Download The Philippine Advantage

The Philippines
Your Business Partner in Asia
THE PHILIPPINES at a glance
Land Area
Geography
Capital
Political System
Economic System
Population
Labor Force
Unemployment Rate
Literacy Rate
Number of College
Graduates Annually
Languages
Major Religion
Climate
Currency Unit
GDP Growth
Inflation
Credit Rating
: 300,000 sq. km. (archipelago of 7,107 islands)
: Archipelago surrounded by three major bodies of water namely: :
: Pacific Ocean on the east, South China Sea on the west and
north, and the Celebes Sea on the south.
: Manila
: Presidential with a bicameral congress and three (3) equal
branches: executive, legislative and judiciary.
: Free market economy
: 100 million (2013 estimate)
: 40.4 Million (2012)
: 7.0% (2012)
: 94.6%
: 500,000
: Filipino, English and other regional dialects
: 85% are Roman Catholics, 10% Protestants, 5% Muslims
: Tropical with temperatures ranging from 23-32 °C. Two distinct
seasons: Wet (June to October) & Dry (November to May)
: Philippine Peso
: 6.8% (2012) = US$ 257.0 Billion (current 2012 prices)
: 3.2% (2012)
: Investment Grade from Fitch, Standard & Poors, Moody’s, R&I
THE PHILIPPINE BOARD OF INVESTMENTS
Your Window to Infinite Opportunities in the Philippines.
The Board of Investments (BOI), as the national investment promotion
agency of the government, reflects the country’s keen interest in keeping
its doors open to investors – both foreign and domestic.
BOI’s efforts are based on the government’s set goals of encouraging more
economic activities that will take the country to a higher level of global
competitiveness, and opening more opportunities that will generate more
gainful employment for the people.
The BOI also seeks to attract quality investments that will encourage
technological innovations and provide support for industries to seize the
opportunities and challenges of global demands and competition.
10 Indicators of a Growing Philippine Economy
Credit
Ratings
Strengthened
Governance
and AntiCorruption
Measures
Stable and
Resilient
Economic
Growth
10
Dynamic
People
Improving
Global
Competitiv
eness
Ranking
Efficient
Revenue
Collection
Continuous
Inflow of
OFW
Remittances
Steady
Export
Growth
Steady
Investment
Flows
Robust
Domestic
Financial
Sector
Coupled with
Credit Growth
1. Stable and Resilient Economic Growth
9.0
8.0
7.0
6.0
5.0
GDP (2012)
6.6%
GDP (Q1, 2013)
7.8%
Headline inflation (2012)
(JAN – MAY)
3.2%
3.0%
4.0
3.0
2.0
1.0
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
GDP
Q3
2012
Source: National Statistical Coordination Board & National Statistics Office
2. Continuous Inflow of OFW Remittances
• 2011: OFW remittances crossed the US$20 Billion barrier with full
year record of US$20.12 Billion
• 2012: US$21.39 Billion, 6.3% higher than 2011 record
• Remittance drew strength from demand for skilled and
professional Filipinos abroad, along with better data capture
through banks and financial institutions
3. Steady Export Growth
Merchandise Exports:
• 2011: US$48.31 Billion
• 2012: US$ 51.99 Billion, 7.6% higher than 2011
Service Exports:
• 2011: US$11.9 Billion
• 2012: US$13.2 Billion, anchored on BPO sector with
direct employment of 772,000
Growth of 11.3% in Gross International Reserves to US$83.8
Billion in 2012.
4. Steady Investment Flows
2012 TOP SECTORS
(% of Total Investments)
1. Manufacturing (27%)
2. Electricity, Gas, Steam & Air Conditioning
(24%)
3. Real Estate Activities (19%)
4. Transportation & Storage (10%)
5. Accommodation & Food Service
Activities (7%)
2012 TOP SOURCES
(% of Total Foreign Investments)
1. Netherlands (37%)
2. Japan (23%)
3. U.S.A. (14%)
4. Singapore (5%)
5. South Korea (3%)
5. Robust Domestic Financial Sector
Coupled with Credit Growth
• Outstanding loans of universal and commercial banks amounted
to P3.62 Trillion by the end of 2012, highest ever in banking history.
