothetical (5% return before expenses) $1,000 $1,016.91 $ 8.02

* Expenses are calculated using the most recent six-month expense ratio,
annualized for each class (A: 1.86%; B: 2.60%; C: 2.59%; R: 2.10%; and
Advisor: 1.60%), multiplied by the average account value over the period,
multiplied by 182/366 to reflect the one-half year period.

12 | Semiannual Report

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS

SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2008 --------------------------------------------------------------------------
CLASS A (UNAUDITED) 2007 2006 2005 2004 2003
- ------- ---------------- ---------- ---------- ---------- ---------- ----------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding
throughout the period)
Net asset value, beginning of
period ...................... $ 30.50 $ 28.28 $ 23.42 $ 18.53 $ 14.95 $ 10.00
---------- ---------- ---------- ---------- ---------- ----------
Income from investment
operations(a):
Net investment income(b) .... 0.13 0.55 0.36 0.28 0.18 0.22
Net realized and unrealized
gains (losses) ........... (5.16) 7.14 6.20 4.90 3.66 4.98
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations .................. (5.03) 7.69 6.56 5.18 3.84 5.20
---------- ---------- ---------- ---------- ---------- ----------
Less distributions from:
Net investment income ....... -- (0.84) (0.53) (0.29) (0.26) (0.25)
Net realized gains .......... -- (4.63) (1.17) -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions ............ -- (5.47) (1.70) (0.29) (0.26) (0.25)
---------- ---------- ---------- ---------- ---------- ----------
Redemption fees(c) ............. -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period ...................... $ 25.47 $ 30.50 $ 28.28 $ 23.42 $ 18.53 $ 14.95
========== ========== ========== ========== ========== ==========
Total return(d) ................ (16.49)% 28.77% 28.29% 28.20% 25.45% 53.14%
RATIOS TO AVERAGE NET ASSETS(e)
Expenses ....................... 1.86%(f) 1.83%(f) 1.86%(f) 1.97%(f) 2.03%(f) 2.17%
Net investment income .......... 0.96% 1.74% 1.39% 1.36% 1.12% 1.85%
SUPPLEMENTAL DATA
Net assets, end of period
(000's) ..................... $3,385,194 $4,647,893 $4,876,035 $3,395,151 $2,305,376 $1,873,277
Portfolio turnover rate ........ 20.75% 92.26%(g) 51.95% 34.76% 58.74% 48.60%

(a) The amount shown for a share outstanding throughout the period may not
correlate with the Statement of Operations for the period due to the timing
of sales and repurchases of the Fund shares in relation to income earned
and/or fluctuating market value of the investments of the Fund.

(b) Based on average daily shares outstanding.

(d) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable, and is not annualized for periods less than
one year.

(e) Ratios are annualized for periods less than one year.

(f) Benefit of expense reduction rounds to less than 0.01%.

(g) Excludes the value of portfolio securities delivered as a result of
redemptions in-kind. See Note 11.

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 13

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS (CONTINUED)

SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2008 ------------------------------------------------------------
CLASS B (UNAUDITED) 2007 2006 2005 2004 2003
- ------- ---------------- ------- ------- ------- ------- -------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding
throughout the period)
Net asset value, beginning of
period ...................... $ 29.85 $ 27.78 $ 23.03 $ 18.24 $ 14.74 $ 9.82
------- ------- ------- ------- ------- -------
Income from investment
operations(a):
Net investment income(b) .... 0.03 0.30 0.17 0.15 0.06 0.13
Net realized and unrealized
gains (losses) ........... (5.05) 7.00 6.08 4.80 3.61 4.93
------- ------- ------- ------- ------- -------
Total from investment
operations .................. (5.02) 7.30 6.25 4.95 3.67 5.06
------- ------- ------- ------- ------- -------
Less distributions from:
Net investment income ....... -- (0.60) (0.33) (0.16) (0.17) (0.14)
Net realized gains .......... -- (4.63) (1.17) -- -- --
------- ------- ------- ------- ------- -------
Total distributions ............ -- (5.23) (1.50) (0.16) (0.17) (0.14)
------- ------- ------- ------- ------- -------
Redemption fees(c) ............. -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Net asset value, end of
period ...................... $ 24.83 $ 29.85 $ 27.78 $ 23.03 $ 18.24 $ 14.74
======= ======= ======= ======= ======= =======
Total return(d) ................ (16.82)% 27.82% 27.40% 27.35% 24.70% 52.17%
RATIOS TO AVERAGE NET ASSETS(e)
Expenses ....................... 2.60%(f) 2.55%(f) 2.58%(f) 2.62%(f) 2.68%(f) 2.82%
Net investment income .......... 0.22% 1.02% 0.67% 0.71% 0.47% 1.20%
SUPPLEMENTAL DATA
Net assets, end of period
(000's) ..................... $37,638 $53,396 $54,991 $46,965 $36,992 $26,062
Portfolio turnover rate ........ 20.75% 92.26%(g) 51.95% 34.76% 58.74% 48.60%

(b) Based on average daily shares outstanding.

(d) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable, and is not annualized for periods less than
one year.

(e) Ratios are annualized for periods less than one year.

(f) Benefit of expense reduction rounds to less than 0.01%.

(g) Excludes the value of portfolio securities delivered as a result of
redemptions in-kind. See Note 11.

The accompanying notes are an integral part of these financial statements.

14 | Semiannual Report

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS (CONTINUED)

SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2008 ----------------------------------------------------------------
CLASS C (UNAUDITED) 2007 2006 2005 2004 2003
- ------- ---------------- -------- -------- -------- -------- --------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding
throughout the period)
Net asset value, beginning of
period ...................... $ 29.76 $ 27.72 $ 23.00 $ 18.22 $ 14.72 $ 9.79
-------- -------- -------- -------- -------- --------
Income from investment
operations(a):
Net investment income(b) .... 0.03 0.29 0.17 0.14 0.05 0.14
Net realized and unrealized
gains (losses) ........... (5.03) 7.00 6.07 4.81 3.60 4.90
-------- -------- -------- -------- -------- --------
Total from investment
operations .................. (5.00) 7.29 6.24 4.95 3.65 5.04
-------- -------- -------- -------- -------- --------
Less distributions from:
Net investment income ....... -- (0.62) (0.35) (0.17) (0.15) (0.11)
Net realized gains .......... -- (4.63) (1.17) -- -- --
-------- -------- -------- -------- -------- --------
Total distributions ............ -- (5.25) (1.52) (0.17) (0.15) (0.11)
-------- -------- -------- -------- -------- --------
Redemption fees(c) ............. -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of
period ...................... $ 24.76 $ 29.76 $ 27.72 $ 23.00 $ 18.22 $ 14.72
======== ======== ======== ======== ======== ========
Total return(d) ................ (16.80)% 27.87% 27.38% 27.31% 24.72% 52.25%
RATIOS TO AVERAGE NET ASSETS(e)
Expenses ....................... 2.59%(f) 2.55%(f) 2.58%(f) 2.63%(f) 2.69%(f) 2.82%
Net investment income .......... 0.23% 1.02% 0.67% 0.70% 0.46% 1.20%
SUPPLEMENTAL DATA
Net assets, end of period
(000's) ..................... $451,155 $578,419 $489,722 $364,355 $258,365 $208,581
Portfolio turnover rate ........ 20.75% 92.26%(g) 51.95% 34.76% 58.74% 48.60%

(b) Based on average daily shares outstanding.

(d) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable, and is not annualized for periods less than
one year.

(e) Ratios are annualized for periods less than one year.

(f) Benefit of expense reduction rounds to less than 0.01%.

(g) Excludes the value of portfolio securities delivered as a result of
redemptions in-kind. See Note 11.

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 15

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS (CONTINUED)

SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2008 ---------------------------------------------------------
CLASS R (UNAUDITED) 2007 2006 2005 2004 2003
- ------- ---------------- ------- ------- ------- ------ ------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding
throughout the period)
Net asset value, beginning of
period ...................... $ 30.07 $ 27.96 $ 23.20 $ 18.39 $14.85 $ 9.98
------- ------- ------- ------- ------ ------
Income from investment
operations(a):
Net investment income(b) .... 0.10 0.44 0.29 0.20 0.16 0.17
Net realized and unrealized
gains (losses) ........... (5.09) 7.09 6.14 4.90 3.64 4.98
------- ------- ------- ------- ------ ------
Total from investment
operations .................. (4.99) 7.53 6.43 5.10 3.80 5.15
------- ------- ------- ------- ------ ------
Less distributions from:
Net investment income ....... -- (0.79) (0.50) (0.29) (0.26) (0.28)
Net realized gains .......... -- (4.63) (1.17) -- -- --
------- ------- ------- ------- ------ ------
Total distributions ............ -- (5.42) (1.67) (0.29) (0.26) (0.28)
------- ------- ------- ------- ------ ------
Redemption fees(c) ............. -- -- -- -- -- --
------- ------- ------- ------- ------ ------
Net asset value, end of
period ...................... $ 25.08 $ 30.07 $ 27.96 $ 23.20 $18.39 $14.85
======= ======= ======= ======= ====== ======
Total return(d) ................ (16.59)% 28.53% 27.99% 28.03% 25.28% 52.82%
RATIOS TO AVERAGE NET ASSETS(e)
Expenses ....................... 2.10%(f) 2.06%(f) 2.08%(f) 2.13%(f) 2.18%(f) 2.32%
Net investment income .......... 0.72% 1.51% 1.17% 1.20% 0.97% 1.70%
SUPPLEMENTAL DATA
Net assets, end of period
(000's) ..................... $62,621 $68,502 $40,779 $16,183 $5,220 $1,688
Portfolio turnover rate ........ 20.75% 92.26%(g) 51.95% 34.76% 58.74% 48.60%

(b) Based on average daily shares outstanding.

