Business and investment opportunities in the philippines

doing business in the leading emerging market of choice

PHILIPPINE CONSULATE GENERAL IN SAN FRANCISCO

PHIILIPPINES
A BUSINESS AND INVESTMENT environment INTRODUCTION

Quick Facts

REPUBLIC OF THE PHILIPPINES Capital: Manila Government Type: Republic (Democracy) Area: 300,000 sq.km. Population: 103.77 Million (July 2012 estimate) - country comparison to the world: 12 Nationality: Filipino Languages: Filipino (Tagalog) and English plus 8 major dialects Literacy: 94.6%

Quick Facts

Investments: 19.8% of GDP GDP: $395.4 Billion (2011 est., purchasing power parity), $225 Billion (nominal, 2012) GDP: PH economy grew 6.4% in Q1 2012, highest in ASEAN Inflation: 2.8% (June 2012) Labor force: 39.81 million (2011 est.)

Graduates per year: 450,000

GDP Composition: agriculture 14.9%, industry 29.9%, services 55.1%

Industries: electronics, assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing

Quick Facts

Industries: electronics, assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing Government: Executive, Legislative and Judicial Branches Administrative Divisions: 80 provinces and 120 chartered cities Economic Track Record - 2001-2009
Average

GDP for the period was 4.97%, highest since 1966

33

Quarters of Uninterrupted Growth

GDP

Grew from $76 billion in 2001 to $186 billion in 2008

Business Climate
Strongest Performing Stock Market in Asia in 2011

Business Climate
Stable & Resilient Economic Growth

Business Climate
Continuous Inflow of Remittances from Abroad 2011 OFW remittances crossed the US$20 Billion barrier with full year record of US$20.1 Billion Jan-Feb 2012: US$3.1 Billion, 5.60% higher relative to last years US$3 Billion

Business Climate
Service Exports:

2011 Service Exports hit an all-time high of US$11 Billion

Anchored on the BPO sector that directly employs 640,000 people

Merchandise Exports: Posted a total 7.8% growth in July, even with a marked decline in electronics exports.

Business Climate
Merchandise Exports: Posted a total 7.8% in July, even with a marked decline in electronics exports. 2010: 34% Merchandise exports growth at US$51.4 Billion 2011: Electronics exports decreased by 23.7%, but overall decrease was only 6.9% at US$47.8 Billion Q1 2012: Electronics exports was at US$6.75 Billion, an increase of 5.55% from previous years US$6.40 Billion
Q1 2012 also saw the growth of other top earners:
woodcraft & furniture (31.18%, US$506M); apparel & clothing accessories (1.08%, US$470M); ignition wiring sets (9.51%, $324M); metal components (12.02%, $232M);

15.3% surge in Gross International Reserves to US$76.13 Billion by March 2012 (US$10.15 billion higher than March 2011)

Business Climate
22% Increase in BOI Investment Approvals in 2011. (P369 Billion)

Business Climate
Robust domestic financial sector coupled with credit growth Outstanding loans of universal and commercial banks amounted to P2.79 Trillion by end of 2011, up by 19.3% from last year As of end February 2012, nonperforming loans ratio of universal and commercial banks improved to 2.34%, lower by 0.59 percentage points from past years 2.93% ratio

Business Climate
Improving Global Competitiveness Ranking

Business Climate: One of the Worlds Emerging Economies

Goldman Sachs: N-11 Economies (2005), 11 countries with the highest potential to be the the worlds largest economies Citigroups 3G Countries (February 2011), 9th out of 11 Fastest Growing Economies, the Global Generators of Growth. HSBC Global Research (Jan 2012), 16th Largest 50 Economies by 2050

Business Climate: International Investment & Credit Rating Upgrades

Moodys: Stable to Positive (May 2012), recent upgrade by one notch to Ba1.
Fitch Ratings: BB+/BBB one below investment grade/ investment (local currency default rating = investment grade) Standard and Poors: BB+ from BB, highest in 9 years. (July 2012)

Business Climate: Getting the Worlds Attention

UBS - SWISS FINANCIAL services firm UBS AG has hiked its 2012 growth forecast for the Philippines to 5.8% after the economy remained strong in the second quarter. (Sept. 3, 2012) CNBC: Philippines is Asias New Darling of Investors (August 30, 2012)

New York Times: The Philippines Newest Bright Spot in Asia (August 27, 2012)
Deutsche Bank: Philippines - Strongest Asian Economy (Bloomberg BusinessWeek (Aug. 9, 2012) Standard & Poors: Philippine Economy, a rare bright spot (June 4, SINGAPORE-based DBS Ltd. again upgraded its 2012 gross domestic product (GDP) forecast for the Philippines, but lowered the outlook for next years economic expansion. DBS Bank - SINGAPORE-based DBS Ltd. again upgraded its 2012 gross domestic product (GDP) forecast for the Philippines, but lowered the outlook for next years economic expansion. 2012 Wealth Report: The Philippines is the 6th fastest growing economy in the world

COMPETITIVE ADVANTAGES

World Class Human Resources

37.89 Million-strong labor force 94.6% Literacy rate 70% fluency in English 405,000 University/ College graduates per year (101,000 IT / Computer Science Graduates, 111,000 Business Graduates and 73,000 Medical & Allied/ Natural Sciences Graduates) English speaking The Philippines is the worlds third largest english speaking nation.