• As of end 2012, non-performing loans ratio of universal and
commercial banks was at 1.87 percent (2.23 percent in 2011).
• Average bank lending rate: 5.7% (December 2012)
6. Efficient Revenue Collection
• The national government fiscal deficit for 2012 amounted to P242.8
Billion.
• The national government deficit in 2012 stood at 2.3% of GDP, better
than the programmed 2.6%.
• Revenue performance for the period Jan-Nov 2012 was 13% higher
compared to the same period in 2011.
7. Improving Global Competitiveness Ranking
Improvement in Rank
World Economic Forum (2012/2013)
Global Competitiveness Index
+10
(from #65 to 59;
out of 144 countries)
Economic Freedom of the World
(2012 Annual Report)
+16
(from #77 to 61;
out of 144 countries)
Index of Economic Freedom (2011-2012)
+10
(from #107 to 97;
out of 177 countries)
8. Dynamic People

Asia’s friendliest country

8th World’s friendliest country
~ HSBC World Explorer Survey 2011 ~
 12th largest population in the world


Set to become the world’s 16th largest economy, up 27
places from today
One of the new emerging countries due to favorable
demographics and strong economic fundamentals
~ HSBC’s “The World in 2050” Report
9. Strengthened Governance and
Anti-Corruption Measures
Improvement in Rank
World Bank (2010)
Government Effectiveness Indicator
+1
(from #51 to 52;
out of 207 countries )
Transparency International
Corruption Perceptions Index
+5
(from #134 to 129;
out of 182 countries)
10. Credit Ratings
Rating Agency
Current Rating
Fitch
BBB-/Stable
Standard & Poor
BBB-/Stable
Moody’s
Ba1/ Stable
Baa3…. Soon?
Japan Credit
Rating Agency
(JCRA)
BBB/ Stable
The Philippine Advantage
The Philippine Advantage
Rich Talent Pool
Robust Infrastructure
Strategic Business Location
First-Class Lifestyle
Attractive Investment Incentives
The Philippine Advantage
Rich Talent Pool
Our Professionals are :
• Highly Educated
• English Proficient
• Strongly Customer Service Oriented
• Highly Trainable
• With Fast Learning Curve
• Adaptable to Universal Cultures
• High Level of Commitment and Loyalty
We produce over 470,000 college graduates per year
across a wide range of disciplines.
• IT/Computer Sciences/Engineering - more than 100,000
college graduates per year
• In the business field - more than 110,000 graduates per
year,
• In the medical field - more than 73,000.
The Philippine Advantage
Robust Infrastructure
• 9 international and 20 domestic
airports,
• 3 connecting railways which span
across the Metro, and 12 roll-on/rolloff ports.
• Newly constructed roads such as the 94-kilometer four-lane Subic-Clark-Tarlac
Expressway (SCTEX), the 84-kilometer North Luzon Expressway (NLEX), the
42-kilometer STAR Tollway and Cavite Expressway (CAVITEX)
The Philippine Advantage
Strategic Business Location
The country’s location is a critical entry
point to over 500 million people in the
ASEAN Market and a natural gateway to
the East- Asian economies.
•
•
The country is likewise placed at the
crossroads of international shipping
and airlines.
Within Asia, the Philippines is
reachable within 3 to 4 hours by
plane.
The Philippine Advantage
First-Class Lifestyle
• Second home to expatriates
who enjoy the company of
the warmest people in the
region, the country's
openness to varied cultures
and a decidedly global
outlook.
• Accessible and affordable luxuries – value-for-money
housing, modern recreational facilities, first-rate
educational institutions adopting international
standards, business centers, hospitals, etc.
• A growing favorite tourist destination, as evidenced by
the steadily increasing tourist arrivals.