(d) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable, and is not annualized for periods less than
one year.

(e) Ratios are annualized for periods less than one year.

(f) Benefit of expense reduction rounds to less than 0.01%.

(g) Excludes the value of portfolio securities delivered as a result of
redemptions in-kind. See Note 11.

The accompanying notes are an integral part of these financial statements.

16 | Semiannual Report

Templeton Developing Markets Trust

FINANCIAL HIGHLIGHTS (CONTINUED)

SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2008 ----------------------------------------------------------------
ADVISOR CLASS (UNAUDITED) 2007 2006 2005 2004 2003
- ------------- ---------------- -------- -------- -------- --------- --------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding
throughout the period)
Net asset value, beginning of
period ...................... $ 30.48 $ 28.27 $ 23.40 $ 18.51 $ 14.93 $ 10.01
-------- -------- -------- -------- -------- --------
Income from investment
operations(a):
Net investment income(b) .... 0.15 0.62 0.43 0.32 0.24 0.26
Net realized and unrealized
gains (losses) ........... (5.14) 7.16 6.22 4.92 3.65 4.99
-------- -------- -------- -------- -------- --------
Total from investment
operations .................. (4.99) 7.78 6.65 5.24 3.89 5.25
-------- -------- -------- -------- -------- --------
Less distributions from:
Net investment income ....... -- (0.94) (0.61) (0.35) (0.31) (0.33)
Net realized gains .......... -- (4.63) (1.17) -- -- --
-------- -------- -------- -------- -------- --------
Total distributions ............ -- (5.57) (1.78) (0.35) (0.31) (0.33)
-------- -------- -------- -------- -------- --------
Redemption fees(c) ............. -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of
period ...................... $ 25.49 $ 30.48 $ 28.27 $ 23.40 $ 18.51 $ 14.93
======== ======== ======== ======== ======== ========
Total return(d) ................ (16.37)% 29.12% 28.63% 28.63% 25.98% 53.72%
RATIOS TO AVERAGE NET ASSETS(e)
Expenses ....................... 1.60%(f) 1.56%(f) 1.58%(f) 1.63%(f) 1.68%(f) 1.82%
Net investment income .......... 1.22% 2.01% 1.67% 1.70% 1.47% 2.20%
SUPPLEMENTAL DATA
Net assets, end of period
(000's) ..................... $410,840 $793,791 $460,225 $343,823 $199,101 $203,660
Portfolio turnover rate ........ 20.75% 92.26%(g) 51.95% 34.76% 58.74% 48.60%

(b) Based on average daily shares outstanding.

(d) Total return is not annualized for periods less than one year.

(e) Ratios are annualized for periods less than one year.

(f) Benefit of expense reduction rounds to less than 0.01%.

(g) Excludes the value of portfolio securities delivered as a result of
redemptions in-kind. See Note 11.

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 17

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED)

INDUSTRY SHARES VALUE
-------------------------------------------- ----------- --------------

COMMON STOCKS 76.9%
AUSTRIA 1.5%
Erste Bank der oesterreichischen
Sparkassen AG ....................... Commercial Banks 6,020 $ 374,804
(a) IMMOEAST AG ............................ Real Estate Management & Development 800,300 7,094,658
(a) Meinl European Land Ltd. ............... Real Estate Management & Development 299,296 3,369,591
OMV AG ................................. Oil, Gas & Consumable Fuels 476,634 37,420,325
Wienerberger AG ........................ Building Products 363,000 15,244,034
--------------
63,503,412
--------------
BRAZIL 1.8%
AES Tiete SA ........................... Independent Power Producers & Energy Traders 1,786,259 21,715,437
American Banknote SA ................... Commercial Services & Supplies 682 7,019
Banco Itau Holdings Financeira SA,
ADR ................................. Commercial Banks 22,350 453,928
Companhia de Bebidas das Americas
(AmBev) ............................. Beverages 97,640 5,871,068
Natura Cosmeticos SA ................... Personal Products 1,053,498 10,842,513
Souza Cruz SA .......................... Tobacco 1,373,799 39,160,812
--------------
78,050,777
--------------
CHINA 12.5%
Aluminum Corp. of China Ltd., H ........ Metals & Mining 85,384,675 98,446,020
China Construction Bank Corp., H ....... Commercial Banks 20,682,000 16,657,534
China International Marine Containers
(Group) Co. Ltd., B ................. Machinery 1,074,142 1,281,159
China Life Insurance Co. Ltd., H ....... Insurance 2,118,000 7,415,614
China Mengniu Dairy Co. Ltd. ........... Food Products 565,000 1,601,398
China Mobile Ltd. ...................... Wireless Telecommunication Services 8,119,000 109,124,525
China Petroleum and Chemical Corp., H .. Oil, Gas & Consumable Fuels 78,686,710 73,668,663
China Shipping Container Lines Co. Ltd.,
H ................................... Marine 13,002,000 5,085,908
China Shipping Development Co. Ltd.,
H ................................... Marine 754,000 2,262,798
China Telecom Corp. Ltd., H ............ Diversified Telecommunication Services 7,086,606 3,853,565
CNOOC Ltd. ............................. Oil, Gas & Consumable Fuels 36,486,307 62,797,299
Denway Motors Ltd. ..................... Automobiles 49,615,474 19,153,237
Dongfeng Motor Corp., H ................ Automobiles 44,010,000 17,610,209
FerroChina Ltd. ........................ Metals & Mining 803,178 720,260
(a) Honghua Group Ltd. ..................... Energy Equipment & Services 970,000 416,750
Industrial and Commercial Bank of China,
H ................................... Commercial Banks 14,556,000 9,950,108
Jiangxi Copper Co. Ltd., H ............. Metals & Mining 5,648,000 11,082,677
Nine Dragons Paper Holdings Ltd. ....... Paper & Forest Products 4,157,000 3,241,471
PetroChina Co. Ltd., H ................. Oil, Gas & Consumable Fuels 64,694,902 83,801,149
Shanghai Industrial Holdings Ltd. ...... Industrial Conglomerates 4,710,136 13,833,353
Shenzhen Investment Ltd., fgn. ......... Real Estate Management & Development 948,000 341,644
Sinotrans Ltd., H ...................... Air Freight & Logistics 1,976,000 486,572
Soho China Ltd. ........................ Real Estate Management & Development 1,872,784 1,020,787
(b) Soho China Ltd., 144A .................. Real Estate Management & Development 2,893,000 1,576,870
--------------
545,429,570
--------------

18 | Semiannual Report

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)

INDUSTRY SHARES VALUE
-------------------------------------------- ----------- --------------

COMMON STOCKS (CONTINUED)
EGYPT 0.1%
Telecom Egypt .......................... Diversified Telecommunication Services 1,125,289 $ 3,463,890
--------------
HONG KONG 0.9%
Cheung Kong (Holdings) Ltd. ............ Real Estate Management & Development 464,000 6,254,308
China Infrastructure Machinery Holdings
Ltd. ................................ Machinery 356,000 331,014
Citic Pacific Ltd. ..................... Industrial Conglomerates 1,111,000 4,096,476
Dairy Farm International Holdings
Ltd. ................................ Food & Staples Retailing 3,054,962 14,786,016
GOME Electrical Appliances Holdings
Ltd. ................................ Specialty Retail 16,386,000 7,775,588
VTech Holdings Ltd. .................... Communications Equipment 1,338,000 8,065,151
--------------
41,308,553
--------------
HUNGARY 2.2%
Magyar Telekom PLC ..................... Diversified Telecommunication Services 1,416,544 6,907,429
(a) MOL Hungarian Oil and Gas Nyrt. ........ Oil, Gas & Consumable Fuels 666,106 89,757,226
--------------
96,664,655
--------------
INDIA 4.3%
(a) Ashok Leyland Ltd. ..................... Machinery 3,686,000 2,459,909
Dr. Reddy's Laboratories Ltd. .......... Pharmaceuticals 1,521 23,757
Gail India Ltd. ........................ Gas Utilities 2,042,174 15,838,384
Great Eastern Shipping Co. Ltd. ........ Oil, Gas & Consumable Fuels 6,000 51,998
(a) Hindalco Industries Ltd. ............... Metals & Mining 3,845,927 12,730,171
Hindustan Unilever Ltd. ................ Household Products 2,689,600 12,912,335
(a) Idea Cellular Ltd. ..................... Wireless Telecommunication Services 402,401 872,665
Infosys Technologies Ltd. .............. IT Services 478,100 19,319,450
National Aluminium Co. Ltd. ............ Metals & Mining 1,328,905 10,820,376
Oil & Natural Gas Corp. Ltd. ........... Oil, Gas & Consumable Fuels 1,895,081 35,963,720
Reliance Industries Ltd. ............... Oil, Gas & Consumable Fuels 537,254 26,196,295
Satyam Computer Services Ltd. .......... IT Services 143,696 1,463,236
Shipping Corp. of India Ltd. ........... Marine 857,617 4,344,021
Steel Authority of India Ltd. .......... Metals & Mining 55,764 181,139
Tata Consultancy Services Ltd. ......... IT Services 1,279,037 25,586,699
(a) Tata Steel Ltd. ........................ Metals & Mining 1,149,000 19,493,924
--------------
188,258,079
--------------
INDONESIA 0.4%
PT Astra International Tbk ............. Automobiles 1,435,000 2,996,068
PT Bank Central Asia Tbk ............... Commercial Banks 23,230,500 6,235,953
PT Telekomunikasi Indonesia, B ......... Diversified Telecommunication Services 9,611,500 7,609,973
--------------
16,841,994
--------------
ISRAEL 0.3%
(a) Taro Pharmaceutical Industries Ltd. .... Pharmaceuticals 1,355,956 12,813,784
--------------
JORDAN 0.0%(c)
Arab Bank PLC .......................... Commercial Banks 28,545 873,995
--------------
KENYA 0.0%(c)
(a, d) Safaricom Ltd., Reg S .................. Wireless Telecommunication Services 7,830,350 888,040
--------------

