Transcript The Republic of the Philippines

Undersecretary Ponciano C. Manalo, Jr.
Department of Trade and Industry – Industry Promotion Group
0
PHILIPPINES
Rising Star of Asia
1
“The Philippines is no longer the sick man of East Asia, but
the rising tiger. There is macroeconomic stability, and the
fiscal situation of the government is sound and improving. ”
- Mr. Motoo Konishi, World Bank (Philippines)
“The growth in the (Asean) region will be led by the
Philippines… in the next five years.”
- 2015 OECD Economic Outlook for Southeast Asia, China & India
2
ASEAN Growth Performance
GDP Growth Rate
(in percent)
2013
2014
Vietnam
5.3
6.0
Indonesia
5.6
5.0
Thailand
2.8
0.9
Philippines
7.1
6.1
3
“The growth forecast for 2015 and
2016 have been raised to 6.6% and
6.4%, respectively, reflecting the
boost from lower global oil prices and
anticipated pick up in government
spending from the low base in 2014 ”
- Mr. Shanaka Jayanath Peris, International Monetary Fund
4
“Factors that powered private
consumption in 2014 – growth in
employment, modest inflation and
higher inflows of remittances – are
expected to support solid growth this
year.”
- Mr. Richard Bolt, Asian Development Bank
5
Sustained Economic Growth
6
Sustained Economic Growth
GDP (2014)
6.1%
GDP (4Q 2014)
6.9%
GDP (1Q 2015)
5.2%
Headline Inflation (2014)
4.1%
Headline Inflation (Jan-May 2015):
2.2%
7
Sustained Economic Growth
Contributor to 2014 GDP Growth
PH GDP Growth
2010
7.7%
Supply
Agri, Fishery and Forestry
1.9%
Industry
7.5%
Manufacturing
8.1%
2011
3.7%
2012
6.8%
Demand
2013
7.2%
Household Final Consumption
Expenditure
5.4%
2014 (FY)
6.1%
Government Final
Consumption Expenditure
1.8%
2014 (4Q)
6.6%
Capital Formation
1.1%
Services
Fixed Capital Formation
6.0%
8.6%
8
First Quarter 2015 Economic Growth
9
High Consumption Growth
10
“…Information Handling Services (IHS) said PH
economic growth would even surpass China’s, and it
will be the third fastest-growing economy in the
world…
…IHS Asia Pacific Economist Rajiv Biswas noted that
the PH has the capacity for robust long-term
economic growth supported by its strong information
technology-business-process outsourcing industry
and remittances from Filipino workers abroad.”
- Business Mirror (May 2015)
11
Continuous Inflow of OFW Remittances
2014: US$24.3 Billion
(+6.0% increase vs. year ago)
Jan-Apr 2015: US$7.8 Billion
(+5.4% YOY increase )
As of Oct. 2014, the Philippines is the 3rd biggest recipient
of cash remittances from abroad.
(World Bank’s Migration & Development)
12
Increased BPO / KPO Employment
2004: 1,000 FTEs
2014: 1,000,000 FTEs
Median Age: 23 Years Old
14
Increased BPO / KPO Employment
BPO/KPO Sectoral Value
Revenue
Employment
% of GDP
2013
2014
USD 16.1B USD 18.9B
917,000
1.07M
6%
6.2%
Source: Information Technology and Business Process Association of the Philippines
15
Renewed Global Demand for
Products Made in the Philippines
17
Steady Export Growth
Merchandise Exports
Service Exports
2014: US$61.8 Billion
2014: US$24.8 Billion
(9% higher than 2013)
(6.4 % higher than 2013)
19
Philippines is now a Preferred
Investment Destination
20
Favorable Investment Climate
A. Total Approved
Investments
2011
2012
2013
2014
657.3
672.3
+10.4%
742.2
634.2
+29.8%
(in PhP Billion)
• Energy
• Non-energy
B. Number of
Approved Projects
C. Employment
+2.3%
+2.3%
+10.4%
(14.5%)
-14.5%
161
344.7
179
+58.3%
+144.1%
(48.1%)
555.6
511.3
397.5
455.3
(7.8%)
(22.3%)
+14.5%
967
948
955
904
(2%)
+0.7%
(5.3%)
134,489
148,014
181,286
(24.1%)
+10.1%
+22.5%
+69.1%
101.7
177,203
21
Favorable Investment Climate
Year
Net FDI
(USD billion)
