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Phili!ine
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ABUSINESSANDINVESTMENTENVIRONMENTINTRODUCTIONPhili!ine
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TextText
(1) Strong Stock Market
Business Climate
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(2) Stable and Resilient Economic Growth
Business Climate
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Business Climate(4) Steady Investment Flows
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Business Climate
(5) Robust Domestic Financial Sector Coupled with
Credit Growth
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Business Climate
(6) Efficient Revenue Collection
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Business Climate
(7) Improving Global Competitiveness Ranking
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Business Climate
(8) Strengthened Governance & Anti-Corruption Measures
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Business Climate(9) Dynamic People
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GETTING THE WORLDS
ATTENTION
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Recent Developments: RATINGS UPGRADE
Fitch Ratings upgrades to BBB- (Investment Grade)!Standard & Poor upgrades to BBB- (Investment Grade)!Japan Credit Rating Agency Ltd. upgrades to BBB-
(Investment Grade)!
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Recent Developments:
GROWTH FORECAST UPGRADE
International Monetary Fund upgrades PH growth forecast!Barclays upgrades PH growth forecast from 5.9 to 6.3% (May, 2013)!UBS Investment Bank upgrades growth forecast to 6.3% (April, 2013)!UN Economic and Social Commission for Asia and the Pacific
upgrades growth forecast from 5 to 6.2% !First Metro Investment Group forecasts 7.5% economic growth from
the Philippines!According to National Economic and Development Authority (NEDA),
Philippine economy outpaced growth of other Southeast Asian countries.!
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Recent Developments:IMPROVED INVESTOR CONFIDENCE
Philippines is Asias rising tiger according to World Bank!Philippines from International Monetary Fund borrower to lender!Philippine Governments initiatives to encourage investors (May, 2013)!
! -Securities and Exchange Commission lifts 40% cap on foreignownership!
-Reduced debt from 68% of GDP in 2003 to 41% in 2012!Goldman Sachs identifies Philippines as successor to BRICS
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64.1% labor force participation rate(2013) with 92% employment rate
95.4% Literacy rate --one of thehighest literacy rates in the world(ADB, 2008)
70% fluency in English
500,000 college graduates per year
(100,000 IT / ComputerScience Graduates, 111,000Business Graduates and73,000 Medical & Allied/Natural Sciences Graduates)
Fluent in English The Philippines isthe worlds third largest englishspeaking nation.
Exported and highly sought worldwide PHILIPPINES: WINNEROFFSHORING DESTINATIONOF THE YEAR 2010, 2009 AND
2007
WorldClassHumanResource
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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 TELECOMMUNICATIONS SYSTEMS ANDNETWORKS
completely deregulated
International connectivity and expanding multimedia Infrastructure
high volume capacity for voice
EstablishedInfrastructure&TelecommunicationsNetworks
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StrategicLocation The Philippines borders Asia Mainland and the PacificOcean.
Convenient Access to the 550 Million-strong ASEANMarket
Reachable within 4 hours by plane from other keyAsian Cities
Regional Hubs in neighbouring ports and countriessuch as Singapore, Hongkong and Tokyo providenumerous travel options.
Flying Times from key Asian cities:______________________________
Tokyo - 4 hours
Seoul - 3.5 hours
Shanghai - 3.25 hours
Singapore - 3 hours
Hongkong - 2 hours
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UnmatchedGovernmentIncentives&Support
4 to 6 years Income Tax Holiday
Special 5% tax rate on gross income afterthe lapse of the Income Tax Holiday forEconomic and Special Zone locators
Tax and duty exemption and Zero Duty onqualified imported capital equipment
Exemption from 12% V.A.T on allowablelocal purchase of goods and services
Unrestricted use of consigned equipment
Employment of foreign nationals
Working Visas, Special Investors ResidentVisas, Retirees Visas
Manufacturing 63
IT Parks 127
Tourism 9
Medical Tourism Parks/ Centers 2
Agro Industrial Centers 6
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Invetment O!o#unitie
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PrioritySectors:InvestmentPrioritiesPlan2012 Agriculture/ Agri-
business and Fishery
Creative Industries/Knowledge-BasedServices
Shipbuilding
Mass Housing
Iron and Steel
Energy/ RenewableEnergy
Infrastructure
Research and Development
Green Projects
Motor Vehicles
Tourism Investments
Strategic Projects
Hospital /Medical Services
Disaster Prevention,Mitigation and RecoveryProjects
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ITEnabled&BusinessSupportServices
7
Leading the Outsourcing Evolution
Established leader for voice services 30% share of U.S. and 15-20% of APAC
$5.70 billion revenues in 2010, higher thanIndias projected $5.58 billion
VOICE
Credible 10% share that is rapidly growing
Large industry-specific opportunity (e.g.
BFSI, healthcare, media, HR, KPO Evolving value-propositions - tools, processimprovement, end-to-end accountability
Non-voice
Highly penetrated applications market
Emerging opportunities to penetrateASEAN, innovate for the U.S.
