business opportunities in the philippines. stable and resilient economic growth gdp (2012) 6.8% gdp...
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BUSINESS OPPORTUNITIES IN THE PHILIPPINES
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
GDP
Stable and Resilient Economic Growth Stable and Resilient Economic Growth
GDP (2012) 6.8%
GDP (2013) 7.2%
Headline Inflation (2012) 3.2%
Headline Inflation (2013) 3.0%
Source: National Statistical Coordination Board & National Statistics Office
Continuous Inflow of OFW Remittances Continuous Inflow of OFW Remittances
•2013: US$22.76 Billion (6.4% higher than 2012 record)
•2012: US$21.39 Billion (6.3% higher than 2011 record)
•Remittance drew strength from demand for skilled and professional Filipinos abroad, along with better data capture through banks and financial institutions
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Merchandise Exports:
Steady Export GrowthSteady Export Growth
Service Exports:
2011: US$11.9 Billion
2012: US$13.1 Billion(anchored on BPO sector with direct employment of 772,000)
Growth of 11.3% in Gross International Reserves to an all-time-high of US$83.8 Billion in 2012 relative to
US$75.3 Billion in 2011
2011: US$48.31 Billion
2012: US$51.99 Billion
(7.6% higher than 2011)
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TOTAL BOI & PEZA APPROVED INVESTMENTS(in PhP Billion)
Steady Investment FlowsSteady Investment Flows
10.4% *
US$ 15.17B US$ 15.92B
US$ 17.48B
US$ 5.05BUS$ 6.69B
Total Investments Foreign Investments
*Preliminary Estimate
World Bank
Ease of Doing Business
Report 2014
World Economic Forum (2013/2014)
Global Competitiveness Index
Economic Freedom of the World
(2013 Annual Report)
2014 Index of Economic Freedom
7. Improving Global Competitiveness Ranking7. Improving Global Competitiveness Ranking
+5Out of 152 countries:
From #61 to 56
+30Out of 189 countries:
From #138 to 108
+8Out of 177 countries:
From #97 to 89
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+6Out of 148 countries:
From #65 to 59
Credit RatingsCredit Ratings
Standard & Poor’s
Moody’s
FROM TO
BB+
Ba1
BB-
BBB-
Outlook: Stable
Baa3
Outlook: Positive
BBB-
Outlook: Stable
INVESTMENT GRADE
7
Fitch Ratings
World Bank (2012)
Government Effectiveness Indicator
Transparency International (2013)
Corruption Perceptions Index +11
Out of 177 countries:
From #105 to 94
+1Out of 215 countries:
From #57 to 58
Strengthened Governance and Anti-Corruption Measures
Strengthened Governance and Anti-Corruption Measures
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I. Preferred ActivitiesRegular List:
Agriculture/ Agri-business and Fishery Creative Industries/Knowledge-Based
Services Shipbuilding Mass Housing Iron and Steel Energy Infrastructure Research and Development Green Projects Motor Vehicles Strategic Projects Hospital /Medical Services Disaster Prevention, Mitigation and Recovery
Projects
II. Export Activities
III. Mandatory List
Manufacture of export products Services exports Activities in support of exporters
IV. ARMM List
Investment Priorities Plan 2013Investment Priorities Plan 2013
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Food ProcessingFood Processing
King Salmon grown, washed, gutted, without head, in New Zealand
Filleting, Salting, Smoking, Slicing, and Packaging, in the Philippines
Exported to Philippines (GenSan) duty free
Exported and consumed in Australia, NZ, USA, Korea, HK, etc.
