Bacolod, Baguio, Butuan, Cagayan de Oro, Davao, Dipolog,

Naga, Pasay, Puerto Princesa,Tacloban, Tagbilaran

BOIInvestmentRoadshow

2012 IPP Presentation

I. Perspectives

II. Preferred Investment Areas

III.Potentials

OUTLINE (PPP)

Part : Perspectives

“Perspective is the most powerful tool we have”- Edmond Sailer

1

WHY INVEST?

To enhance the Value of your Savings (i.e. Bonds, Deposits)

To pursue Personal Interests(i.e. Retailing, Real Estate Stock Market)

To participate in Nation Building(i.e. Direct Investments in preferred

areas

ECONOMICS 101GDP = C + I + G + (X-M)

C = Consumption I = Investments G= Government Expenditures

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

5

10

3.2

4.65

6.7

4.85.2

6.6

4.2

1.1

7.6

3.7

Gross Domestic Product (GDP)Annual Growth Rates (%) 2001 - 2011

THE INVESTMENT ECOSYSYTEM

PLACE1

• A large domestic market• Competitive operating

environment• Less vulnerable to global downturn• Industrial peace• Accelerated infra program

NETWORKS

4

• Investment promotion agencies

• Local investment councils

PEOPLE

2 • Growing number of entrepreneurs

• Young labor force

• Training programs intensified

3FUNDS

• High liquidity• Low interest rates• High investors confidence• Government support to SMEs

AGRI INDUSTRY SERVICES

INVESTMENT PROMOTIONAGENCIES

DOMESTIC

Board of Investments

EXPORT

Philippine Ecozone Authority (PEZA)

BOI’S ROLE IN PROMOTINGINVESTMENTS

INDUSTRYROADMAP

TARGETEDINVESTMENTPROMOTIONS

TRADE/INVESTMENTNEGOTIATION

PREFERRED ACTIVITIES

REGISTERELIGIBLEPROJECTS

ADMINISTERINCENTIVES

INVESTORFACILITATION

Red Tape to Red Carpet

• “The red tape that has for so long encumbered your generation has now been turned into a red carpet”

- President Benigno S. Aquino III April 2012

BOI REGISTRATION SIMPLIFIED

• No more detailed 5 year Financial Projections required for 95% of projects

• Only 4 page Application form (inclusive of supporting schedules)

• Endorsements from other agencies required only after BOI approves the project

• Board action 2 weeks after filing

OTHER LAWS ADMINISTERED BY BOI

• Registration of RHQ and ROHQ (Book III of EO 226)

• Special Investor’s Resident Visa (Book V of EO 226)

• Investor’s Long-term Lease Act of 1993 (RA 7652)

• Retail Trade Liberalization Act of 2000 (RA 8762)

• Jewelry Industry Development Act of 1998 (RA 8502)

• Footwear, Leather Goods and Tannery Development Act of 2004 (RA 9290)

Part : Preferred Investment

Areas “This year’s IPP has been crafted to focus on four critical areas; job

generation, enhanced delivery of social services, international competitiveness and climate change mitigation and adaptation”.

- Pres. Benigno S. Aquino III- June 2012 (IPP Message)

2

2012 INVESTMENT PRIORITIES PLAN

Agribusiness Creative/Knowledge-based Disaster PMR Energy Green Projects Hospitals Infrastructures Iron and Steel Mass Housing Motor Vehicle R & D/ Training Shipbuilding Strategic Projects

Books Mining Petroleum Products PWD Support Renewable Energy Tourism Solid Waste Management Water Supply

Manufactured Products Services Exports Activities Supporting

Exports

PREFERRED MANDATORY

EXPORTS

AGRI-BUSINESS

1. Commercial Production• Crops planted in New Areas• Poultry and Livestock

2. Commercial Processing• Locally Grown Raw Materials• Animal and Aqua Feeds

3. Services • Post Harvest facilities• Mechanized Harvest 4. Fertilizers and Pesticides

CREATIVE & KNOWLEDGE-BASED INDUSTRIES

1. Non- Voice BPOs (Voice now listed under Exports)

2. IT Enabled Services with Original Content• Software development • Animation• Engineering Design• Game Development

DISASTER PREVENTION, MITIGATION & REHABILITATION

1. Manufacture and Assembly of Goods and Equipment related to Disaster Mgt.

2. Services related to Disaster Mgt.• Salvaging Operations• Early Warning Systems• Oil-spill Clean Up• Bridge Rehabilitation• Flood Control Services

GREEN PROJECTS

1. Manufacture or Assembly of Goods & Equipment that leads to:

• Efficient Use of Energy• Efficient Use of Natural Resources• Reduce GHG• Minimize Pollution

2. Energy Efficient Related Facilities (i.e. District Cooling)

HOSPITALS

Development and Operation of Primary, Secondary and Tertiary hospitals

MASS HOUSING

1. Development of Low-cost Housing(Selling Price > P 400,000 < P 2.5 million)

2. Manufacture of Modular Housing Components

R&D / TRAINING

1. Research/ Testing Facilities2. Business/Technology Incubators3. Shared Service Facilities4. Manufacturing & Agri business enterprises

located in SUCs (outside NCR)5. Training Institutions in Support of IPP

TOURISM (R.A. 9593)