2010
2011
2012+69.1%
2013
2014
1.1
2.0
3.2
3.7
+10.4%
+29.8%
+2.3%
-14.6%
6.2
(+65.9%)
22
Most Popular Expansion Destination
INDONESIA
MYANMAR
THAILAND
SIGNAPORE
VIETNAM
PHILIPPINES
15%
19%
49%
3%
11% 6%
* Source: Survey Conducted by the US Chambers of Commerce in ASEAN, Manila Bulletin, September 4, 2012
23
Philippines is Gaining Global
Competitiveness
24
Ease of Doing Business in the Philippines
World Bank
Ease of Doing Business
Report 2015
World Economic Forum
(2014/2015)
Global Competitiveness Index
Economic Freedom of the
World
(2014 Annual Report)
2015 Index of Economic
Freedom
+13
Out of 189 countries:
From #108 to 95
+7
Out of 144 countries:
From #59 to 52
+5
Out of 152 countries:
From #56 to 51
+13
Out of 178 countries:
From #89 to 76
25
Appreciation of Investment Environment
Philippines
Indonesia
Thailand
Vietnam
India
Less Linguistic / Communication
Problems
69.2
6.8
9.7
7.0
30.6
Easy to hire local staff (General
Worker/Staff/Clerk)
58.0
21.0
14.3
33.3
15.3
High Quality of Employees (General
Worker)
19.6
3.8
6.7
13.2
3.8
Easy to hire local staff
(Specialist/Engineer/Middle-Manager)
17.5
0.8
4.2
6.7
7.5
High Quality of Employees
(Specialist/Engineer)
15.4
1.9
5.1
7.7
7.8
High Employee Retention Rates
14.7
8.7
6.4
11.5
1.9
Tax Incentives (Corp Tax Holidays, etc.)
34.3
4.2
15.9
18.9
5.0
Source : 2013 JETRO Study
26
Appreciation of Investment Environment
27
“The ratings on the Philippines reflect
our assessment of its strong external
position, which features rising foreign
exchange reserves and a low external
debt burden…”
- Standard and Poor’s (May 2015)
28
Credit Ratings Confirm Trust in Economy
BBB-
BB+
Outlook:
Stable
Baa2
Baa3
BBB-
Outlook:
Stable
BBB
Outlook:
Stable
29
Credit Ratings Confirm Trust in Economy
BBB-
BB+
Outlook:
Positive
“The outlook is positive. It reflects the improved growth potential backed by
institutional reforms and greater investment in infrastructure.”
BBB+
BBB
Outlook:
Stable
National Information and Credit Evaluation (NICE) Ratings Inc., Sept. 2014
Japan Credit Rating Agency Ltd., July 2015
30
Strengthened Governance and
Anti-Corruption Measures
Transparency
International (2014)
Corruption Perceptions
Index
World Bank (2014)
Control of Corruption
+9
Out of 175
countries:
From #94 to 85
+22
From 22% in 2010
to 44% in 2013
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31
The Philippine
Advantage
32
The Philippine Advantage
Rich Talent Pool
Competitive
Investment
Incentives
First-Class
Lifestyle
Infrastructure
Development
Critical Market
Access
33
Critical Market Access
- Critical entry point
to over 600 million
people in the ASEAN
Market.
- Natural gateway to
the East-Asian
economies.
34
Trade and Investment
Opportunities
35
Philippines (PH) – Mexico (MX)
Bilateral Merchandise Trade
Key Exports to MX
1.
450
411.6
400
2.
3.
350
300
250
225.2
249.4
4.
5.
200
150
100
72.1
99.7
75.1 93.6
Key Imports from MX
1.
20.4
50
0
2012
2013
*in USD Millions
2014
Q1 2015
Export
Import
Ignition wiring sets and other wiring
sets of a kind used in vehicles, aircraft
or ships
Digital monolithic integrated circuits
Other parts & accessories, not
elsewhere specified, of motor vehicles
Printed circuits
Gear boxes
2.
3.
Parts of electrical apparatus for line
telephony or telegraphy, including line
telephone sets with cordless handsets
and telecommunication apparatus for
carrier-current line systems
Parts of electronic integrated circuits
and microassemblies
Parts of accessories of the machines
heading No. 84.71
36
Investment Priorities Plan 2014-2016
I. Preferred Activities
1.
2.
3.
4.
5.
6.
7.
8.
