An attractive investment destination... WHY?

Skilled People, Strategic Location, Vibrant Economy and a Democratic Government

The Philippines: At a Glance

The Philippines: At a Glance

• Archipelago of 7,107 Islands: 102 Million – 12th most populous

• Capital: Manila – 11 Million

• Languages: Filipino & English – 4th largest English speaking country

• Religions: Catholic, Muslim, Iglesia ni Cristo, Evangelical, Christian, Buddhist & Protestant

• Currency: Philippine Peso - $1.00/PhP43.8130 (January 16, 2012)

• Literacy Rate: 92.3%

• Central Luzon/Clark – Subic – 7 Million with 10,000 graduates per year.

• Labor Force: Participation Rate 63.6% -- World’s 15th largest

• 8.5 million Filipinos working abroad

• $17 Billion per year OFW Remittances

• GDP: 3.2% - 3rd Quarter 2011 est. (3.4% 2nd Quarter 2011) (7.6% Year 2010) ( 1.1% Year 2009)

• Inflation: 4.2% (December 2011 est.)

• Exports: US$ 3,342.30 (in million dollars, November 2011 est.)

• Imports: US$5,019.39 (in million dollars, October 2011 est.)

• Country of Exports: (November 2011 est.)

• JAPAN 21.6%

• USA 15.0%

• CHINA 13.7%

• HONG KONG 7.1%

• KOREA 5.6%

• SINGAPORE 5.5%

• TAIWAN 3.9%

• GERMANY 3.6%

• THAILAND 3.1%

• NETHERLANDS 2.5%

• Country of Imports: (October 2011 est.)

• JAPAN 12.1%

• USA 9.8%

• CHINA 9.5%

• SINGAPORE 8.1%

• KOREA 8.0%

• SAUDI ARABIA 6.7%

• TAIWAN 6.5%

• THAILAND 5.7%

• MALAYSIA 5.4%

• INDONESIA 4.6%

SOURCE:  CIA WORLD FACTBOOK, NSO, NSCB, BSP, BLES

BOTTOM LINE: The Philippines sits at the crossroads of the Pacific, possesses an abundant supply of inexpensive, well trained, English speaking workers, low operating costs and poised on the door step of China, soon to be the world’s largest economy - - providing unmatched markets and opportunities.

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STRATEGIC LOCATION

The Philippines is surrounded in the north by Japan, Hong Kong, Taiwan, China and South Korea; in the south by Singapore, Malaysia and Indonesia; in the west by Thailand. To the east is the vast expanse of the Pacific Ocean, which earned for the country the title, “Gateway of the West to Asia”

Destination  Taiwan Hong Kong Tokyo Singapore Seoul Jakarta Shanghai Thailand

Flying Time (hrs)1:33 1:33 1:34 3:50 3:00 3:05 4:25 2:20 3:05

Destination  Paris New York Sydney London Frankfurt

Flying Time (hrs)1:33 16:40 17:30 07:40 14:00 13:00

 

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Foreign Investment Incentives

BOI (Board of Investments) - Incentives

Any enterprise registered with the Board of Investments pursuant to the 1987 Omnibus Investments Code (EO-226) is entitled to, among others, the following incentives ***subject to certain terms and conditions:

Fiscal incentives

Income tax holiday (ITH) for six years for pioneer firms and generally four years for non-pioneer firms. If a non-pioneer firm is located in a less developed area, it shall generally be entitled to 6 years ITH. Firms locating with Metro Manila shall not be granted ITH unless

Located within a government industrial estate;

Exporters with expansion projects;

Power generating plants;

Service type projects with no manufacturing facilities

Tax credit on raw materials, supplies and semi-manufactured products

Additional deduction from taxable income for labour expense cannot be simultaneously enjoyed with the ITH incentive)

Duty-free importation of capital equipment, spare parts and supplies for both export and domestic-oriented enterprises until June 6, 2009 or June 6, 2011, depending on the type of equipment.

Additional deduction from taxable income for necessary and major infrastructure works (cannot be simultaneously enjoyed with the ITH incentive)

Non-fiscal Incentives

Employment of foreign nationals

Guaranteed repatriation of foreign investments and earnings

Importation of consigned equipment for an unlimited period subject to posting of re-export bond

PEZA (Philippine Economic Zone Authority) - Incentives

Special Economic Zone Act 1995, as amended, mandates the PEZA to operate, administer, manage and develop Special Economic Zones. PEZA is an investment promotion agency and a government owned corporation, attached to the Department of Trade & Industry.

PEZA grants fiscal and non-fiscal incentives to developers of economic zones, export producers, and I.T. service exporters.