Semiannual Report | 19

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)

INDUSTRY SHARES VALUE
-------------------------------------------- ----------- --------------

COMMON STOCKS (CONTINUED)
KUWAIT 0.2%
National Bank of Kuwait ................ Commercial Banks 1,290,000 $ 8,858,286
(e) National Mobile Telecommunications
Co. ................................. Wireless Telecommunication Services 20,000 172,049
--------------
9,030,335
--------------
MALAYSIA 0.1%
Sime Darby Berhad ...................... Industrial Conglomerates 1,105,500 3,129,572
--------------
MEXICO 4.7%
Alfa SAB de CV ......................... Industrial Conglomerates 1,598,685 11,431,357
America Movil SAB de CV, L, ADR ........ Wireless Telecommunication Services 1,156,592 61,010,228
Consorcio ARA SAB de CV ................ Household Durables 2,322,754 2,143,942
Fomento Economico Mexicano SAB de CV,
ADR ................................. Beverages 297,700 13,548,327
Grupo Televisa SA ...................... Media 6,811,944 32,250,071
Kimberly Clark de Mexico SAB de CV, A .. Household Products 11,128,490 45,316,713
Telefonos de Mexico SAB de CV (Telmex),
L, ADR .............................. Diversified Telecommunication Services 1,031,440 24,424,499
(a) Telmex Internacional SAB De, ADR ....... Diversified Telecommunication Services 1,024,540 16,495,094
--------------
206,620,231
--------------
PAKISTAN 1.5%
Fauji Fertilizer Co. Ltd. .............. Chemicals 1,498,688 2,907,718
MCB Bank Ltd. .......................... Commercial Banks 5,663,412 27,102,997
Oil & Gas Development Co. Ltd. ......... Oil, Gas & Consumable Fuels 8,830,000 16,101,156
Pakistan Telecommunications Corp., A ... Diversified Telecommunication Services 34,361,019 19,467,885
--------------
65,579,756
--------------
PANAMA 0.0%(c)
Copa Holdings SA ....................... Airlines 28,100 791,296
--------------
PHILIPPINES 0.3%
San Miguel Corp., B .................... Beverages 14,610,229 13,357,551
--------------
POLAND 0.8%
(a) Grupa Lotos SA ......................... Oil, Gas & Consumable Fuels 70,400 875,458
(a) Polski Koncern Naftowy Orlen SA ........ Oil, Gas & Consumable Fuels 2,021,228 32,381,381
--------------
33,256,839
--------------
QATAR 0.6%
Qatar National Bank .................... Commercial Banks 398,536 24,959,815
--------------
RUSSIA 12.0%
Bank of Moscow ......................... Commercial Banks 69,375 3,224,112
Gazprom, ADR ........................... Oil, Gas & Consumable Fuels 1,523,500 88,401,087
Gazprom, ADR (London Exchange) ......... Oil, Gas & Consumable Fuels 1,150,836 66,863,572
LUKOIL, ADR ............................ Oil, Gas & Consumable Fuels 669,879 66,167,298
LUKOIL, ADR (London Exchange) .......... Oil, Gas & Consumable Fuels 342,898 33,844,033
Mining and Metallurgical Co. Norilsk
Nickel .............................. Metals & Mining 575,273 144,968,796
OAO TMK, GDR ........................... Energy Equipment & Services 61,000 2,399,740
Sberbank RF ............................ Commercial Banks 5,934,790 18,753,936

20 | Semiannual Report

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (continued)

INDUSTRY SHARES VALUE
-------------------------------------------- ----------- --------------

COMMON STOCKS (CONTINUED)
RUSSIA (CONTINUED)
(a) TGC-5 JSC .............................. Independent Power Producers & Energy Traders 171,175,819 $ 129,238
TNK-BP ................................. Oil, Gas & Consumable Fuels 21,239,470 47,045,426
(a, f) Unified Energy Systems ................. Electric Utilities 50,018,700 51,019,074
--------------
522,816,312
--------------
SINGAPORE 1.2%
ComfortDelGro Corp. Ltd. ............... Road & Rail 9,507,586 10,482,839
DBS Group Holdings Ltd. ................ Commercial Banks 569,000 7,888,081
Fraser and Neave Ltd. .................. Industrial Conglomerates 7,719,617 25,704,631
Keppel Corp. Ltd. ...................... Industrial Conglomerates 1,123,520 9,199,907
Singapore Airlines Ltd. ................ Airlines 91,000 983,278
--------------
54,258,736
--------------
SOUTH AFRICA 4.7%
ABSA Group Ltd. ........................ Commercial Banks 181,000 1,896,367
Barloworld Ltd. ........................ Industrial Conglomerates 764,505 7,813,529
(a) Eqstra Holdings Ltd. ................... Machinery 1,711,641 2,744,311
Foschini Ltd. .......................... Specialty Retail 4,151,462 15,672,399
Impala Platinum Holdings Ltd. .......... Metals & Mining 29,040 1,146,389
(a) Imperial Holdings Ltd. ................. Distributors 1,711,641 11,534,853
JD Group Ltd. .......................... Specialty Retail 2,730,665 9,157,452
Lewis Group Ltd. ....................... Specialty Retail 3,711,957 15,649,260
MTN Group Ltd. ......................... Wireless Telecommunication Services 2,972,544 47,279,684
Naspers Ltd., N ........................ Media 254,000 5,548,898
Remgro Ltd. ............................ Diversified Financial Services 2,184,297 52,434,290
Sasol .................................. Oil, Gas & Consumable Fuels 26,346 1,551,646
Standard Bank Group Ltd. ............... Commercial Banks 2,068,388 20,161,994
(a) Steinhoff International Holdings Ltd. .. Household Durables 1,455,533 2,960,343
Telkom South Africa Ltd. ............... Diversified Telecommunication Services 351,980 6,362,845
Tiger Brands Ltd. ...................... Food Products 30,950 557,515
--------------
202,471,775
--------------
SOUTH KOREA 6.0%
(a) CJ Corp. ............................... Industrial Conglomerates 10,610 628,591
Daewoo Shipbuilding & Marine Engineering
Co. Ltd. ............................ Machinery 66,140 2,584,927
GS Holdings Corp. ...................... Oil, Gas & Consumable Fuels 494,580 18,904,157
Hanjin Heavy Industries & Construction
Holding ............................. Machinery 38,917 1,673,450
Kangwon Land Inc. ...................... Hotels, Restaurants & Leisure 898,334 19,657,763
LG Electronics Inc. .................... Household Durables 65,580 7,425,924
POSCO .................................. Metals & Mining 44,572 23,169,774
Samsung Electronics Co. Ltd. ........... Semiconductors & Semiconductor Equipment 59,055 35,269,350
Samsung Heavy Industries Co. Ltd. ...... Machinery 967,920 34,499,203
Shinhan Financial Group Co. Ltd. ....... Commercial Banks 173,150 7,826,082
SK Energy Co. Ltd. ..................... Oil, Gas & Consumable Fuels 826,541 92,013,403
SK Telecom Co. Ltd. .................... Wireless Telecommunication Services 494 89,925
SKC Co. Ltd. ........................... Household Durables 62,637 1,047,441
STX Pan Ocean Co. Ltd. ................. Marine 7,617,000 15,102,986
--------------
259,892,976
--------------

Semiannual Report | 21

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (continued)