Exported and highly sought worldwide

PHILIPPINES: WINNER OFFSHORING DESTINATION OF THE YEAR 2010, 2009 AND 2007

Established Infrastructure and Telecommunications Networks

EXTENSIVE INFRASTRUCTURE EXPANSION & SUPPORT 9 International Airports 20 Domestic Airports 3 Railway lines in Metro Manila 12 Roll on/Roll off ports/ marine highways Newly constructed (major) expressways

established networks telecommunications systems and completely deregulated International connectivity and expanding multimedia Infrastructure high volume capacity for voice

Strategic Location
The Philippines borders Asia Mainland and the Pacific Ocean. Convenient Access to the 550 Million-strong ASEAN Market Reachable within 4 hours by plane from other key Asian Cities Regional Hubs in neighboring ports and countries such as Singapore, Hongkong and Tokyo provide numerous travel options.
Flying Times from key Asian cities: Tokyo - 4 hours Seoul - 3.5 hours Shanghai - 3.25 hours Singapore - 3 hours

Unmatched Government Incentives & Support

4 to 8 years Income Tax Holiday Special 5% tax rate on gross income after the lapse of the Income Tax Holiday for Economic and Special Zone locators Tax and duty exemption and Zero Duty on qualified imported capital equipment Exemption from 12% V.A.T on allowable local purchase of goods and services Unrestricted use of consigned equipment
Manufacturing 63

Employment of foreign nationals

IT Parks 127 Tourism 9 Medical Tourism Parks/ Centers 2 Agro Industrial Centers 6

Working Visas, Special Investors Resident Visas, Retirees Visas

Investment Opportunities

Priority Sectors: Investment Priorities Plan 2012

Agriculture/ Agri-business and Fishery Creative Industries/KnowledgeBased Services Shipbuilding Mass Housing Iron and Steel Energy/ Renewable Energy Infrastructure Research and Development Green Projects Motor Vehicles Tourism Investments Strategic Projects Hospital /Medical Services Disaster Prevention, Mitigation and Recovery Projects

Priority Sectors Identified by both countries

IT Enabled and Business Support Services Renewable Energy & Energy Generation Agri-Business Sustainable Mining Infrastructure Development Expertise (PPP) Pharmaceuticals Creative Services Aerospace & Defense Power Generation (Renewable Energy) Natural Resource Extraction Tourism Investments

IT Enabled & Business Support Services

IT-Enabled & Business Support Services: Diversification of the Industry

Energy & Renewables

Bio-Fuels (Bio-Diesel & Bio-Ethanol) - The government targets to implement a 1% CME blend with diesel fuel for vehicles in 2007, to reach 2% in 2009; and 5% ethanol blend with gasoline fuel for vehicles within 20072009, to reach 10% in 2011. Hydropower - Indicative Hydropower potentials are currently at 2,400 MW Geothermal - The Philippines is 2nd only to the US in terms of Geothermal Energy potential reserves. With only 1,931 MW installed out of 2,047 MW proven geothermal reserves and 4,790 MW potential reserves, there are obviously plenty of opportunities for expansion and private sector involvement. Wind Energy - Comprised of 7,107 Islands, the Philippines has maximum potential for wind energy generation. 16 wind power sites were offered to private investors during the 1st wind contracting round with a potential capacity of 345 MW. Solar Energy - Opportunities abound in Micro and Small-sized Solar Energy Plants from 1MW-5W. Compressed Natural Gas - Minimum investment requirements of about $4.0B between 2006 2014

*Feed-In Tariff Rates make Renewable Energy Generation now more attractive for investors

Resource Extraction & Sustainable Mining

Located in the Ring of Fire 5th most mineralized country in the world 2nd in Gold, 4th in Copper, 5th in Nickel, 6th in Chromite Established reserves of 13 known metallic and 29 nonmetallic minerals (Mines & Geosciences Bureau)

RP has 9 million hectares of mineralized land

Only 420,000 hectares with mining permits 8.6 million hectares still awaiting for the right investments

Public-Private Partnership
A Social Contract with the Filipino People All transactions are transparent & above board Consultative view on private sector areas of concern Protection of public interest Private Sector, an important role in nationbuilding Indispensable roleprivate sector as partner in development

Public-Private Partnership: Eligible Projects

Tourism Investments

*TIEZA LAW - PROVIDES INCENTIVES THAT FACILITATE INVESTMENTS

other key sectors

Electronics
Electronics make up 61% of Total Philippine Merchandise Exports Electronics exports was at US$6.75 Billion in 2011, an increase of 5.55% from previous years US$6.40 Billion Economy less dependent on Electronics Exports 2011: Electronics exports decreased by 23.7% due to Global Down-turn, but overall decrease in exports was only 6.9% at US$47.8 Billion.

Who are with us in Electronics

Profile of Electronics Firms

Ship-Building
Shipbuilding - Shipbuilding (design, construction, outfitting & launching any type of ship). Shipbuilding giants, Japanese Tsuneishi and Korean Hanjin are successfully operating in the Philippines. There is room for more. Ship repair conversion, overhaul, alteration, modification or repair of hull, machinery, equipment, outfits and components of any type of ship Shipyard operations Shipping - Domestic shipping - Overseas shipping Sea-faring/ Manning

CONTACT US!

www.investphilippines.org

PHILIPPINEBIZSF

FACEBOOK.COM/PTICSV

THE PHILIPPINE TRADE AND INVESTMENT CENTER IN SILICON VALLEY FOR THE US NORTHWEST AND WESTERN CANADA
THANK YOU! MARAMING SALAMAT!