1. Transportation Facilities2. Accommodation Facilities3. Health & Wellness Facilities4. Retirement Villages5. Historical Destinations

CAPITAL INTENSIVE PREFERRED AREAS

• ENERGY (exploration, development and utilization of energy sources)

• INFRASTRUCTURE (transport, water, logistics, physical infra and PPP)

• IRON & STEEL (long and flat products, fabrication of machinery)

• MOTOR VEHICLES (2 and 4 wheel vehicles, parts manufacturing)

• SHIPBUILDING (> 500 ton ships)• STRATEGIC PROJECTS (packaging products

and essential drugs).

Part : Potentials

“The great end of life is not knowledge but action”- Thomas Huxley

3

PROJECTS REGISTERED

CAR

REGION 1

REGION 2

REGION 3

REGION 4

REGION 5

REGION 6

REGION 7

REGION 8

REGION 9

REGION 10

REGION 11

REGION 12

REGION 13

NCR0

50

100

150

200

250

821

3

58

160

1023

52

412

2638

10 8

224

Number of Projects By RegionJuly 2010-June 2012

OPPORTUNITIES ABOUND

SME’s FDI’s

Manufacturing:• Large domestic market,

increasing disposable income

• Free trade agreements w/ key trading partners- ASEAN ($1.8T) 7B/R/I

Agriculture:• Huge demand for HALAL

food ($340B)• Higher income in key

markets

Services:• Tourism arrivals rapidly

increasing 2011-11.2% / 2012-14.6%

• BPO increasing by 15-20%

Japan• Strength of Yen• Vulnerable to calamities

China• High labor costs

(P336/day Shenzhen)

Vietnam• Inflation rate of 20%

Thailand• Sharp increase in labor

costs (P397/day)

Taiwan• Base for ASEAN market

AGRI-BUSINESS: HIGH QUALITY, HIGH VALUE

Fisher Farms, Inc. (FFI) in Bulacan is the leading aquaculture food processor in the Philippines. The company has 934 employees.

Recipient of the Superior Taste Award from Belgium-based Taste and Quality Institute (ITQI) – a global organization of Chefs.

MANUFACTURING: IN A SWEET SPOT

D’Luxe Bags Philippines, Inc. in Tarlac City manufactures fashion bags for global brands.The company will employ 4,000 workers.

TOURISM: MORE FUN…MORE HOMEWORK

Paraiso Verde Resort & Water Park has water amusement attractions like wave pool, raging river pool, kiddy pools and pools w/ shade. The company is located in South Cotabato and employs 65 people.

+ INCENTIVES

- DISINCENTIVES

Factors impeding business confidence:1) Corruption (24.4%)2) Inefficient bureaucracy (18.3%)3) Infrastructure* (16.5%)

* Average cost of electricity to cost of manufacturing goods is only 4.63%

PATHS TO NATION BUILDING

JOB-GENERATION• Agri-business• Shipbuilding• Tourism• Mining• Export –oriented Industry

SOCIAL SERVICES• Mass housing• Hospitals• Disaster-related• Support to PWD• Solid waste management• Water supply

COMPETITIVENESS• Energy• Infrastructure• Creative-knowledge based• R&D / Training• Iron & steel• Strategic projects• Downstream oil industry

CLIMATE CHANGE• Green projects• Renewable energy• AFV & E-motor vehicles

“Remember, amateurs built Noah’s

Ark;Professionals

built the Titanic”

SAILING ON THE ARK

FROM SICK MAN TO OLYMPIAN

TOPECONOMIES

BY 2050 (HSBC)

RANK COUNTRY CHANGE IN RANK from 2010

1 China +2

2 U.S. -1

3 India +5

4 Japan -2

5 Germany -1

6 UK -1

7 Brazil +2

8 Mexico +5

9 France -3

10 Canada Same

11 Italy -4

12 Turkey +6

13 South Korea -2

14 Spain -2

15 Russia +2

16 PHILIPPINES +27

17 Indonesia +4

18 Malaysia +17

19 Thailand +6

CONNECTIVITY

facebook.com/invest.phl

twitter.com/boiphilippines

Board of Investments-Main Office

385 Sen. Gil Puyat Ave. Makati CityEmail: nerbac@boi.gov.phTel. (02) 897-6682

BOI CebuGround Flr. LDM Bldg.Lapu-Lapu St., Cebu City Tel. No. (032) 412-1945/44

BOI Davao4th Flr. Mintrade Bldg., cor. Monteverde & Sales Streets, Davao CityTel. No. (082) 222-4677

BOI Cagayan de OroMuñoz Bldg., 52nd Business Center cor. Tiano Gaerlan Street,Cagayan de Oro City Tel. No. (088) 857-4867