INDUSTRY SHARES VALUE
-------------------------------------------- ----------- --------------

COMMON STOCKS (CONTINUED)
SWEDEN 1.0%
Oriflame Cosmetics SA, SDR ............. Personal Products 671,635 $ 43,204,330
--------------
TAIWAN 5.9%
Acer Inc. .............................. Computers & Peripherals 5,068,000 9,984,726
Advantech Co. Ltd. ..................... Computers & Peripherals 390,000 1,002,207
Asustek Computer Inc. .................. Computers & Peripherals 901,000 2,451,903
AU Optronics Corp. ..................... Electronic Equipment & Instruments 8,151,000 12,809,366
Catcher Technology Co. Ltd. ............ Computers & Peripherals 172,000 490,166
Compal Communications Inc. ............. Communications Equipment 3,893,000 4,707,050
Compal Electronics Inc. ................ Computers & Peripherals 8,491,000 9,175,528
Delta Electronics Inc. ................. Electronic Equipment & Instruments 2,761,000 7,686,374
KYE Systems Corp. ...................... Computers & Peripherals 26,000 34,007
MediaTek Inc. .......................... Semiconductors & Semiconductor Equipment 2,458,000 28,343,162
Merry Electronics Co. Ltd. ............. Household Durables 3,025,000 5,381,676
Novatek Microelectronics Corp. Ltd. .... Semiconductors & Semiconductor Equipment 6,828,979 19,843,704
President Chain Store Corp. ............ Food & Staples Retailing 18,785,164 62,507,876
Shin Zu Shing Co. Ltd. ................. Machinery 447,000 2,363,638
Siliconware Precision Industries Co. ... Semiconductors & Semiconductor Equipment 20,080,377 29,604,878
Sunplus Technology Co. Ltd. ............ Semiconductors & Semiconductor Equipment 8,572,243 8,303,098
(a) Taiwan Semiconductor Manufacturing Co.
Ltd. ................................ Semiconductors & Semiconductor Equipment 23,366,421 50,038,460
--------------
254,727,819
--------------
THAILAND 2.8%
Kasikornbank Public Co. Ltd., fgn. ..... Commercial Banks 9,851,887 21,218,542
Precious Shipping Public Co. Ltd.,
fgn. ................................ Marine 142,100 101,549
PTT Aromatics & Refining Public Co.
Ltd., fgn. .......................... Oil, Gas & Consumable Fuels 5,144,134 3,560,732
PTT Public Co. Ltd., fgn. .............. Oil, Gas & Consumable Fuels 2,930,500 27,174,843
Siam Cement Public Co. Ltd., fgn. ...... Construction Materials 6,131,496 36,499,183
Siam Commercial Bank Public Co. Ltd.,
fgn. ................................ Commercial Banks 2,674,761 6,200,837
Thai Beverages Co. Ltd., fgn. .......... Beverages 156,747,598 28,228,278
--------------
122,983,964
--------------
TURKEY 6.7%
Akbank TAS ............................. Commercial Banks 28,346,863 98,154,920
Anadolu Efes Biracilik Ve Malt Sanayii
AS .................................. Beverages 1,666,459 14,425,860
Arcelik AS, Br. ........................ Household Durables 7,795,277 27,246,864
Haci Omer Sabanci Holding AS ........... Diversified Financial Services 100,000 341,364
(a) KOC Holding AS ......................... Industrial Conglomerates 423,021 1,153,851
(a) Trakya Cam Sanayii AS .................. Building Products 1,491,840 1,608,190
Tupras-Turkiye Petrol Rafineleri AS .... Oil, Gas & Consumable Fuels 3,392,395 78,264,727
(a) Turk Hava Yollari Anonim Ortakligi ..... Airlines 5,759,476 23,517,664
Turkcell Iletisim Hizmetleri AS ........ Wireless Telecommunication Services 3,594,128 20,546,261
Turkiye Is Bankasi (Isbank), C ......... Commercial Banks 924,000 3,018,375
Turkiye Vakiflar Bankasi T.A.O., D ..... Commercial Banks 16,295,327 21,159,306
--------------
289,437,382
--------------

22 | Semiannual Report

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (continued)

INDUSTRY SHARES VALUE
-------------------------------------------- ----------- --------------

COMMON STOCKS (CONTINUED)
UKRAINE 0.2%
(a) Kernel Holding SA ...................... Food Products 204,117 $ 3,524,874
(a, b) MHP SA, GDR, 144A ...................... Food Products 202,124 3,688,763
--------------
7,213,637
--------------
UNITED ARAB EMIRATES 0.3%
Aldar Properties PJSC .................. Real Estate Management & Development 2,134,000 7,262,357
Sorouh Real Estate Co. ................. Real Estate Management & Development 572,000 1,442,050
Union National Bank .................... Commercial Banks 1,429,220 3,564,246
(a) Union Properties ....................... Real Estate Management & Development 270,000 379,303
--------------
12,647,956
--------------
UNITED KINGDOM 3.9%
Anglo American PLC ..................... Metals & Mining 1,942,493 135,993,122
HSBC Holdings PLC ...................... Commercial Banks 2,059,822 31,938,502
--------------
167,931,624
--------------
TOTAL COMMON STOCKS
(COST $ 2,779,860,198) ............ 3,342,408,655
--------------
DIRECT EQUITY INVESTMENTS
(COST $4,447,586) 0.1%
HONG KONG 0.1%
(a, f, g, h) Mayfair Hanoi, Ltd., 37.5% equity owned
through HEA Holdings Ltd., a wholly
owned investment .................... Real Estate Management & Development -- 6,182,235
--------------
PREFERRED STOCKS 18.5%
BRAZIL 18.2%
Banco Bradesco SA, ADR, pfd. ........... Commercial Banks 3,174,941 64,959,293
Companhia Vale do Rio Doce, ADR,
pfd., A ............................. Metals & Mining 10,559,011 315,080,888
Itausa - Investimentos Itau SA, pfd. ... Commercial Banks 272,500 1,728,621
Petroleo Brasileiro SA, ADR, pfd. ...... Oil, Gas & Consumable Fuels 5,167,040 299,429,968
Tam SA, pfd. ........................... Airlines 46,100 871,851
Unibanco - Uniao de Bancos Brasileiros
SA, GDR, pfd. ....................... Commercial Banks 533,936 67,772,497
Usinas Siderurgicas de Minas Gerais SA,
pfd., A ............................. Metals & Mining 860,357 42,395,336
--------------
792,238,454
--------------
CHILE 0.3%
Embotelladora Andina SA, pfd., A ....... Beverages 4,939,118 11,765,026
--------------
TOTAL PREFERRED STOCKS
(COST $244,447,105) ................ 804,003,480
--------------
TOTAL INVESTMENTS BEFORE
SHORT TERM INVESTMENTS
(COST $3,028,754,889) ............... 4,152,594,370
--------------

Semiannual Report | 23

Templeton Developing Markets Trust

STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (continued)

PRINCIPAL
AMOUNT VALUE
------------ --------------

SHORT TERM INVESTMENTS 3.4%
U.S. GOVERNMENT AND AGENCY SECURITIES
3.4%
(i) FHLMC, 7/01/08 ......................... $ 32,474,000 $ 32,474,000
(i) FHLB, 7/01/08 - 7/11/08 ................ 115,000,000 114,975,810
--------------
TOTAL U.S. GOVERNMENT AND AGENCY
SECURITIES (COST $147,440,978) ...... 147,449,810
--------------
TOTAL INVESTMENTS
(COST $3,176,195,867) 98.9% ......... 4,300,044,180
OTHER ASSETS, LESS LIABILITIES 1.1% .... 47,403,969
--------------
NET ASSETS 100.0% ...................... $4,347,448,149
==============

SELECTED PORTFOLIO ABBREVIATIONS

ADR - American Depository Receipt
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corp.
GDR - Global Depository Receipt
SDR - Swedish Depository Receipt

(a) Non-income producing for the twelve months ended June 30, 2008.

(b) Security was purchased pursuant to Rule 144A under the Securities Act of
1933 and may be sold in transactions exempt from registration only to
qualified institutional buyers or in a public offering registered under the
Securities Act of 1933. These securities have been deemed liquid under
guidelines approved by the Fund's Board of Trustees. At June 30, 2008, the
aggregate value of these securities was $5,265,633, representing 0.12% of
net assets.

(d) Security was purchased pursuant to Regulation S under the Securities Act of
1933, which exempts from registration securities offered and sold outside
of the United States. Such a security cannot be sold in the United States
without either an effective registration statement filed pursuant to the
Securities Act of 1933, or pursuant to an exemption from registration. The
security has been deemed liquid under guidelines approved by the Fund's
Board of Trustees. At June 30, 2008, the value of this security was
$888,040, representing 0.02% of net assets.

(e) A portion or all of the security purchased on a delayed delivery basis. See
Note 1(c).

(f) See Note 8 regarding restricted securities.

(g) See Note 9 regarding holdings of 5% voting securities.

(h) See Note 10 regarding other considerations - security board member.

(i) The security is traded on a discount basis with no stated coupon rate.

The accompanying notes are an integral part of these financial statements.

24 | Semiannual Report

Templeton Developing Markets Trust

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2008 (unaudited)

Assets:
Investments in securities:
Cost - Unaffiliated issuers ..................... $3,171,748,281
Cost - Controlled affiliated issuers (Note 9) ... 4,447,586
--------------
Total cost of investments ....................... $3,176,195,867
==============
Value - Unaffiliated issuers .................... $4,293,861,945
Value - Controlled affiliated issuers (Note 9) .. 6,182,235
--------------
Total value of investments ...................... 4,300,044,180
Cash ............................................... 4,176,116
Foreign currency, at value (cost $509,694) ......... 501,499
Receivables:
Investment securities sold ...................... 62,058,106
Capital shares sold ............................. 6,660,420
Dividends ....................................... 8,795,930
Foreign tax ..................................... 690,386
--------------
Total assets ................................. 4,382,926,637
--------------
Liabilities:
Payables:
Investment securities purchased ................. 5,462,249
Capital shares redeemed ......................... 18,888,004
Affiliates ...................................... 7,834,396
Accrued expenses and other liabilities ............. 3,293,839
--------------
Total liabilities ............................ 35,478,488
--------------
Net assets, at value ...................... $4,347,448,149
--------------
Net assets consist of:
Paid-in capital .................................... $3,137,533,946
Distributions in excess of net investment income ... (24,391,476)
Net unrealized appreciation (depreciation) ......... 1,123,919,935
Accumulated net realized gain (loss) ............... 110,385,744
--------------
Net assets, at value ...................... $4,347,448,149
==============

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 25

Templeton Developing Markets Trust

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
June 30, 2008 (unaudited)

CLASS A:
Net assets, at value ................................................... $3,385,193,750
--------------
Shares outstanding ..................................................... 132,894,274
--------------
Net asset value per share(a) ........................................... $ 25.47
--------------
Maximum offering price per share (net asset value per share / 94.25%) .. $ 27.02
--------------
CLASS B:
Net assets, at value ................................................... $ 37,638,160
--------------
Shares outstanding ..................................................... 1,515,545
--------------
Net asset value and maximum offering price per share(a) ................ $ 24.83
--------------
CLASS C:
Net assets, at value ................................................... $ 451,155,429
--------------
Shares outstanding ..................................................... 18,220,780
--------------
Net asset value and maximum offering price per share(a) ................ $ 24.76
--------------
CLASS R:
Net assets, at value ................................................... $ 62,620,779
--------------
Shares outstanding ..................................................... 2,496,791
--------------
Net asset value and maximum offering price per share(a) ................ $ 25.08
--------------
ADVISOR CLASS:
Net assets, at value ................................................... $ 410,840,031
--------------
Shares outstanding ..................................................... 16,120,164
--------------
Net asset value and maximum offering price per share(a) ................ $ 25.49
--------------

(a) Redemption price is equal to net asset value less contingent deferred sales
charges, if applicable, and redemption fees retained by the Fund.