PEZA offers ready-to-occupy locations to foreign investors who are export producers or IT service exporters in world class and environment friendly Economic Zones and I.T. Parks / Buildings

Business enterprises operating within economic zones shall be entitled to the incentives granted to BOI-registered enterprises under the Presidential Decree No. 66 or EO-226 (ITH incentive). PEZA-registered exporters enjoy tax and duty exemption on importations of capital equipment, raw materials and other merchandise directly needed in their registered operations. After availment of the ITH incentive, business enterprises within the economic zone whose PD66 or EO-226 incentive have lapsed, shall be subject to a final tax at a preferential rate of 5% of their gross income earned, in lieu of all other taxes, local and national. Information Technology companies are entitled to similar incentives if there are registered locators in the IT ecozones.

Other incentives

Cagayan Special Economic Zone, Zamboanga City Special Economic Zone and the Aurora Special Economic Zone are three other special ecozones with incentives similar to the incentives granted to the PEZA ecozone registered enterprises.

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High Quality Workforce

About 43% of the Filipino population is of working age of which 89% are employed. Approximately 500,000 persons enter the labor force every year. Filipino labor is highly trainable and is preferred for its English speaking ability. A natural attribute of Filipinos is their artistic and creative talent, which is why they have been so successful in design and related enterprises.

Most Filipinos are bi-lingual, speaking English and Filipino. A small percentage of the population speaks Chinese or Spanish.
Pay Scale Information SOURCE- www.payscale.com  :

 

 

Regional Offices

NCR - National Capital Region

CAR - Cordillera Administrative Region

Region I - Ilocos Region

Region II - Cagayan Valley

Region III - Central Luzon

Region IVA - CALABARZON

Region IVB - MIMAROPA

Region V - Bicol Region

Region VI - Western Visayas

Region VII - Central Visayas

Region VIII - Eastern Visayas

Region IX - Zamboanga Peninsula

Region X - Northern Mindanao

Region XI - Davao Region

Region XII - SOCCSKSARGEN

Region XIII - Caraga

ARMM - Autonomous Region in Muslim Mindanao

 

SOURCE -
Philippines National Wages & Productivity Commission: http://www.nwpc.dole.gov.ph

 

Median Hourly Rate by City

 

Median Hourly Rate by Job

 

Median Hourly Rate by Years Experience

 

Median Hourly Rate by Employer type

 

Median Hourly Rate by Company Size

 

Median Hourly Rate by Industry

 

Median Hourly Rate by IT Skills

 

Median Hourly Rate by IT Certification

 

Pay Scale Information SOURCE- www.payscale.com

 

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The Economic Environment

Market Structure: The Philippines adheres to the principle of free enterprise and recognizes the role of the private sector in the economic development of the country.
Relaxation of investment rules, privatization of government owned corporations are some of the initiated reforms.
The Philippines membership in the WTO – World Trade Organization and active participation in the AFTA-ASEAN Free Trade Agreement and the GATT-General Agreement on Tariff and Trade are definite indicators of the government’s commitment to open trade.
Major economic indicators: 2007 GDP up by 7.2% and GNP up by 7.8% due to record high salary remittances from OFW’s – Overseas Filipino workers.

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Why Business in the Philippines?

People Power

The Filipino workforce is one of the most compelling advantages the Philippines have over any other Asian country. With higher education priority, the literacy rate in the country is 94.6% - among the highest. English is taught in all schools, making the Philippines the world’s third largest English-speaking country. Every year, there are some 350,000 graduates enriching the professional pool.

Strategic Business Location

The Philippines is located right in the heart of Asia – today the fastest growing region. It is located within four hours flying time from major capitals of the region. Sited at the crossroads of the eastern and western business, it is a critical entry point to over 500 million people in the ASEAN market and a gateway of international shipping and airlines suited for European and American businesses.

First-class lifestyle

Discover the best of sun, sea, sand and style in the tropical setting teeming with the best of western amenities. The Philippines is 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. Expats enjoy accessible and affordable luxuries – business centers, housing, schools, hospitals, shopping malls, hotels and restaurants, beach resorts, and recreation centers.

Abundant resources

An archipelago like the Philippines offers diverse natural resources, from land to marine to mineral resources. It is also the biggest copper producer in Southeast Asia and among the top ten producer of gold in the world. It is also home to 2,145 fish species, four times more than those found in the Bahamas. The 7,100 islands boast of beautiful beaches and breathtaking sceneries that offer soothing leisure and relaxation spots for vacationers and tourists.

Low cost of doing business

Wages are typically less than a fifth of that in the U.S. Local communication, electricity and housing costs are also 50% lower compared to the U.S. rates. Foreign companies that are now outsourcing programming and business processes to the Philippines estimate 30 to 40% business cost savings, 15 to 30% call center services and application systems and 35 to 50% software development.

Liberalized and Business-Friendly Economy

An open economy allows 100% foreign ownership in almost all sectors and supports a Build-Operate-Transfer (BOT) investment scheme that other Asian countries emulate. Government corporations are being privatized and the banking, insurance, shipping telecommunications and power industries have been deregulated. Incentive packages include the corporate income tax, reduced to a current 32%, with companies in the Special Economic Zones are subject to only 5% overall tax rates. Multinationals looking for regional headquarters are entitled to incentives such as tax exemptions and tax and duty-free importation of specific equipment and materials.

