2014菲律宾投资指南（英文版）_34页_359kb

Summary of Doing Business in the Philippines: Seizing Opportunities

Core Content

The Philippines presents a compelling investment environment, characterized by strong economic performance, rising business confidence, and a favorable business climate. Despite global economic uncertainty, the country has demonstrated robust growth, making it a leading investment destination in Asia.

Main Economic Indicators

• GDP Growth: In 2013, the Philippines achieved a GDP growth of 7.4%, outperforming the previous year's 6.7%. The government projected growth between 6.5% and 7.5% for 2014, with some analysts predicting 10% annual growth by the end of the decade if fiscal and economic challenges are addressed.
• Growth Drivers: The industry and services sectors, particularly construction, manufacturing, financial intermediation, real estate, and other services, have been key contributors to growth.
• Business Confidence: The Business Expectations Survey by the Bangko Sentral ng Pilipinas (BSP) showed an all-time high in business outlook by the end of 2013, driven by Christmas season demand, increased orders, and expansion of businesses.

Investment Environment

• Credit Rating: Moody's upgraded the Philippines to Baa3, granting it investment-grade status, joining Fitch, S&P, and JCRA in recognizing the country's economic stability.
• Global Competitiveness: The Philippines ranked 59th in the 2013-2014 Global Competitiveness Index, reflecting a significant improvement in its economic outlook.
• Incentives: The government offers various incentives such as income tax holidays, tax and duty-free imports, and simplified customs procedures to attract investments.

Key Investment Sectors

1. Outsourcing

• Growth: The outsourcing industry, particularly voice-based BPO, has grown rapidly, with revenues expected to reach USD16.0 billion by 2013 and USD25.0 billion by 2016.
• Employment: Direct employment in the sector reached 960,000 in 2013, up from 777,000 in 2012.
• Services Offered: Includes contact centers, non-voice BPO, IT outsourcing, health information management, engineering services, animation, and game development.
• Market: The United States remains the largest market, but the industry is expanding into Japan, Australia, New Zealand, and the United Kingdom.
• Advantages: The Philippines is a top offshoring destination due to cost competitiveness, English proficiency, and availability of skilled labor.

2. Infrastructure

• Government Commitment: The Aquino Administration has prioritized infrastructure development to boost economic growth.
• Funding: The 2014 infrastructure budget is PHP399.4 billion (USD9.2 billion), a 35% increase from 2013, with a target of PHP820 billion (USD18.9 billion) by 2016.
• Projects: Focus on transportation, power, water, and flood control. The Transport Infrastructure Development Program is a major initiative.
• PPP Projects: The government is promoting public-private partnerships (PPP), especially in high-priority areas. Over 37 projects are in the pipeline.
• Incentives: Available under the Omnibus Investment Code (OIC) and other laws to encourage private sector participation.

3. Tourism

• Resilience: The tourism sector has shown resilience despite global and local challenges.
• Arrivals: In 2012, visitor arrivals reached 4.3 million, up 9% from 2011. For the first eight months of 2013, arrivals hit 3.18 million.
• Economic Contribution: Tourism directly contributed PHP571.3 billion to GDP in 2011, or 10% of the total.
• Inbound vs. Domestic: Domestic tourism expenditures are six times higher than inbound, indicating greater economic impact.
• Medical Tourism: The Philippines is an emerging player in medical tourism, with state-of-the-art hospitals and high English proficiency as key advantages.
• Legislation: RA 9593 (Tourism Act of 2009) supports tourism as an engine for growth and development. It designates Tourism Enterprise Zones (TEZs) and provides incentives to enterprises within these zones.

Foreign Investment Framework

• Legal Basis: Governed by RA 7042 (Foreign Investments Act of 1991), as amended by RA 8179.
• Investment Policy: The state encourages productive investments that contribute to industrialization and socio-economic development.
• Ownership Rules:
  • List A: Activities reserved for Philippine nationals, with foreign ownership limited by law.
  • List B: Activities with foreign ownership limits for security, defense, health, and protection of SMEs.
• Non-Philippine Nationals: Can own up to 100% of enterprises in export or domestic market sectors, subject to certain conditions.

Business Registration and Incentives

• Board of Investments (BOI): The lead agency for investment promotion, offering incentives to qualified enterprises in preferred sectors.
• Registration Requirements:
  • Minimum 60% Filipino ownership for corporations, partnerships, and cooperatives.
  • Pioneer projects or export-oriented enterprises may qualify if they meet specific criteria.
• Incentives:
  • Income tax holidays (up to 6 years)
  • Tax and duty-free imports of raw materials and equipment
  • Simplified customs procedures
  • Regional or Area Headquarters (RHQ/ROHQ) incentives

Conclusion

The Philippines offers a dynamic and promising business environment, supported by strong economic fundamentals, favorable policies, and diverse investment opportunities. With robust growth, rising business confidence, and a competitive outlook, it is an attractive destination for foreign investors looking to capitalize on sustainable development and market expansion.