The accompanying notes are an integral part of these financial statements.

26 | Semiannual Report

Templeton Developing Markets Trust

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the six months ended June 30, 2008 (unaudited)

Investment income:
Dividends (net of foreign taxes of $7,060,440) .............................. $ 69,697,609
Interest (net of foreign taxes of $2,170) ................................... 616,106
---------------
Total investment income ............................................... 70,313,715
---------------
Expenses:
Management fees (Note 3a) ................................................... 30,149,170
Administrative fees (Note 3b) ............................................... 2,156,848
Distribution fees: (Note 3c)
Class A .................................................................. 5,014,733
Class B .................................................................. 218,083
Class C .................................................................. 2,471,440
Class R .................................................................. 162,386
Transfer agent fees (Note 3e) ............................................... 4,361,585
Custodian fees (Note 4) ..................................................... 2,566,510
Reports to shareholders ..................................................... 264,128
Registration and filing fees ................................................ 119,172
Professional fees ........................................................... 154,167
Trustees' fees and expenses ................................................. 73,853
Other ....................................................................... 64,963
---------------
Total expenses ........................................................ 47,777,038
Expense reductions (Note 4) ........................................... (57,978)
---------------
Net expenses ....................................................... 47,719,060
---------------
Net investment income ........................................... 22,594,655
---------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments .............................................................. 25,480,448
Foreign currency transactions ............................................ 259,920
---------------
Net realized gain (loss) ........................................ 25,740,368
---------------
Net change in unrealized appreciation (depreciation) on:
Investments .............................................................. (1,029,520,173)
Translation of assets and liabilities denominated in foreign currencies .. 14,571
Change in deferred taxes on unrealized appreciation (depreciation) .......... 2,341,302
---------------
Net change in unrealized appreciation (depreciation) ............ (1,027,164,300)
---------------
Net realized and unrealized gain (loss) ........................................ (1,001,423,932)
---------------
Net increase (decrease) in net assets resulting from operations ................ $ (978,829,277)
===============

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 27

Templeton Developing Markets Trust

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS

SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2007
---------------- -----------------

Increase (decrease) in net assets:
Operations:
Net investment income ............................................................. $ 22,594,655 $ 103,968,198
Net realized gain (loss) from investments, foreign currency transactions,
and swap agreements ............................................................ 25,740,368 1,011,822,768
Net change in unrealized appreciation (depreciation) on investments, translation of
assets and liabilities denominated in foreign currencies, and deferred taxes ... (1,027,164,300) 355,140,870
--------------- --------------
Net increase (decrease) in net assets resulting from operations ............. (978,829,277) 1,470,931,836
--------------- --------------
Distributions to shareholders from:
Net investment income:
Class A ........................................................................ -- (119,782,375)
Class B ........................................................................ -- (1,019,709)
Class C ........................................................................ -- (10,672,975)
Class R ........................................................................ -- (1,463,391)
Advisor Class .................................................................. -- (20,739,845)
Net realized gains:
Class A ........................................................................ -- (629,506,866)
Class B ........................................................................ -- (7,441,868)
Class C ........................................................................ -- (78,249,563)
Class R ........................................................................ -- (8,852,009)
Advisor Class .................................................................. -- (104,138,795)
--------------- --------------
Total distributions to shareholders .................................................. -- (981,867,396)
--------------- --------------
Capital share transactions: (Note 2)
Class A ........................................................................ (520,863,531) (622,200,255)
Class B ........................................................................ (7,235,286) (6,130,838)
Class C ........................................................................ (31,728,807) 49,112,499
Class R ........................................................................ 5,971,031 24,082,343
Advisor Class .................................................................. (261,911,330) 286,241,307
--------------- --------------
Total capital share transactions ..................................................... (815,767,923) (268,894,944)
--------------- --------------
Redemption fees ...................................................................... 43,694 80,457
--------------- --------------
Net increase (decrease) in net assets ....................................... (1,794,553,506) 220,249,953
Net assets:
Beginning of period .................................................................. 6,142,001,655 5,921,751,702
--------------- --------------
End of period ........................................................................ $ 4,347,448,149 $6,142,001,655
=============== ==============
Distributions in excess of net investment income included in net assets:
End of period ........................................................................ $ (24,391,476) $ (46,986,131)
=============== ==============

The accompanying notes are an integral part of these financial statements.

28 | Semiannual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Templeton Developing Markets Trust (Fund) is registered under the Investment
Company Act of 1940, as amended, (1940 Act) as a diversified, open-end
investment company. The Fund offers five classes of shares: Class A, Class B,
Class C, Class R, and Advisor Class. Each class of shares differs by its initial
sales load, contingent deferred sales charges, distribution fees, voting rights
on matters affecting a single class and its exchange privilege.

The following summarizes the Fund's significant accounting policies.

A. SECURITY VALUATION

Securities listed on a securities exchange or on the NASDAQ National Market
System are valued at the last quoted sale price or the official closing price of
the day, respectively. Over-the-counter securities and listed securities for
which there is no reported sale are valued within the range of the most recent
quoted bid and ask prices. Securities that trade in multiple markets or on
multiple exchanges are valued according to the broadest and most representative
market.

Foreign securities are valued as of the close of trading on the foreign stock
exchange on which the security is primarily traded, or the NYSE, whichever is
earlier. If no sale is reported at that time, the foreign security will be
valued within the range of the most recent quoted bid and ask prices. The value
is then converted into its U.S. dollar equivalent at the foreign exchange rate
in effect at the close of the NYSE on the day that the value of the foreign
security is determined.

The Fund has procedures to determine the fair value of individual securities and
other assets for which market prices are not readily available or which may not
be reliably priced. Methods for valuing these securities may include:
fundamental analysis, matrix pricing, discounts from market prices of similar
securities, or discounts applied due to the nature and duration of restrictions
on the disposition of the securities. Due to the inherent uncertainty of
valuations of such securities, the fair values may differ significantly from the
values that would have been used had a ready market for such investments
existed. Occasionally, events occur between the time at which trading in a
security is completed and the close of the NYSE that might call into question
the availability (including the reliability) of the value of a portfolio
security held by the Fund. The investment manager monitors price movements
following the close of trading in foreign stock markets through a series of
country specific market proxies (such as baskets of American Depository
Receipts, futures contracts and exchange traded funds). These price movements
are measured against established trigger thresholds for each specific market
proxy to assist in determining if an event has occurred. If such an event
occurs, the securities may be valued using fair value procedures, which may
include the use of independent pricing services. All security valuation
procedures are approved by the Fund's Board of Trustees.

Semiannual Report | 29

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

B. FOREIGN CURRENCY TRANSLATION

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities, income and expense items denominated in foreign currencies are
translated into U.S. dollars at the exchange rate in effect on the transaction
date. Occasionally, events may impact the availability or reliability of foreign
exchange rates used to convert the U.S. dollar equivalent value. If such an
event occurs, the foreign exchange rate will be valued at fair value using
procedures established and approved by the Fund's Board of Trustees.

The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments on the
Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign denominated assets and liabilities other than investments in securities
held at the end of the reporting period.

C. SECURITIES PURCHASED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS

The Fund may purchase securities on a when-issued or delayed delivery basis,
with payment and delivery scheduled for a future date. These transactions are
subject to market fluctuations and are subject to the risk that the value at
delivery may be more or less than the trade date purchase price. Although the
Fund will generally purchase these securities with the intention of holding the
securities, it may sell the securities before the settlement date. Sufficient
assets have been segregated for these securities.

D. FOREIGN CURRENCY CONTRACTS

When the Fund purchases or sells foreign securities it may enter into foreign
exchange contracts to minimize foreign exchange risk from the trade date to the
settlement date of the transactions. A foreign exchange contract is an agreement
between two parties to exchange different currencies at an agreed upon exchange
rate at a future date. Realized and unrealized gains and losses on these
contracts are included in the Statement of Operations.

The risks of these contracts include movement in the values of the foreign
currencies relative to the U.S. dollar and the possible inability of the
counterparties to fulfill their obligations under the contracts, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities.

30 | Semiannual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. INCOME AND DEFERRED TAXES

No provision has been made for U.S. income taxes because it is the Fund's policy
to qualify as a regulated investment company under the Internal Revenue Code and
to distribute to shareholders substantially all of its taxable income and net
realized gains.

Foreign securities held by the Fund may be subject to foreign taxation on
dividend and interest income received. Foreign taxes, if any, are recorded based
on the tax regulations and rates that exist in the foreign markets in which the
Fund invests.

The Fund may be subject to a tax imposed on net realized gains on securities of
certain foreign countries. The Fund records an estimated deferred tax liability
for net unrealized gains on these securities in an amount that would be payable
if the securities were disposed of on the valuation date.

The Fund has reviewed the tax positions, taken on federal income tax returns,
for each of the three open tax years and as of June 30, 2008, and has determined
that no provision for income tax is required in the Fund's financial statements.

F. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Dividend income is
recorded on the ex-dividend date except that certain dividends from foreign
securities are recognized as soon as the Fund is notified of the ex-dividend
date. Distributions to shareholders are recorded on the ex-dividend date and are
determined according to income tax regulations (tax basis). Distributable
earnings determined on a tax basis may differ from earnings recorded in
accordance with accounting principles generally accepted in the United States of
America. These differences may be permanent or temporary. Permanent differences
are reclassified among capital accounts to reflect their tax character. These
reclassifications have no impact on net assets or the results of operations.
Temporary differences are not reclassified, as they may reverse in subsequent
periods.

Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class. Differences in per share
distributions, by class, are generally due to differences in class specific
expenses.

G. ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the amounts of income
and expenses during the reporting period. Actual results could differ from those
estimates.

Semiannual Report | 31

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

H. REDEMPTION FEES

A short term trading redemption fee will be imposed, with some exceptions, on
any fund shares that are redeemed or exchanged within seven calendar days
following their purchase date. The redemption fee is 2% of the amount redeemed.
Such fees are retained by the fund and accounted for as an addition to paid-in
capital.

I. GUARANTEES AND INDEMNIFICATIONS

Under the Fund's organizational documents, its officers and trustees are
indemnified by the Fund against certain liabilities arising out of the
performance of their duties to the Fund. Additionally, in the normal course of
business, the Fund enters into contracts with service providers that contain
general indemnification clauses. The Fund's maximum exposure under these
arrangements is unknown as this would involve future claims that may be made
against the Fund that have not yet occurred. Currently, the Fund expects the
risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

At June 30, 2008, there were an unlimited number of shares authorized (without
par value). Transactions in the Fund's shares were as follows:

SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2008 DECEMBER 31, 2007
---------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ---------------

CLASS A SHARES:
Shares sold ..................................... 13,561,837 $ 368,101,222 37,285,682 $ 1,162,545,150
Shares issued in reinvestment of distributions... -- -- 22,920,149 657,330,261
Shares redeemed in-kind (Note 11) ............... -- -- (11,489,267) (339,622,741)
Shares redeemed ................................. (33,052,302) (888,964,753) (68,737,250) (2,102,452,925)
----------- ------------- ----------- ---------------
Net increase (decrease) ......................... (19,490,465) $(520,863,531) (20,020,686) $ (622,200,255)
=========== ============= =========== ===============
CLASS B SHARES:
Shares sold ..................................... 62,116 $ 1,683,991 159,201 $ 5,149,716
Shares issued in reinvestment of distributions... -- -- 274,966 7,720,298
Shares redeemed ................................. (335,620) (8,919,277) (624,932) (19,000,852)
----------- ------------- ----------- ---------------
Net increase (decrease) ......................... (273,504) $ (7,235,286) (190,765) $ (6,130,838)
=========== ============= =========== ===============
CLASS C SHARES:
Shares sold ..................................... 998,901 $ 26,679,220 3,103,553 $ 93,927,906
Shares issued in reinvestment of distributions... -- -- 2,597,066 72,815,274
Shares redeemed ................................. (2,217,037) (58,408,027) (3,927,109) (117,630,681)
----------- ------------- ----------- ---------------
Net increase (decrease) ......................... (1,218,136) $ (31,728,807) 1,773,510 $ 49,112,499
=========== ============= =========== ===============

32 | Semiannual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST (CONTINUED)

CLASS R SHARES:
Shares sold ..................................... 798,786 $ 21,489,512 1,366,811 $ 42,058,022
Shares issued in reinvestment of distributions .. -- -- 346,329 9,826,080
Shares redeemed ................................. (580,420) (15,518,481) (893,078) (27,801,759)
----------- ------------- ---------- -------------
Net increase (decrease) ......................... 218,366 $ 5,971,031 820,062 $ 24,082,343
=========== ============= ========== =============
ADVISOR CLASS SHARES:
Shares sold ..................................... 1,929,594 $ 52,269,609 13,704,826 $ 412,287,369
Shares issued in reinvestment of distributions .. -- -- 2,426,800 69,817,046
Shares redeemed ................................. (11,854,536) (314,180,939) (6,367,684) (195,863,108)
----------- ------------- ---------- -------------
Net increase (decrease) ......................... (9,924,942) $(261,911,330) 9,763,942 $ 286,241,307
=========== ============= ========== =============

3. TRANSACTIONS WITH AFFILIATES

Franklin Resources, Inc. is the holding company for various subsidiaries that
together are referred to as Franklin Templeton Investments. Certain officers and
trustees of the Fund are also officers and/or directors of the following
subsidiaries:

SUBSIDIARY AFFILIATION
- ---------- ---------------------

Templeton Asset Management Ltd. (TAML) Investment manager
Franklin Templeton Services, LLC (FT Services) Administrative manager
Franklin Templeton Distributors, Inc. (Distributors) Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services) Transfer agent

A. MANAGEMENT FEES

Effective March 1, 2008, the Fund pays an investment management fee to TAML
based on the average daily net assets of the Fund as follows:

ANNUALIZED FEE RATE NET ASSETS
- ------------------- -----------------------------------------------------

1.250% Up to and including $1 billion
1.200% Over $1 billion, up to and including $5 billion
1.150% Over $5 billion, up to and including $7.5 billion
1.125% Over $7.5 billion, up to and including $10 billion
1.100% Over $10 billion, up to and including $15 billion
1.050% Over $15 billion, up to and including $20 billion
1.000% In excess of $20 billion

Semiannual Report | 33

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES (CONTINUED)

A. MANAGEMENT FEES (CONTINUED)

Prior to March 1, 2008, the Fund paid fees to TAML based on the average daily
net assets of the Fund as follows:

ANNUALIZED FEE RATE NET ASSETS
- ------------------- -----------------------------------------------------

1.250% Up to and including $1 billion
1.200% Over $1 billion, up to and including $5 billion
1.150% Over $5 billion, up to and including $10 billion
1.100% Over $10 billion, up to and including $15 billion
1.050% Over $15 billion, up to and including $20 billion
1.000% In excess of $20 billion

B. ADMINISTRATIVE FEES

The Fund pays an administrative fee to FT Services based on the Fund's average
daily net assets as follows:

ANNUALIZED FEE RATE NET ASSETS
- ------------------- -----------------------------------------------------

0.150% Up to and including $200 million
0.135% Over $200 million, up to and including $700 million
0.100% Over $700 million, up to and including $1.2 billion
0.075% In excess of $1.2 billion

C. DISTRIBUTION FEES

The Fund's Board of Trustees has adopted distribution plans for each share
class, with the exception of Advisor Class shares, pursuant to Rule 12b-1 under
the 1940 Act. Under the Fund's Class A reimbursement distribution plan, the Fund
reimburses Distributors for costs incurred in connection with the servicing,
sale and distribution of the Fund's shares up to the maximum annual plan rate.
Under the Class A reimbursement distribution plan, costs exceeding the maximum
for the current plan year cannot be reimbursed in subsequent periods.

In addition, under the Fund's Class B, C, and R compensation distribution plans,
the Fund pays Distributors for costs incurred in connection with the servicing,
sale and distribution of the Fund's shares up to the maximum annual plan rate
for each class.

The maximum annual plan rates, based on the average daily net assets, for each
class, are as follows:

Class A... 0.35%
Class B... 1.00%
Class C... 1.00%
Class R... 0.50%

34 | Semiannual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES (CONTINUED)

D. SALES CHARGES/UNDERWRITING AGREEMENTS

Distributors has advised the Fund of the following commission transactions
related to the sales and redemptions of the Fund's shares for the period:

Sales charges retained net of commissions paid to
unaffiliated broker/dealers ..................... $209,253
Contingent deferred sales charges retained ......... $110,219

E. TRANSFER AGENT FEES

For the period ended June 30, 2008, the Fund paid transfer agent fees of
$4,361,585, of which $1,819,404 was retained by Investor Services.

4. EXPENSE OFFSET ARRANGEMENT

The Fund has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Fund's custodian expenses. During the period ended June 30, 2008, the
custodian fees were reduced as noted in the Statement of Operations.

5. INCOME TAXES

For tax purposes, capital losses may be carried over to offset future capital
gains, if any. At December 31, 2007, the Fund had tax basis capital losses of
$1,902,640 from the merged Templeton Vietnam and Southeast Asia Fund and
Templeton Emerging Markets Appreciation Fund which may be carried over to offset
future capital gains, subject to certain limitations under the Internal Revenue
Code.

For tax purposes, realized currency losses occurring subsequent to October 31,
may be deferred and treated as occurring on the first day of the following
fiscal year. At December 31, 2007, the Fund deferred realized currency losses of
$2,862,094.

At June 30, 2008, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:

Cost of investments ......................... $3,251,230,149
==============
Unrealized appreciation ..................... $1,423,131,840
Unrealized depreciation ..................... (374,317,809)
--------------
Net unrealized appreciation (depreciation)... $1,048,814,031
==============

Semiannual Report | 35

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5. INCOME TAXES (CONTINUED)

Net investment income (loss) differs for financial statement and tax purposes
primarily due to differing treatments of foreign currency transactions, passive
foreign investment company shares, and foreign taxes paid on net realized gains.

Net realized gains (losses) differ for financial statement and tax purposes
primarily due to differing treatments of wash sales, foreign currency
transactions, passive foreign investment company shares, and foreign taxes paid
on net realized gains.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short term securities) for the
period ended June 30, 2008, aggregated $1,029,911,929 and $1,915,433,781,
respectively.

7. CONCENTRATION OF RISK

Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities.

8. RESTRICTED SECURITIES

The Fund may invest in securities that are restricted under the Securities Act
of 1933 (1933 Act) or which are subject to legal, contractual, or other agreed
upon restrictions on resale. Restricted securities are often purchased in
private placement transactions, and cannot be sold without prior registration
unless the sale is pursuant to an exemption under the 1933 Act. Disposal of
these securities may require greater effort and expense, and prompt sale at an
acceptable price may be difficult. The Fund may have registration rights for
restricted securities. The issuer generally incurs all registration costs.

