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ABUSINESSANDINVESTMENTENVIRONMENTINTRODUCTION
Phili!ine
QUiCK
lACIs
susiness
Climate
Text
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(1) Strong Stock Market
Business Climate
QUiCK
lACIs
susiness
Climate
(2) Stable and Resilient Economic Growth
Business Climate
Business Climate
(3) Continuous Inow of OFW Remittances
2011OlvremittancescrossedtheUss20sillionLarriervithull
yearrecordoUss20.12sillion
2012:Uss21.!9sillion,.!higherthat2011record
Remittance drev strength rom demand or skilled and proessional
lilipinos aLroad, along vith Letter data capture through Lanks and
inancialinstitutions
Business Climate
(4) Steady Investment Flows
Business Climate
(5) Robust Domestic Financial Sector Coupled with
Credit Growth
Outstandingloansouni\ersalandcommercialLanksamountedto
I!.10IrillionLytheendo2012,higheste\erinLankinghistory.
AsoendOct2012,non-perormingloansratioouni\ersaland
commercialLanksisat2.0percentrelectinganimpro\ementromthe
end2011`s2.4percent.
A\erageLanklendingrate:.|DecemLer2012)
Business Climate
(6) Efcient Revenue Collection
Ihenationalgo\ernmentiscaldeicitortheperiod1an-Xo\2012
amountedtoI12.!sillion.

Ihenationalgo\ernmentdeicitnovstandsat1.4oGDI|Q1-Q!
2012),LetterthantheiMlstandardo2.0or2012andputs201!
Ludgetontrack
Re\enueperormanceortheperiod1an-Xo\2012vas1!higher
comparedtothesameperiodin2011.
Business Climate
(7) Improving Global Competitiveness Ranking
Business Climate
(8) Strengthened Governance & Anti-Corruption Measures
Business Climate
(9) Dynamic People
GETTING THE WORLDS
ATTENTION
CXsC:IhilippinesisAsia`sXevDarlingo
in\estors|August!0,2012)
XevYorkIimes:IheIhilippinesXevestsright
spotinAsia|August2,2012)
Deutschesank:Ihilippines-strongestAsian
Bconomy|sloomLergsusinessveek|Aug.9,2012)
standard8Ioor`s:IhilippineBconomy,arare
Lrightspot|1une4,siXGAIORB-LasedDssItd.
againupgradedits2012grossdomesticproduct|GDI)
orecastortheIhilippines,Lutloveredtheoutlook
ornetyear`seconomicepansion.
2012vealthReport:IheIhilippinesistheth
astestgrovingeconomyinthevorld
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)!
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 Pacic
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.!

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 foreign
ownership!
-Reduced debt from 68% of GDP in 2003 to 41% in 2012!
Goldman Sachs identifies Philippines as successor to BRICS
COMIBIiIiVB
ADVAXIAGBs

64.1% labor force participation rate

(2013) with 92% employment rate

95.4% Literacy rate --one of the

highest literacy rates in the world
(ADB, 2008)

70% uency in English

500,000 college graduates per year

(100,000 IT / Computer
Science Graduates, 111,000
Business Graduates and
73,000 Medical & Allied/
Natural Sciences Graduates)

Fluent in English The Philippines is

the worlds third largest english
speaking nation.

Exported and highly sought worldwide

PHILIPPINES: WINNER
OFFSHORING DESTINATION
OF THE YEAR 2010, 2009 AND
2007
WorldClassHumanResource
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 AND
NETWORKS

completely deregulated

International connectivity and expanding multimedia Infrastructure

high volume capacity for voice

EstablishedInfrastructure&
TelecommunicationsNetworks
StrategicLocation

The Philippines borders Asia Mainland and the Pacic

Ocean.

Convenient Access to the 550 Million-strong ASEAN

Market

Reachable within 4 hours by plane from other key

Asian Cities

Regional Hubs in neighbouring ports and countries

such as Singapore, Hongkong and Tokyo provide
numerous 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
UnmatchedGovernment
Incentives&Support

4 to 6 years Income Tax Holiday

Special 5% tax rate on gross income after

the lapse of the Income Tax Holiday for
Economic and Special Zone locators

Tax and duty exemption and Zero Duty on

qualied imported capital equipment

Exemption from 12% V.A.T on allowable

local purchase of goods and services

Unrestricted use of consigned equipment

Employment of foreign nationals

Working Visas, Special Investors Resident

Visas, Retirees Visas
Manufacturing 63
IT Parks 127
Tourism 9
Medical Tourism Parks/ Centers 2
Agro Industrial Centers 6
Invetment O!o#unitie
PrioritySectors:
InvestmentPrioritiesPlan2012

Agriculture/ Agri-
business and Fishery

Creative Industries/
Knowledge-Based
Services

Shipbuilding

Mass Housing

Iron and Steel

Energy/ Renewable
Energy

Infrastructure
Research and Development
Green Projects
Motor Vehicles
Tourism Investments
Strategic Projects
Hospital /Medical Services
Disaster Prevention,
Mitigation and Recovery
Projects
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 than
Indias projected $5.58 billion
VOICE
Credible 10% share that is rapidly growing
Large industry-specific opportunity (e.g.
BFSI, healthcare, media, HR, KPO
Evolving value-propositions - tools, process
improvement, end-to-end accountability
Non-voice
Highly penetrated applications market
Emerging opportunities to penetrate
ASEAN, innovate for the U.S.
Third largest pool of engineers after India
and China in APAC
IT/ESO
Source: Everest analysis
Philippine IT-BPO industry size
20062009; US$ 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
Global
share
1
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
Industry Growth Trajectory
~50% ~26% ~16% ~25%
Courtesy of the Business Processing Association of the Philippines
~24%
638
8%
IT-Enabled&BusinessSupportServices
Diversication of the Industry
10
Proprietary & Confidential. 2010. Everest Global and Outsource2Philippines.
Signs of Diversification
Philippine IT-BPO service segments
US$ billion
Philippine IT-BPO source markets
US$ billion
Note: 2006 Split per ICT Survey of IT and ITES; 2010 estimates from Everest-O2P survey
Sources: BPAP; Everest-O2P survey
Voice BPO
Non Voice
BPO
IT/ESO
3.2 8.9 100% =
U.S.
UK/EU
APAC
3.2 8.9 100% =
Domestic
Energy&Renewables

