UPDATE ON THE ECONOMY AND BUSINESS OPPORTUNITIES IN THE PHILIPPINES

Stable and Resilient Economic Growth

8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 GDP GDP (2013) GDP (2012) 7.2% 6.8% Headline Inflation (2013) 3.0% Headline Inflation (2012) 3.2% Source: National Statistical Coordination Board & National Statistics Office

Continuous Inflow of OFW Remittances

•

2013

: US$22.76 Billion (6.4% higher than 2012 record) •

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:

2012:

US$51.99 Billion

Service Exports:

2012:

US$20.4 Billion

2013:

US$54 Billion (3.6% higher than 2012)

2013:

US$21.8 Billion (anchored on BPM sector that generated revenues of US$15.5 Billion and direct employment of 900,000)

The Gross International Reserves reached US$83.1 Billion in 2013

4

Steady Investment Flows

TOTAL BOI & PEZA APPROVED INVESTMENTS (in PhP Billion) 10.4% US$ 15.17B

US$ 15.92B

US$ 5.05B

Total Investments

US$ 6.69B

US$ 17.48B

Foreign Investments

US$ 6.31B

2013 TOP SECTORS (% of Total Investments) 1. Electricity, Gas, Steam & Air Conditioning 2. Real Estate Activities 3. Manufacturing 4. Transportation & Storage 5. Accommodation & Food Service Activities 2013 TOP SOURCES (% of Total Foreign Investments) 1. British Virgin Islands 2. U.S.A. 3. Japan 4. Netherlands 5. Singapore

Improving Global Competitiveness Ranking

World Bank

Ease of Doing Business Report 2014 World Economic Forum (2013/2014)

Global Competitiveness Index

Economic Freedom of the World

(2013 Annual Report)

2014 Index of Economic Freedom

+30 +6 +5 +8 Out of 189 countries: From #138 to 108 Out of 148 countries: From #65 to 59 Out of 152 countries: From #61 to 56 Out of 177 countries: From #97 to 89 6

Fitch Ratings Standard & Poor’s Moody’s

Credit Ratings

INVESTMENT GRADE FROM TO

BB+ BBB Outlook: Stable BB Ba1 BBB Outlook: Stable Baa3 Outlook: Positive 7

Strengthened Governance and Anti-Corruption Measures

Transparency International (2013)

Corruption Perceptions Index +11 Out of 177 countries: From #105 to 94

World Bank (2012)

Government Effectiveness Indicator +1 Out of 215 countries: From #57 to 58 8

Investment Priorities Plan 2013 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 Strategic Projects Hospital /Medical Services Disaster Prevention, Mitigation and Recovery Projects

II. Export Activities

  

Manufacture of export products Services exports Activities in support of exporters

III. Mandatory List IV. ARMM List

9

The Philippine Advantage

10

The Philippine Advantage

Rich Talent Pool Attractive Investment Incentives Robust Infrastructure First-Class Lifestyle Strategic Business Location

11

Robust Infrastructure

Airports

• 9 international • 20 domestic

Railways

• 3 connecting railways, which span across the Metro • 12 roll-on/ roll off ports

Roads

• Subic-Clark Tarlac Expressway (SCTEX), •North Luzon Expressway (NLEX), •STAR Tollway and Cavite Expressway

Economic Zones

• 66 Manufacturing EcoZones • 197 IT Parks and Centers • 17 Agro-Industrial EcoZones • 18 Tourism EcoZones • 2 Medical Tourism Zones 12

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.

13

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 hospitals, etc. – value-for money housing, modern recreational facilities, first-rate educational institutions adopting international standards, business centers, A growing favorite tourist destination, as evidenced by the steadily increasing tourist arrivals.

14

The Philippine Advantage

Attractive Investment Incentives: INCENTIVE BOI (Executive Order No. 226, as amended) Income Tax Holiday (ITH) PEZA (Republic Act No. 7916, as amended)

4 – 6 years (max of 8 years)

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)

ITH Bonus

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 Simplication of Customs Procedures Employment of Foreign Nationals

0% duty-free Exempted Special Tax Rate of 5% on Gross Income Available Tax and Duty-Free None   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.

15

Rich Talent Pool

Our Professionals are : • Highly Educated and 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 530,000 college graduates per year across a wide range of disciplines.

Number of college degree graduates per year 2013 Projection

158,159 Medical and natural sciences, allied fields Business, accounting, and related fields Social and behavioral sciences, education Engineering and architecture IT-related and mathematics Fine arts, masscom, humanities Others

TOTAL Tertiary level

119,526 67,474 57,799 57,921 13,549 58,845

533,273

For further information, please contact:

Emmanuel Ang

Commercial Consul for Australia and New Zealand

Philippine Trade and Investment Center (PTIC) in Sydney

Philippine Department of Trade and Industry Suite 302, Level 3, 301 George St., Sydney, NSW 2000 Australia Phone No.: +61.2.9299 0002 Fax No.: +61.2.92990007 Email: [email protected]

; [email protected]

Website: http://investphilippines.gov.ph/category/sydney