At June 30, 2008, the Fund held investments in restricted securities, excluding
144A securities deemed to be liquid, valued in accordance with procedures
approved by the Fund's Board of Trustees as reflecting fair value, as follows:

ACQUISITION
SHARES ISSUER DATE COST VALUE
- ---------- ------------------------------------------------- ----------- ----------- ----------

- -- Mayfair Hanoi, Ltd., 37.5% equity owned through
HEA Holdings, Ltd. ........................... 10/31/96 $ 4,447,586 $ 6,182,235
50,018,700 Unified Energy Systems .......................... 7/30/96 60,368,959 51,019,074
-----------
TOTAL RESTRICTED SECURITIES (1.32% of Net Assets) $57,201,309
===========

36 | Semiannual Report

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

9. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES

The 1940 Act defines "affiliated companies" to include investments in portfolio
companies in which a fund owns 5% or more of the outstanding voting securities.
Investments in "affiliated companies" for the Fund for the period ended June 30,
2008, were as shown below.

NUMBER OF SHARES NUMBER OF SHARES VALUE AT REALIZED
HELD AT BEGINNING GROSS GROSS HELD AT END END OF INVESTMENT CAPITAL
NAME OF ISSUER OF PERIOD ADDITIONS REDUCTIONS OF PERIOD PERIOD INCOME GAIN (LOSS)
- --------------------------- ----------------- --------- ---------- ---------------- ---------- ---------- -----------

CONTROLLED AFFILIATES(a)
Mayfair Hanoi, Ltd., 37.5%
equity owned through
HEA Holdings, Ltd. ..... -- -- -- -- $6,182,235 $-- $--
========== === ===
TOTAL AFFILIATED SECURITIES
(0.14% OF NET ASSETS)

(a) Issuer in which the Fund owns 25% or more of the outstanding voting
securities.

10. OTHER CONSIDERATIONS

Officers, directors or employees of the Fund's Investment Manager, may serve
from time to time as members of boards of directors of companies in which the
Fund invests. Such participation may result in the possession by the Investment
Manager of material non-public information which, pursuant to the Fund's
policies and the requirements of applicable securities laws, could prevent the
Fund from trading in the securities of such companies for limited or extended
periods of time.

11. REDEMPTIONS IN-KIND

During the year ended December 31, 2007, the Fund realized $111,257,407 of net
gains resulting from a redemption in-kind in which a shareholder redeemed Fund
shares for securities held by the Fund rather than for cash. Because such gains
are not taxable to the Fund, and are not distributed to shareholders, they have
been reclassified from accumulated net realized gains to paid-in capital.

12. FAIR VALUE MEASUREMENTS

The Fund adopted Financial Accounting Standards Board (FASB) issued FASB
Statement No. 157, "Fair Value Measurement" (SFAS 157), on January 1, 2008. SFAS
157 defines fair value, establishes a framework for measuring fair value, and
expands disclosures about fair value measurements. The Fund has determined that
the implementation of SFAS 157 did not have a material impact on the Fund's
financial statements.

Semiannual Report | 37

Templeton Developing Markets Trust

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

12. FAIR VALUE MEASUREMENTS (CONTINUED)

SFAS 157 establishes a fair value hierarchy that distinguishes between market
data obtained from independent sources (observable inputs) and the Fund's own
market assumptions (unobservable inputs). These inputs are used in determining
the value of the Fund's investments and are summarized in the following fair
value hierarchy:

- - Level 1 - quoted prices in active markets for identical securities

- - Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speed, credit risk, etc.)

- - Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities.

The following is a summary of the inputs used as of June 30, 2008, in valuing
the Fund's assets carried at fair value:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------------- ------------ ----------- --------------

ASSETS:
Investments in Securities .... $4,095,393,061 $147,449,810 $57,201,309 $4,300,044,180

At June 30, 2008, the reconciliation of assets in which significant unobservable
inputs (Level 3) were used in determining fair value, is as follows:

INVESTMENTS
IN SECURITIES
-------------

Beginning Balance - January 1, 2008 ............................ $ 5,507,295
Net realized gain (loss) .................................... --
Net change in unrealized appreciation (depreciation) ........ 674,940
Net purchases (sales) ....................................... --
Transfers in and/or out of Level 3 .......................... 51,019,074
-----------
Ending Balance ................................................. $57,201,309
Net change in unrealized appreciation (depreciation) ===========
attributable to assets still held at end of June 30, 2008 ... $ 674,940
===========

13. NEW ACCOUNTING PRONOUNCEMENT

In March 2008, FASB issued FASB Statement No. 161, "Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133"
(SFAS 161), which expands disclosures about derivative investments and hedging
activities. SFAS 161 is effective for fiscal years beginning after November 15,
2008, and interim periods within those fiscal years. The Fund is currently
evaluating the impact, if any, of applying the various provisions of SFAS 161.

38 | Semiannual Report

Templeton Developing Markets Trust

SHAREHOLDER INFORMATION

BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT

At a meeting held February 25, 2008, the Board of Trustees (Board), including a
majority of non-interested or independent Trustees, approved renewal of the
investment management agreement for the Fund. In reaching this decision, the
Board took into account information furnished throughout the year at regular
Board meetings, as well as information prepared specifically in connection with
the annual renewal review process. Information furnished and discussed
throughout the year included investment performance reports and related
financial information for the Fund, as well as periodic reports on shareholder
services, legal, compliance, pricing, brokerage commissions and execution and
other services provided by the Investment Manager (Manager) and its affiliates.
Information furnished specifically in connection with the renewal process
included a report for the Fund prepared by Lipper, Inc. (Lipper), an independent
organization, as well as a Fund profitability analysis report prepared by
management. The Lipper report compared the Fund's investment performance and
expenses with those of other mutual funds deemed comparable to the Fund as
selected by Lipper. The Fund profitability analysis report discussed the
profitability to Franklin Templeton Investments from its overall U.S. fund
operations, as well as on an individual fund-by-fund basis. Included with such
profitability analysis report was information on a fund-by-fund basis listing
portfolio managers and other accounts they manage, as well as information on
management fees charged by the Manager and its affiliates including management's
explanation of differences where relevant and a three-year expense analysis with
an explanation for any increase in expense ratios. Additional material
accompanying such report was a memorandum prepared by management describing
project initiatives and capital investments relating to the services provided to
the Fund by the Franklin Templeton Investments organization, as well as a
memorandum relating to economies of scale and a comparative analysis concerning
transfer agent fees charged the Fund.

In considering such materials, the independent Trustees received assistance and
advice from and met separately with independent counsel. In approving
continuance of the investment management agreement for the Fund, the Board,
including a majority of independent Trustees, determined that the existing
management fee structure was fair and reasonable and that continuance of the
investment management agreement was in the best interests of the Fund and its
shareholders. While attention was given to all information furnished, the
following discusses some primary factors relevant to the Board's decision.

NATURE, EXTENT AND QUALITY OF SERVICES. The Board was satisfied with the nature
and quality of the overall services provided by the Manager and its affiliates
to the Fund and its shareholders. In addition to investment performance and
expenses discussed later, the Board's opinion was based, in part, upon periodic
reports furnished them showing that the investment policies and restrictions for
the Fund were consistently complied with as well as other reports periodically
furnished the Board covering matters such as the compliance of portfolio
managers and other management personnel with the code of ethics adopted
throughout the Franklin Templeton fund complex, the adherence to fair value
pricing procedures established by the Board, and the accuracy of net asset value
calculations. The Board

Semiannual Report | 39

Templeton Developing Markets Trust

SHAREHOLDER INFORMATION (CONTINUED)

BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT (CONTINUED)

also noted the extent of benefits provided Fund shareholders from being part of
the Franklin Templeton family of funds, including the right to exchange
investments between the same class of funds without a sales charge, the ability
to reinvest Fund dividends into other funds and the right to combine holdings in
other funds to obtain a reduced sales charge. Favorable consideration was given
to management's continuous efforts and expenditures in establishing back-up
systems and recovery procedures to function in the event of a natural disaster,
it being noted that such systems and procedures had functioned smoothly during
the Florida hurricanes and blackouts experienced in recent years. Among other
factors taken into account by the Board were the Manager's best execution
trading policies, including a favorable report by an independent portfolio
trading analytical firm. Consideration was also given to the experience of each
Fund's portfolio management team, the number of accounts managed and general
method of compensation. In this latter respect, the Board noted that a primary
factor in management's determination of a portfolio manager's bonus compensation
was the relative investment performance of the funds he or she managed and that
a portion of such bonus was required to be invested in a predesignated list of
funds within such person's fund management area so as to be aligned with the
interests of Fund shareholders. The Board also took into account the quality of
transfer agent and shareholder services provided Fund shareholders by an
affiliate of the Manager, noting continuing expenditures by management to
increase and improve the scope of such services, periodic favorable reports on
such service conducted by third parties, the high industry ranking given to the
Franklin Templeton website, and the firsthand experience of individual Board
members who deal with the shareholder services department in their capacities as
shareholders in one or more of the various Franklin Templeton funds.

INVESTMENT PERFORMANCE. The Board placed significant emphasis on the investment
performance of the Fund in view of its importance to shareholders. While
consideration was given to performance reports and discussions with portfolio
managers at Board meetings during the year, particular attention in assessing
performance was given to the Lipper report furnished for the agreement renewal.
The Lipper report prepared for the Fund showed the investment performance of its
Class A shares during 2007, as well as during the previous 10 years ended
December 31, 2007, in comparison to a performance universe consisting of all
retail and institutional emerging market funds as selected by Lipper. The Board
noted that the Fund's total return during 2007 was in the lowest quintile of its
Lipper performance universe, and that its total return on an annualized basis
was either in the lowest or second-lowest quintile of such universe for the
previous three-, five- and 10-year periods. The Board found such performance to
be acceptable in light of the Fund's absolute levels of total return, which
during 2007 exceeded 28%, and on an annualized basis as shown in such Lipper
report exceeded 28% and 32%, respectively, for the previous three- and five-year
periods.