MANUFACTURING
o Motor Vehicles
o Shipbuilding including parts &
components
o Aerospace parts & components
o Chemicals (oleo, petro & chlor-alkali)
o Virgin paper pulp
o Copper wires & copper wire rods
o Basic iron & steel products
o Tool and Die
AGRIBUSINESS AND FISHERY
SERVICES
ECONOMIC & LOW COST HOUSING
HOSPITALS
ENERGY
PUBLIC INFRASTRUCTURE & LOGISTICS
PPP PROJECTS
II. Export Activities
 Manufacture of export products
 Services exports
 Activities in support of exporters
III. Mandatory List
IV. ARMM List
37
Philippines’ GSP+ Status with EU
• Approved in December 2014.
Grant of GSP+ Status
to the Philippines
by EU
Benefits
• Provides duty free entry to the EU for some of
the most important PH exports including fruit
and foodstuffs, coconut oil, footwear, fish and
textiles.
• The PH now has leverage for businesses
with agricultural and manufacturing facilities
who wish to enter the EU market.
• PH’s total exports to EU is expected to grow
by 12%, creating additional 267,000 jobs.
• Industrial investments in sectors with zero tariffs
under GSP+
Market
Opportunities
• These include established Filipino exports that
are labour intensive such as pineapple juice,
garments, preserved fruits, tuna, fruit jams and
jellies, and footwear.
38
Investment Opportunities - Mexico
1. Manufacturing
•
•
•
•
•
Electronics
Energy
Food/Agribusiness
Aerospace
Consumer Products
2. Infrastructure Development
3. IT Services
39
Government Spending = Infrastructure
$ 17.9
787.19
Amount (In Billion Pesos)
(5.0%)
$ 13.0
569.9
(4.0%)
$ 10.1
442.3
$ 7.0
$ 4.9
$ 4.0
175.4
(1.8%)
215.7
(3.4%)
306.9
(2.7%)
(2.0%)
Up by 349%
from 2011-2016
Source: Department of Public Works and Highways
US $ 1 - P 44
40
Philippine Public-Private Partnership Program
Projects Under Procurement
Awarded Projects
•
•
•
•
•
•
•
•
•
•
Daang Hari-SLEX Link Road Project
PPP for School Infrastructure Project (PSIP)
– Phase I
NAIA Expressway Project (Phase II)
PPP for School Infrastructure Project (PSIP)
– Phase II
Modernization of Philippine Orthopedic
Center
Automatic Fare Collection System
Mactan-Cebu International Airport Passenger
Terminal Building
LRT Line 1 Cavite Extension and Operation
& Maintenance
Southwest Integrated Transport System
(ITS) Project
Cavite-Laguna Expressway
•
•
•
•
•
•
•
•
•
•
•
•
Integrated Transport System (ITS) – South
Terminal Project
Bulacan Bulk Water Supply Project
Operation and Maintenance of LRT Line 2
Laguna Lakeshore Expressway-Dike Project
New Centennial Water Source – Kaliwa Dam
Project
Development, Operations and Maintenance
of the New Bohol (Panglao) Airport
Development, Operations and Maintenance
of the Laguindingan Airport
Development, Operations & Maintenance of
Davao Airport
Development, Operations & Maintenance of
Bacolod Airport
Development, Operations & Maintenance of
Iloilo Airport
Regional Prison Facilities through PPP
Davao Sasa Port Modernization Project
41
Competitive Investment Incentives
INCENTIVE
Income Tax Holiday
(ITH)
ITH Bonus
BOI
(Executive Order No. 226, as amended)
CDC / SBMA
(Republic Act No. 7227 – Bases
Conversion Devt Authority
4 – 6 years (max of 8 years)
 Exempted from all local and national
taxes - value-added taxes, franchise
taxes, excise and ad valorem taxes)
3 years provided the firm meets certain
conditions
Special Tax Rate of 5% on
Gross Income
Special Tax Rate of 5% on Gross Income
Importation of Capital
Equipment, Spare Parts and
Supplies
0% duty-free
Tax and Duty-Free
Wharfage Dues and Export
Tax, Duty, Impost and Fees
Exempted
None
Simplification of Customs
Procedures
Employment of Foreign
Nationals
Others
AFAB
(RA 9728)
4 – 8 years
Special Tax Rate of 5% on Gross
Income after ITH period
0% duty-free
Exempted
Available
 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.
 Domestic sales allowance of up to 30% of total sales;
42
Doing Business in the Philippines
The Philippines is a ready market
Global acceptance of the Philippines as an
investment destination
The Philippines is gaining competitiveness
Filipinos are dependable, hardworking,
resilient
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