PHILIPPINES INVESTMENT

CLIMATE AND OPPORTUNITIES

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International Investments Promotion Service

BOARD OF INVESTMENTS

Due diligence assistance

• Information support

• Visit program development & investment

briefing

• Business matching

Business registration facilitation

• Networking with IPUs and other government

agencies on pre-operational business

requirements

• Fast tracking with registration procedures

• Assistance with local government requirements

Aftercare service

• Presence of government network to quickly

respond to concerns

• Regular supervision & monitoring

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THE PHILIPPINE BOARD OF INVESTMENTS Your Window to Infinite Opportunities in the Philippines.

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Magical 10 Indicators of a Growing

Philippine Economy

1. Stable and Resilient Economic Growth

GDP (2012) 6.8%

GDP (2013) 7.2%

Headline Inflation (2013) 3.0%

Headline Inflation (2014) 4.1%

Source: National Statistical Coordination Board;

Bangko Sentral ng Pilipinas (BSP) 4

GDP (2014) 6.1%

Headline Inflation (2015, Q1) 2.4%

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3a. Robust FDI Inflow

2014: US$24.3 Billion (5.8 % increase)

Land based: US$18.73 Billion (5.5 % increase)

Sea based: US$5.58 Billion (6.9% increase)

2013: US$23.0 Billion

2014: US$6.2 Billion

2013: 3.6 Billion

2012: 3.2 Billion

2011: 2.0 Billion

2010: 1.1 Billion

2. Continuous Inflow of OFW Remittances

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BOI-PEZA Approved Investments In PHP billion

2014 TOP SECTORS (% of Total Investments)

1. Real Estate Activities

2. Electricity, Gas, Steam & Air Conditioning

3. Manufacturing

4. Construction

5. Administrative Support Service Activities

2014 TOP SOURCES (% of Total Foreign Investments)

1. Japan

2. Netherlands

3. U.S.A.

4. Cayman Islands

5. Indonesia

3b. Steady Investment Flows

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

2011 2012 2013 2014

657.3 672.3

742.2

634.2

218.8

283.4 268.3

164.5

Total Investments Foreign Investments

4. Steady Export Growth

The Gross International Reserves reached Approximately US$80 Billion in 2014

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Merchandise Exports

2014: US$61.81 billion (9.0% higher than 2013)

(electronic products as top

export with almost 50% share of total exports)

2013: US$56.7 billion

Service Exports

2014: US$24.8 billion (6.4% higher than 2013)

(anchored on the IT/BPM Sector with revenues of around $18 b

and 1 million employees)

2013: US$23.3 billion

Outstanding loans of universal

and commercial banks

(in billion)

2014

US$110.46

2013

US$96.52

2012

US$89.03

5. Robust Domestic Financial Sector Coupled with Credit Growth

Non-performing loans ratio

of universal and

commercials banks

2014

1.81%

2013

2.13%

2012

2.76%

Average bank

lending rate

2014

5.5%

2013

5.8%

2012

5.7%

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6. Efficient Revenue Collection

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INCREASING REVENUES

• National government revenues for 2014 amounted to PhP1.91 trillion.

• For 2013, the national government revenues reached PhP1.72 trillion.

DECREASING FISCAL DEFICIT

• National government fiscal deficit for 2014 amounted to PhP73 billion.

• For 2013, the national government fiscal deficit reached PhP164.06 billion.

7. Improving Global Competitiveness Ranking

+5 Out of 152 countries:

From #56 to 51

+13 Out of 189 countries:

From #108 to 95

+13 Out of 178 countries:

From # 89 to 76

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+7 Out of 144 countries:

From #59 to 52

Ease of Doing Business

Report 2015 By World Bank-IFC

Global Competitiveness

Index (2014/2015) By World Economic Forum

Economic Freedom

Index 2015 By Heritage Foundation

Economic Freedom of the

World 2014 Annual Report By Fraser Institute

8. Dynamic People

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• Asia’s friendliest country • 8th World’s friendliest country

HSBC World Explorer Survey 2011

• 12th largest population in the world

• Set to become the world’s 16th largest economy, up 27 places from today

• One of the new emerging countries due to favorable demographics and strong economic fundamentals

HSBC’s “The World in 2050” Report

Corruption Perceptions Index

by Transparency International (2014)

Government Effectiveness Indicator by World Bank (2012)

+9 Out of 175 countries:

From #94 to 85

+1 Out of 215 countries:

From #57 to 58

9. Strengthened Governance and

Anti-Corruption Measures

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10. Credit Ratings

Fitch Ratings

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BBB-

Outlook: Stable

March 2013

BBB-

Outlook: Stable

March 2014

BBB-

Outlook: Stable

May 2013

BBB

Outlook: Stable

May 2014

Baa3

Outlook: Positive

October 2013

Baa2

Outlook: Stable

December 2014

Standard & Poor’s

Moody’s Investors Service

Y2013 Y2014

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Magical 10 Indicators

Stable and Resilient Economic Growth

Continuous Inflow of OFW

Remittances

Steady Export Growth

Steady Investment Flows

Robust Domestic Financial Sector

Coupled with Credit Growth

Efficient Revenue Collection

Improving Global Competitiveness

Ranking

Dynamic People

Strengthened Governance and Anti-Corruption

Measures

Credit Ratings

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The Philippine Advantage

Rich Talent Pool

Infrastructure Development

Critical Market Access First-Class Lifestyle

Competitive Investment Incentives

The Philippine Advantage

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Rich Talent Pool

Number of college degree

graduates per year

2013

Projection

Medical and natural sciences,

allied fields 158,159

Business, accounting, and

related fields 119,526

Social and behavioral

sciences, education 67,474

Engineering and architecture 57,799

IT-related and mathematics 57,921

Fine arts, masscom,

humanities 13,549

Others 58,845

TOTAL Tertiary Level 533,273

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.

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Infrastructure Development

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AIRPORTS

• 10 international

• 75 domestic

RAILWAYS

• 3 connecting railways, which span across the Metro

• 18 roll-on/ roll-off ports

ROADS

• Subic-Clark-Tarlac Expressway

• Manila-Cavite Expressway

• North Luzon Expressway

• Manila Skyway

• Southern Luzon Expressway

• STAR Tollway and Cavite Expressway

• Tarlac-Pangasinan-La Union Expressway

ECONOMIC ZONES

• 68 Manufacturing EcoZones

• 209 IT Parks and Centers

• 19 Agro-Industrial EcoZones

• 19 Tourism EcoZones

• 2 Medical Tourism Zones

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Critical Market Access

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.

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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 – value-for-money housing, modern recreational facilities,

first-rate educational institutions adopting international standards, business centers,

hospitals, etc.

A growing favorite tourist destination, as evidenced by the steadily increasing tourist

arrivals

Competitive Investment Incentives

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INCENTIVE Board of Investments (BOI)

(Executive Order No. 226, as amended)

Philippine Economic Zone Authority (PEZA)

(Republic Act No. 7916, as amended)

Income Tax Holiday (ITH) 4 – 6 years (max of 8 years)

ITH Bonus 3 years provided the firm meets certain conditions

Special Tax Rate of 5% on Gross

Income None Special Tax Rate of 5% on Gross Income

Importation of Capital Equipment,

Spare Parts and Supplies 0% Duty Tax and Duty-Free

Importation of Raw Materials &

Supplies used in Export Tax Credit Tax & Duty-Free

Value Added Tax Zero Rating for Exports 0%

Employment of Foreign Nationals Special Non-Immigrant Working Visa within 5 years from project’s registration including

spouses and unmarried children under 21 years of age

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Investment Opportunities

I. Preferred Activities

1. 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

2. AGRIBUSINESS AND FISHERY

3. SERVICES

4. ECONOMIC & LOW COST HOUSING

5. HOSPITALS

6. ENERGY

7. PUBLIC INFRASTRUCTURE & LOGISTICS

8. PPP PROJECTS

II. Export Activities

III. Mandatory List

Manufacture of export products

Services exports

Activities in support of exporters

IV. ARMM List

Investment Priorities Plan 2014

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Other Areas for Investments

Special Investor’s Resident Visa (SIRV)

• encourages small investments in the Philippines from foreign nationals

• grant of multiple indefinite visa for as long as investment subsists

• $75,000 investment in viable economic activities pursuant to Book V of the Omnibus Code of 1987

Retail Trade Liberalization Act of 2000 (RA 8762)

• Category B – with minimum paid-up capital of $2,500,000.00

• Category D – with $250,000.00 paid up capital per store; specializing in high-end or luxury products; can be wholly owned by foreigners

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BASIC RIGHTS & GUARANTEES OF A FOREIGN INVESTOR

(Under Chapter 3 Title 2 of E.O. No. 226)

Protection of Investment

Repatriation of Investments

Foreign Loans and Contracts

Freedom from Expropriation

Remittance of Earnings

Requisition of Investment ( in the event of war or national emergency)

o Long term lease on private lands for a period of 50 years renewable for

another 25 years;

o Use of leased area that is reasonably required solely for investment such

as establishment of industrial estate, factories, assembly or processing

plants, agro-industrial, tourism, etc.

o Leasehold right may not be sold, transferred, assigned and/or sub-lease

without prior BOI Board approval except when made to a Philippine

national;

o Termination of lease agreement in case of :

• Failure to initiate the investment project within three (3) years from

signing of the lease agreement;

• Withdrawal of the approved investment without Board approval; and

• Use of the leased premises other than that authorized by the Board

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Investor’s Lease Act (RA 7652)

Appreciation of Investment Environment

Source : 2014 JETRO Study

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International Investments Promotion Service (IIPS)

Direct Line: (632) 896-8907

Trunk Line: (632) 897-6682 loc. 246

Email: IIPS@boi.gov.ph

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

mailto:IIPS@boi.gov.phhttp://www.boi.gov.ph/