Third largest pool of engineers after Indiaand China in APAC
IT/ESO
Source: Everest analysis
Philippine IT-BPO industry size20062009; US$ billion
3.2
4.8
6.1
7.1
8.9
11.0
2006 2007 2008 2009 2010 2011
# FTEs(~000)
240 300 370 440 530
Globalshare1
5% 6% 6% 7% 8%
FTEs = full-time employees, YoY = year on year
1 Philippines IT-BPO market as percentage of global offshore
services market, in revenue terms
Sources: BPAP; Everest analysis
~50% ~26% ~16% ~25%
Courtesy of the Business Processing Association of the Philippines
~24%
638
8%
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IT-Enabled&BusinessSupportServicesDiversification of the Industry
10Proprietary & Confidential. 2010. Everest Global and Outsource2Philippines.
Philippine IT-BPO service segmentsUS$ billion
Philippine IT-BPO source marketsUS$ billion
Note: 2006 Split per ICT Survey of IT and ITES; 2010 estimates from Everest-O2P surveySources: BPAP; Everest-O2P survey
Voice BPO
Non VoiceBPO
IT/ESO
3.2 8.9100% =
U.S.
UK/EU
APAC
3.2 8.9100% =
Domestic
& bl
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Energy&Renewables
Bio-Fuels (Bio-Diesel & Bio-Ethanol) - The governmenttargets to implement a 1% CME blend with diesel fuel for vehicles in
2007, to reach 2% in 2009; and 5% ethanol blend with gasoline fuelfor vehicles within 2007-2009, to reach 10% in 2011.
Hydropower - Indicative Hydropower potentials are currently at2,400 MW
Geothermal - The Philippines is 2nd only to the US in terms ofGeothermal Energy potential reserves. With only 1,931 MW installed
out of 2,047 MW proven geothermal reserves and 4,790 MWpotential reserves, there are obviously plenty of opportunities forexpansion and private sector involvement.
Wind Energy - Comprised of 7,107 Islands, the Philippines hasmaximum potential for wind energy generation. 16 wind power siteswere offered to private investors during the 1st wind contractinground with a potential capacity of 345 MW.
Solar Energy - Opportunities abound in Micro and Small-sizedSolar Energy Plants from 1MW-5W.
Compressed Natural Gas - Minimum investment requirementsof about $4.0B between 2006 2014
*Feed-In Tariff Rates make Renewable Energy Generation now more attractive for
investors
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ResourceExtraction&SustainableMining
Located in the Ring of Fire
5th most mineralized country in theworld (2nd in Gold, 4th in Copper, 5thin Nickel, 6th in Chromite)
Established reserves of 13 knownmetallic and 29 non- metallic minerals(Mines & Geosciences Bureau)
RP has 9 million hectares ofmineralized land
Only 420,000 hectares have miningpermits. 8.6 million hectares still
awaiting for the right investments.
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Public-PrivatePartnershipA Social Contract with the
Filipino People
All transactions are transparent& above board
Consultative view on privatesector areas of concern
Protection of public interest
Private Sector, an importantrole in nation-building
Indispensable roleprivatesector as partner indevelopment
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Public-Private Partnership: EligibleProjects
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TourismInvestments
*Tieza Law - provides incentives that facilitate investments
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Electronics
Agro-Based
49%Garments - 7%
Other
ManufacturedProducts 10%
Forest Products - 10%
Others - 2%
Garments and Textiles - 6%
Machinery and Transport - 4.4%
Wearables - 0.16%
Food - 2.9%
Motor Vehicles and Parts - 1.74%
Home Furnishings - 1%
Marine Products - 1%
Giftwares - 0.45%
Construction Materials - 0.49%
Organic Products - 0.18%
Mineral Products - 2.1%
Others - 13%
FROM COCONUTCOCONUT CHIPSCHIPS
TO MICROCHIPS
Mineral Products -18%
ELECTRONICSELECTRONICS -- 3%3%
19701970
ELECTRONICSELECTRONICS --
61%61%
20102010
Electronics make up 61% of Total Philippine Merchandise Exports
Electronics exports was at US$6.75 Billion in 2011, an increase of5.55% 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$47.8Billion.
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FOUR OF THE LARGEST HDD PRODUCERS ARE IN THE
PHILIPPINES
Hitachi Toshiba Fujitsu NEC
CEBU MITSUMI employs >20K, biggest employerin the Philippines; manufactures computer
peripherals and components such as CD-R,CD-RW, optical pick up
7 OUT OF THE WORLDS TOP 20 CHIPMAKERS ARE
OPERATING IN THE PHILIPPINES
TIPI Philips Fairchild
Analog Sanyo On Semi Rohm
WHO ARE WITH US
IN ELECTRONICS?
P fil f El t i Fi
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ProfileofElectronicsFirmsNUMBER OF FIRMS: 936
NATIONALITY:
- 72% Foreign-
Others8%
Japan
30%
Philippines
28%
Malaysia
2%Singapore
2%
Taiwan
4%
Europe
7%
USA
9%
Korea
10%
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Ship-Building
Shipbuilding-Shipbuilding(design,construction,outfitting&launchinganytypeofship).Shipbuildinggiants,JapaneseTsuneishiandKoreanHanjinaresuccessfullyoperatinginthePhilippines.Thereisroomformore.
Shiprepairconversion,overhaul,alteration,modificationorrepairofhull,machinery,equipment,outfitsandcomponentsofanytypeofship
Shipyardoperations
Shipping-Domesticshipping-Overseasshipping
Sea-faring/Manning
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www.investphilippines.org
PhilippineBizSF facebook.com/pticsv
CONTACT US
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%ank y&!MaramingSalamat