Bio-Fuels (Bio-Diesel & Bio-Ethanol) - The government

targets to implement a 1% CME blend with diesel fuel for vehicles in
2007, to reach 2% in 2009; and 5% ethanol blend with gasoline fuel
for vehicles within 2007-2009, to reach 10% in 2011.

Hydropower - Indicative Hydropower potentials are currently at

2,400 MW

Geothermal - The Philippines is 2nd only to the US in terms of

Geothermal Energy potential reserves. With only 1,931 MW installed
out of 2,047 MW proven geothermal reserves and 4,790 MW
potential reserves, there are obviously plenty of opportunities for
expansion and private sector involvement.

Wind Energy - Comprised of 7,107 Islands, the Philippines has

maximum potential for wind energy generation. 16 wind power sites
were offered to private investors during the 1st wind contracting
round with a potential capacity of 345 MW.

Solar Energy - Opportunities abound in Micro and Small-sized

Solar Energy Plants from 1MW-5W.

Compressed Natural Gas - Minimum investment requirements

of about $4.0B between 2006 2014
*Feed-In Tariff Rates make Renewable Energy Generation now more attractive for
investors
ResourceExtraction&
SustainableMining

Located in the Ring of Fire

5th most mineralized country in the

world (2nd in Gold, 4th in Copper, 5th
in Nickel, 6th in Chromite)

Established reserves of 13 known

metallic and 29 non- metallic minerals
(Mines & Geosciences Bureau)

RP has 9 million hectares of

mineralized land

Only 420,000 hectares have mining

permits. 8.6 million hectares still
awaiting for the right investments.
Public-Private
Partnership

A Social Contract with the

Filipino People

All transactions are transparent

& above board

Consultative view on private

sector areas of concern

Protection of public interest

Private Sector, an important

role in nation-building

Indispensable roleprivate
sector as partner in
development
Public-Private Partnership: Eligible
Projects
TourismInvestments
*Tieza Law - provides incentives that facilitate investments
O$er Key Sectors
Electronics
CHANGING FACE OF CHANGING FACE OF
EXPORTS EXPORTS
Agro-Based
49%
Garments - 7%
Other
Manufactured
Products 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 COCONUT COCONUT CHIPS CHIPS
TO MICROCHIPS
Mineral Products -
18%
ELECTRONICS ELECTRONICS - - 3% 3%
1970 1970
ELECTRONICS ELECTRONICS --
61% 61%
Garments and Textiles - 6% Others - 13%
2010 2010
Sources : DTI/NSO
SEIPI

Electronics make up 61% of Total Philippine Merchandise Exports

Electronics exports was at US$6.75 Billion in 2011, an increase of

5.55% 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$47.8
Billion.
THE WORLDS TOP ELECTRONICS THE WORLDS TOP ELECTRONICS
FIRMS FIRMS
FOUR OF THE LARGEST HDD PRODUCERS ARE IN THE
PHILIPPINES
Hitachi Toshiba Fujitsu
NEC
CEBU MITSUMI employs >20K, biggest employer
in the Philippines; manufactures computer
peripherals and components such as CD-R,
CD-RW, optical pick up
Source: SEIPI
SEIPI
THE TOP CHIPMAKERS THE TOP CHIPMAKERS
7 OUT OF THE WORLDS TOP 20 CHIPMAKERS ARE
OPERATING IN THE PHILIPPINES
TIPI Philips
Fairchild
Analog Sanyo On Semi Rohm
Source: SEIPI
SEIPI
WHO ARE WITH US
IN ELECTRONICS?
ProfileofElectronicsFirms
NUMBER OF FIRMS: 936
THE COMPANIES IN THE INDUSTRY THE COMPANIES IN THE INDUSTRY
NATIONALITY:
- 72% Foreign
- 28% Filipino
Others
8%
Japan
30%
Sources: Philippine Board of Investments (BOI) &
Philippine Economic Zone Authority (PEZA)
- 28% Filipino
Philippines
28%
Malaysia
2%
Singapore
2%
Taiwan
4%
Europe
7%
USA
9%
Korea
10%
Source: BOI/PEZA
SEIPI
COMPETITIVENESS OF THE COMPETITIVENESS OF THE
INDUSTRY INDUSTRY
CRITICAL MASS OF GLOBAL PLAYERS CRITICAL MASS OF GLOBAL PLAYERS
Source: SEIPI
SEIPI
Ship-Building

Shipbuilding
-Shipbuilding(design,construction,
outfitting&launchinganytypeof
ship).Shipbuildinggiants,Japanese
TsuneishiandKoreanHanjinare
successfullyoperatinginthe
Philippines.Thereisroomformore.

Shiprepairconversion,overhaul,
alteration,modificationorrepairof
hull,machinery,equipment,outfitsand
componentsofanytypeofship

Shipyardoperations

Shipping
-Domesticshipping-Overseasshipping

Sea-faring/Manning
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