40 | Semiannual Report

Templeton Developing Markets Trust

SHAREHOLDER INFORMATION (CONTINUED)

BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT (CONTINUED)

COMPARATIVE EXPENSES. Consideration was given to a comparative analysis of the
management fees and total expense ratios of the Fund compared with those of a
group of other funds selected by Lipper as its appropriate Lipper expense group.
Prior to making such comparison, the Board relied upon a survey showing that the
scope of services covered under the Fund's investment management agreement was
similar to those provided by fund managers to other mutual fund groups. In
reviewing comparative costs, emphasis was given to the Fund's contractual
investment management fee in comparison with the contractual investment
management fee that would have been charged by other funds within its Lipper
expense group assuming they were similar in size to the Fund, as well as the
actual total expenses of the Fund in comparison with those of its Lipper expense
group. The Lipper contractual investment management fee analysis includes
administrative charges as being part of a management fee, and actual total
expenses, for comparative consistency, are shown by Lipper for Fund Class A
shares. The results of such expense comparisons showed that the contractual
investment management fee rate for the Fund was 20 basis points above the median
for the Lipper expense group, and its total actual expenses were 22 basis points
above the median of such expense group. The Board found such fee and expenses in
comparison to those of its Lipper expense group to be acceptable in view of
factors relating to the Fund's operations, such as the quality and experience of
its portfolio managers and research staff, the nature of the disciplined value
investment approach followed for the Fund and the depth of the Manager's
physical presence and coverage in emerging markets geographical areas.

MANAGEMENT PROFITABILITY. The Board also considered the level of profits
realized by the Manager and its affiliates in connection with the operation of
the Fund. In this respect, the Board reviewed the Fund profitability analysis
that addresses the overall profitability of Franklin Templeton's U.S. fund
business, as well as its profits in providing management and other services to
the fund. Specific attention was given to the methodology followed in allocating
costs to the Fund, it being recognized that allocation methodologies are
inherently subjective and various allocation methodologies may each be
reasonable while producing different results. In this respect, the Board noted
that, while being continuously refined and reflecting changes in the Manager's
own cost accounting, the cost allocation methodology was consistent with that
followed in profitability report presentations for the Fund made in prior years
and that the Fund's independent registered public accounting firm had been
engaged by the Manager to perform certain procedures on a biennial basis,
specified and approved by the Manager and the Fund's Board solely for their
purposes and use in reference to the profitability analysis. In reviewing and
discussing such analysis, management discussed with the Board its belief that
costs incurred in establishing the infrastructure necessary for the type of
mutual fund operations conducted by the Manager and its affiliates may not be
fully reflected in the expenses allocated to the Fund in determining its
profitability, as well as the fact that the level of profits, to a certain
extent, reflected operational cost savings and efficiencies initiated by
management. The Board also took into account management's expenditures in
improving shareholder services provided the Fund, as well as the need to meet
additional

Semiannual Report | 41

Templeton Developing Markets Trust

SHAREHOLDER INFORMATION (CONTINUED)

BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENT (CONTINUED)

regulatory and compliance requirements resulting from the Sarbanes-Oxley Act and
recent SEC and other regulatory requirements. In addition, the Board considered
a third-party study comparing the profitability of the Manager's parent on an
overall basis as compared to other publicly held managers broken down to show
profitability from management operations exclusive of distribution expenses, as
well as profitability including distribution expenses. The Board also considered
the extent to which the Manager and its affiliates might derive ancillary
benefits from fund operations, including its interest in a joint venture entity
that financed up-front commissions paid to brokers/dealers who sold fund Class B
shares prior to February 2005, when the offering of such shares was
discontinued, as well as potential benefits resulting from allocation of fund
brokerage and the use of "soft" commission dollars to pay for research. Based
upon its consideration of all these factors, the Board determined that the level
of profits realized by the Manager and its affiliates from providing services to
the Fund was not excessive in view of the nature, quality and extent of services
provided.

ECONOMIES OF SCALE. The Board also considered whether economies of scale are
realized by the Manager and its affiliates as the Fund grows larger and the
extent to which this is reflected in the level of management fees charged. While
recognizing that any precise determination is inherently subjective, the Board
noted that based upon the Fund profitability analysis, it appears that as some
funds get larger, at some point economies of scale do result in the Manager
realizing a larger profit margin on management services provided such a fund.
The Board also noted that economies of scale are shared with a fund and its
shareholders through management fee breakpoints so that as a fund grows in size,
its effective management fee rate declines. The Fund's management advisory fee
schedule provided a rate of 1.25% on the first $1 billion of Fund net assets;
1.20% on the next $4 billion of Fund net assets; 1.15% on the next $5 billion of
Fund net assets; 1.1% on the next $5 billion of Fund net assets; 1.05% on the
next $5 billion of Fund net assets; and 1% on net assets in excess of $20
billion, and the Board decided to add an additional breakpoint of 1.125% on Fund
net assets between the $7.5 billion and $10 billion levels effective March 1,
2008. The Fund is also charged a separate fee for administrative services that
starts at 0.15% on the first $200 million of Fund net assets, and declines
through breakpoints to a fixed rate of 0.075% after net assets reach the $1.2
billion level. At the end of 2007, the Fund's net assets were approximately $6.1
billion, and to the extent economies of scale may be realized by the Manager and
its affiliates, the Board believes the schedules of management advisory and
administrative fees provide a sharing of benefits with the Fund and its
shareholders.

42 | Semiannual Report

Templeton Developing Markets Trust

SHAREHOLDER INFORMATION (CONTINUED)

PROXY VOTING POLICIES AND PROCEDURES

The Trust's investment manager has established Proxy Voting Policies and
Procedures (Policies) that the Trust uses to determine how to vote proxies
relating to portfolio securities. Shareholders may view the Trust's complete
Policies online at franklintempleton.com. Alternatively, shareholders may
request copies of the Policies free of charge by calling the Proxy Group collect
at 1-954/527-7678 or by sending a written request to: Franklin Templeton
Companies, LLC, 500 East Broward Boulevard, Suite 1500, Fort Lauderdale, FL
33394, Attention: Proxy Group. Copies of the Trust's proxy voting records are
also made available online at franklintempleton.com and posted on the U.S.
Securities and Exchange Commission's website at sec.gov and reflect the most
recent 12-month period ended June 30.

QUARTERLY STATEMENT OF INVESTMENTS

The Trust files a complete statement of investments with the U.S. Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
website at sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by calling
1-800/SEC-0330.

Semiannual Report | 43

This page intentionally left blank.

(FRANKLIN TEMPLETON INVESTMENTS (R) LOGO) One Franklin Parkway
San Mateo, CA 94403-1906

WANT TO RECEIVE THIS DOCUMENT FASTER VIA EMAIL?

Eligible shareholders can sign up for eDelivery at franklintempleton.com. See
inside for details.

SEMIANNUAL REPORT AND SHAREHOLDER LETTER
TEMPLETON DEVELOPING MARKETS TRUST

INVESTMENT MANAGER

Templeton Asset Management Ltd.

PRINCIPAL UNDERWRITER

Franklin Templeton Distributors, Inc.
1-800/DIAL BEN(R)
franklintempleton.com

SHAREHOLDER SERVICES

1-800/632-2301

Authorized for distribution only when accompanied or preceded by a prospectus.
Investors should carefully consider a fund's investment goals, risks, charges
and expenses before investing. Like any investment in securities, the value of
the Fund's portfolio will be subject to the risk of loss from market, currency,
economic, political and other factors. The Fund and its investors are not
protected from such losses by the investment manager. Therefore, investors who
cannot accept this risk should not invest in shares of the Fund. The prospectus
contains this and other information; please read it carefully before investing.

To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.

711 S2008 08/08

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal
executive officers and principal financial and accounting officer.

(d) N/A

(f) Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a copy
of its code of ethics that applies to its principal executive officers and
principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its
audit committee.

(2) The audit committee financial expert is David W. Niemiec and he is
"independent" as defined under the relevant Securities and Exchange Commission
Rules and Releases.

Item 4. Principal Accountant Fees and Services. N/A

Item 5. Audit Committee of Listed Registrants. N/A

Item 6. Schedule of Investments. N/A

Item 7. Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies. N/A

Item 8. Portfolio Managers of Closed-End Management Investment Companies. N/A

Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend
nominees to the Registrant's Board of Trustees that would require disclosure
herein.

Item 11. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision and
with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.

(b) Changes in Internal Controls. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.

Item 12. Exhibits.

(a)(1) Code of Ethics

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Galen G. Vetter, Chief Executive Officer - Finance and Administration, and
Laura F. Fergerson, Chief Financial Officer and Chief Accounting Officer

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
Galen G. Vetter, Chief Executive Officer - Finance and Administration, and Laura
F. Fergerson, Chief Financial Officer and Chief Accounting Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

TEMPLETON DEVELOPING MARKETS TRUST

By /s/GALEN G. VETTER
- ---------------------------
Galen G. Vetter
Chief Executive Officer -
Finance and Administration
Date August 27, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/GALEN G. VETTER
- ---------------------------
Galen G. Vetter
Chief Executive Officer -
Finance and Administration
Date August 27, 2008

By /s/LAURA F. FERGERSON
- ---------------------------
Laura F. Fergerson
Chief Financial Officer and
Chief Accounting Officer
Date August 27, 2008