Unlimited business opportunities

As Asian economies integrate within the vast framework of the ASEAN Free Trade Agreement (AFTA), the Philippines is the natural and most strategic location for firms that want access to the large ASEAN market and its vast trade opportunities. The Philippines has enhanced and primed up various areas for investors and offers a dynamic consumer market accustomed to an array of product choices created by a competitive domestic economy.

Developing Infrastructure for Global Growth

A well-developed communication, transportation, business and economic infrastructure links the three major islands and distinguishes the Philippine economy. Highly accessible by air, water and cyberspace, liberalization of inter-island shipping and domestic aviation further sparked improved facilities and services. The container terminals are suited to handle cargo traffic at the highest levels of efficiency.
Communication provides redundant international connectivity 24/7 with fiber optic cable as primary backbone network and satellite as backup. Economic reforms emphasize regional growth, converting remote areas into business centers. The landmark BOT legislation allows private investors to build and operate infrastructure, then turn it over to the Philippine government after a set period of time.

All you need and more

The Philippines offer state-of-the-art telecommunications facilities, adequate and uninterrupted power supply. There are ready-to-occupy offices and production facilities, computer security and building monitoring systems, as well as complete office services in specialized IT zones. With the government's focus on building up an IT-enabled economy, the Philippines is on its way to becoming the E-services Hub of Asia.

SOURCE: http://www.boi.gov.ph/

 

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Philippine Infrastructure

The Philippines has a well-developed communication, transportation, business and economic infrastructure that make it an ideal center for operations for global business. It is highly accessible to the world by air, water and cyberspace.
Its location in the region is truly central. It is the only country that is less than four hours away from the major capitals of the region. This has made it the address of choice for the Asia-Pacific hubs of both UPS and FedEx, the two biggest names in air express delivery.

An Invigorated Aviation Industry

Most major airlines have daily or multi-weekly flights in and out of Manila to Asian capitals, and to key cities in the United States, Europe, and the Middle East. The country has 8 international airports, and over 200 airports that connect destinations across the islands.
Recent developments in the inter-island shipping and domestic aviation industries have witnessed the entry of more players. This creates a competitive marketplace, which spark the improvement of facilities and services.

Fast-Tracking Port Development

Fair competition, as well as transparency, bolsters the efforts to privatize and modernize Philippine ports. This augurs well for an archipelago with a coastline measuring over 36,289 kilometers (longer than that of the United States), and with many natural harbors. In key economic areas, some of these harbors have already been developed into modern ports and container terminals that play host to national and international trade. The ports dock both passenger and cargo ships. Passenger traffic is steady between the country’s major island groups.
The country’s container terminals are well equipped to handle cargo traffic at the highest levels of efficiency. The Manila International Container Terminal is constantly cited as one of Asia’s top five in terms of efficiency.
The Philippines’ accessibility by air and sea makes it a prime location for export-oriented businesses, which are highly dependent on effective and on-time import and export schedules.

Building for Limitless Growth

The three main islands of Luzon, Visayas and Mindanao, are made accessible by a network of roads, waterways, and airports. Once remote areas are now centers for business, industry and residential development. Progress in these areas has been bolstered by infrastructure support for transportation (roads, airport, seaports, and terminals), power, water (dams, water supply) community (public markets, commercial centers) and tourism-related structures.
The building of critical infrastructure has been made possible by economic reforms emphasizing regional growth; and by the landmark Build-Operate-Transfer or BOT legislation that allows private investors to build and operate infrastructure, then turn it over to the Philippine government after a set period of time.

Connected to the World 24-7

The world today communicates with impressive speed and in a variety of ways, with real-time, precision connectivity. Despite more modest communication infrastructure capabilities, the Philippines nevertheless assure investors of efficiently communicating their business message to the rest of the world, through world-class transmission facilities.
The country’s communication infrastructure is well-developed and expanding, a high quality, low cost bandwidth domestic network, with six available platforms: fixed line, cellular, cable TV, over the air TV and radio, and the VSAT system. Year 2003 figures approximate usage at 4.0 million telephone main lines and 18.0 million mobile cellular phones. The Philippines has earned the informal title of “Wireless Champion” because its cellular phone users outpace the rest of the world in accessing the Short Messaging System (SMS) service, or simply, “texting,” where plain text data is sent from cellular phone to cellular phone.
This is made possible with fibre optic cable as primary backbone network with satellite as backup. Nine international carriers, six cellular operators, and five nationwide and seventy long distance and local carriers make up a highly competitive telecom sector.
International connectivity has spurred flourishing Internet usage. First quarter of 2004 figures cite 4 million Internet users. The ease by which Filipinos speak and comprehend English has made them avid consumers of Internet technology and mass media. With a constantly developing communication infrastructure, they are updated and well versed on world events, market trends and international business.

SOURCE: http://www.boi.gov.ph/

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