Other Countries
Auto PartsAuto Parts
• Philippine top exports products to Australia are auto parts
• Auto part exports include wiring harness, steelbelted tires, lead acid batteries, road wheels, intake air filters, brake and clutch pedals are also major exports products to the world
Furniture and HomewareFurniture and Homeware
ShipbuildingShipbuilding• Philippines is now the 4th largest
shipbuilder in the world• Building a wide range from small
high tech vessels to the largest commercial ships in the world
• One company Hanjin employs 21000 workers in Subic and makes 320K DWT Capesize tankers
• One of Australia’s top 4 shipbuilders, Austal, just located in Cebu last year
2012FTEs Revenue
(US$M)% inc.fr ’11
Voice BPO 497,000 8,697 18%
Non-voice BPO/KPO
154,380 2,470 20%
ITO 57,078 1,160 17%
Health Info Mgt & Care
45,000 460 66%
Engineering Services
10,836 206 20%
Animation 9,000 132 3%
Game Development
3,500 50 251%
TOTAL FTEs 776,794 13,174 19%
ICT and Business Process OutsourcingOne of the most active sectors right now for global and Australian investments
ICT and Business Process OutsourcingOne of the most active sectors right now for global and Australian investments
Philippine IT-BPM industry size2008–2014e; US$ billion
x% YoY Growth
# FTEs(~’000)
383 424 527
Global share1
6% 7% 8%
6.1 7.1
8.9 11.0
13.2 15.0
18.0
2008 2009 2010 2011 2012 2013e 2014e
34% 17%25%
24%
CAGR:
~20%
19%
640
9.5%
777
10.4%
3.2
7.18.9
11.013.4
15.0
20.0
25.0
Philippines IT-BPO industryUS$ billion
1.3M 2.2MIndirect employment 600K 1.1M 3.2M
% of GDP 2.6% 4.5% 6.7%4.2% 8.3%
1.7M
5.0%
2006 20102009 Road Map 2016
Baseline 2016
CAGR: ~28%
PPPCAGR: ~19%
Low-end 2016
525K 900KDirect employment 240K 423K 1.3M680K
2011 2012
1.6M
5.2%
638K
1.9M
5.9%
772K
15%‒20% CAGR over next 5 years expected
ICT and Business Process OutsourcingOne of the most active sectors right now for global and Australian investments
ICT and Business Process OutsourcingOne of the most active sectors right now for global and Australian investments
The Philippine AdvantageThe Philippine Advantage
Rich Talent Pool
Robust Infrastructure
Strategic Business Location
First-Class Lifestyle
Attractive Investment Incentives
Robust Infrastructure
• 9 international and 20 domestic airports,
• 3 connecting railways which span across the Metro, and 12 roll-on/roll-off ports.
• Newly constructed roads such as the 94-kilometer four-lane Subic-Clark-Tarlac Expressway (SCTEX), the 84-kilometer North Luzon Expressway (NLEX), the 42-kilometer STAR Tollway and Cavite Expressway (CAVITEX)
The Philippine AdvantageThe Philippine Advantage
Strategic Business Location
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.
The Philippine AdvantageThe Philippine Advantage
First-Class Lifestyle
• 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.
• 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.
The Philippine AdvantageThe Philippine Advantage
Income Tax Holiday (ITH) for 4 years, extendable to 8 years
After the ITH period, special 5% tax on gross income in lieu of all national and local taxes
Exemption from duties and taxes on imported capital equipment, spare parts, supplies, and raw materials
Domestic sales allowance of up to 30% of total sales Exemption from export taxes, wharfage dues, imposts
and fees Exemption from Value Added Tax (VAT) on allowable
local purchases such as telecom, power, and water bills
Additional deduction of 50% of total manpower training cost under the special 5% gross income tax regime
The Philippine AdvantageThe Philippine Advantage
Investment Incentives
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Number of college degree graduates
Medical and natural sciences, allied fields
119,378
Business, accounting, and related fields
117,339
Social and behavioral sciences, education
68,811
Engineering and architecture 50,734
IT-related and mathematics 47,928
Fine arts, masscom, humanities 12,269
TOTAL Tertiary level 481,862
Abundant labor force of 39+ million
460,000+ college graduates per year
3,000+ CPAs English proficiency & other
languages Affinity with Western culture Customer service orientation Highly trainable Cost effective High level of commitment
and loyalty
The Philippine AdvantageThe Philippine Advantage
Our People
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 ~
8. Dynamic People8. Dynamic People
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