The Philippine Advantage
Attractive Investment Incentives
INCENTIVE
Income Tax Holiday
(ITH)
ITH Bonus
BOI
(Executive Order No. 226, as
amended)
4 – 6 years (max of 8 years)
3 years provided the firm meets certain conditions
Special Tax Rate of 5% on
Gross Income
Importation of Capital
Equipment, Spare Parts and
Supplies
Wharfage Dues and Export
Tax, Duty, Impost and Fees
PEZA
(Republic Act No. 7916, as
amended)
CDC / SBMA
(Republic Act No. 7227 – Bases
Conversion Devt Authority
 Exempted from all local and national
taxes - value-added taxes, franchise
taxes, excise and ad valorem taxes)
Special Tax Rate of 5% on Gross Income
0% duty-free
Tax and Duty-Free
Exempted
None
Simplication of Customs
Procedures
Available
Employment of Foreign
Nationals
 Foreign nationals may be employed in supervisory, technical or advisory positions within 5 years from a
project’s registration, extendible for limited periods. The positions of president, general manager, and
treasurer or their equivalents, of foreign-owned registered firms may be retained by foreign nationals for a
longer period.
 All foreign employees may bring with them their spouses and unmarried children under 21 years
of age.
Investment Opportunities
Investment Priorities Plan 2012
I. Preferred Activities
Regular List:
 Agriculture/ Agri-business and Fishery
 Creative Industries/Knowledge-Based
Services
 Shipbuilding
 Mass Housing
 Iron and Steel
 Energy
 Infrastructure
 Research and Development
 Green Projects
 Motor Vehicles
 Tourism
 Strategic Projects
 Hospital /Medical Services
 Disaster Prevention, Mitigation and Recovery
Projects
II. Export Activities
 Production and manufacture of export products
 Services exports
 Activities in support of exporters
III. Mandatory List
IV. ARMM List
Public-Private Partnership
Cornerstone Strategy of National Development
• Focus on
infrastructure
support
facilities for
tourism,
agriculture,
social services
and growth
centers
• Provide
incentives to
stimulate
private
resources
• Ensure
competition,
fairness and
transparency
• Fast-track
project
approval
process
• Provide
assistance in
preparation of
business case,
pre-feasibility
study, full
feasibility
study, detailed
engineering,
tender
document, etc.
• 2012 &
beyond: 73
projects
IT & BPM
Industry Snapshot
Contact Center
• Contact Centers in PH: 220+
• Revenues in 2011:US$7.4B
• Full time employees as of 2011: 416,000 • Revenue Growth Y-o-Y: 21%
Back-office and KPO: Best-kept secret
• No. of service providers: 100+
• Full time employees as of 2011: 128,650
• Revenue in 2011: US$2.05B
• Revenue growth Y-o-Y: 24%
Software Development
• No. of development companies: 135 (export only)
• Total professionals employed: 49,908
• Revenue in 2011: US$993M, 37% growth Y-o-Y
Animation & Game Development
• 20yr wealth of experience in the field of Animation
• Capabilities in 2D, 3D, Maya, 3DMax, Medical/Educ. Graphics & Animation
• Revenue in 2011: Animation at US$128M, Game Dev’t at US$8M
Engineering Design
•
• Over 75,000 licensed professionals • Revenue in 2011:US$172M
• 40,000 graduate of engineering courses annually (CAD-enabled)
Renewable Energy
one of the largest
producers (second to the
US) of geothermal energy
in the world
abundant water resources
that can be tapped for
power generation
the top wind power
producer in Southeast Asia
high amount of solar
radiation that can be
converted into useful
energy
a big ocean energy
resource due to the
country’s archipelagic
nature
abundant supply of
biomass
Agriculture/Agribusiness and Fishery
major producer of tropical
fruits such as banana,
pineapple and mango
market leader in canned
pineapple and juice
market
abundant supply of
mango fruit seed (mango
seed oil - ingredients for
cosmetics)
world’s eight largest fish
producer
leading producer and
exporter of seaweeds
Palm Oil (one of five
countries in Asia with
palm oil plantation)
Automotive Industry
Motor Vehicle Assembly:
• dominated by Japanese
manufacturers:
 Passenger Car (4)
 Commercial Vehicle (21)
 Motorcycle (30)
Motor Vehicle Parts and Components
Manufacturing.
• 256 companies and 49,000 employees
(wiring harness, gear box, steel belted
tires, body parts, batteries, anti-lock
break systems, steel wheels, filters)
Electronics
•Driver for export growth
• Home to seven of the world’s top 30
chipmakers and three of the largest HDD
producers
• Supplies the world with 2.5 million HDDs
per month
• Accounts for 10% of the SMS world
supply
THANK YOU!