undersecretary ponciano c. manalo, jr. department of trade ...€¦ · 0 51 51 153 192 0 0 251 222...
TRANSCRIPT
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Undersecretary Ponciano C. Manalo, Jr.
Department of Trade and Industry – Industry Promotion Group Rizal Ballroom A, Makati Shangri-La Hotel
February 05, 2015
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PHILIPPINES
Asia’s Rising Tiger
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Sustained Economic Growth
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Sustained Economic Growth
GDP (2014) 6.1%
Headline Inflation (2014) 4.1%
GDP (2013) 7.2%
Headline Inflation (2013) 3.0%
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Sustained Economic Growth
Contributor to 2014 GDP Growth
PH GDP Growth
2010 7.7%
2011 3.7%
2012 6.8%
2013 7.2%
2014 (FY) 6.1%
2014 (4Q) 6.9%
Supply
Agri, Fishery and Forestry 1.9%
Industry Manufacturing
7.5% 8.1%
Services 6.0%
Demand
Household Final Consumption
Expenditure 5.4%
Government Final
Consumption Expenditure 1.8%
Capital Formation
Fixed Capital Formation
1.1% 8.6%
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Renewed Global Demand for
Products Made in the Philippines
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Merchandise Exports
Steady Export Growth
Service Exports
2013: US$56.7 Billion (8.8% higher than 2012)
Jan-Nov 2014: US$56.9 Billion
(10% higher than Jan-Nov 2013)
2013: US$22.6 Billion
(10.8% higher than 2012)
anchored on BPM sector that generated revenues of US$16.0 Billion and direct
employment of 917,529
Jan-Sept 2014: US$17.9 Billion
(9.2 % higher than Jan-Sept 2013)
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Steady Export Growth 2014 Philippine Merchandise Export Performance
Japan 22.6%
USA 14.1%
China 13% Taiwan 4%
Hong Kong 9%
Republic of Korea 4,9%
Germany 4.3%
Taiwan 4 %
Thailand 3.8%
Netherlands 3.1%
Others, 14.8%
Jan-Nov 2014 Top Export Markets
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Philippines is now a Preferred
Investment Destination
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Favorable Investment Climate
BOI-PEZA Approved Investments In PHP bn
+69.1%
+29.8% +2.3%
+10.4%
-14.5%
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Favorable Investment Climate
+69.1%
+29.8% +2.3%
+10.4%
-14.6%
Year Net FDI (USD billion)
2010 1.1
2011 2.0
2012 3.2
2013 3.6
Jan-Sept 2014 5.3 (+64.1% vs Jan-Oct 2013)
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Inbound Missions
In the first 3 quarters of 2014 alone, Japan
has already sent more than 40 missions to
the Philippines– 29% higher than the full
year figure of 2013.
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TIPI Philips Fairchild
Analog Sanyo On Semi Rohm
Samsung
Top chipmakers in the Philippines
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Hitachi Toshiba Fujitsu NEC
Largest Global HDD producers in the Philippines
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* Source: Survey Conducted by the US Chambers of Commerce in ASEAN, Manila Bulletin, September 4, 2012
Most Popular Expansion Destination
49% 19% 15%
11% 6% 3%
PH
ILIP
PIN
ES
VIE
TN
AM
SIG
NA
PO
RE
TH
AIL
AN
D
MY
AN
MA
R
IND
ON
ES
IA
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Philippines is Gaining Global
Competitiveness
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World Bank
Ease of Doing Business
Report 2015
World Economic Forum (2014/2015)
Global Competitiveness Index
Economic Freedom of the World
(2014 Annual Report)
2014 Index of Economic Freedom
Ease of Doing Business in the Philippines
+5 Out of 152 countries:
From #56 to 51
+13 Out of 189 countries:
From #108 to 95
+8 Out of 178 countries:
From #97 to 89
+7 Out of 144 countries:
From #59 to 52
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Philippines Indonesia Thailand Vietnam India
Less Linguistic / Communication
Problems 69.2 6.8 9.7 7.0 30.6
Easy to hire local staff (General
Worker/Staff/Clerk) 58.0 21.0 14.3 33.3 15.3
High Quality of Employees (General
Worker) 19.6 3.8 6.7 13.2 3.8
Easy to hire local staff
(Specialist/Engineer/Middle-Manager) 17.5 0.8 4.2 6.7 7.5
High Quality of Employees
(Specialist/Engineer) 15.4 1.9 5.1 7.7 7.8
High Employee Retention Rates 14.7 8.7 6.4 11.5 1.9
Tax Incentives (Corp Tax Holidays, etc.) 34.3 4.2 15.9 18.9 5.0
Source : 2013 JETRO Study
Appreciation of Investment Environment
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Appreciation of Investment Environment
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Credit Ratings Confirm Trust in Economy
BBB
Outlook:
Stable
BBB
Outlook:
Stable
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Transparency International (2014)
Corruption Perceptions Index
World Bank (2013)
Government Effectiveness Indicator
+9 Out of 177 countries:
From #94 to 85
+1 Out of 215 countries:
From #57 to 58
Strengthened Governance and
Anti-Corruption Measures
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The Philippine
Advantage
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Rich Talent Pool
Infrastructure Development
Critical Market Access
First-Class Lifestyle
Competitive Investment Incentives
The Philippine Advantage
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Asia’s friendliest country
8th World’s friendliest country ~ HSBC World Explorer Survey 2011 ~
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 ~
People – Our Greatest Asset
12th largest population in the world – 100 million
3rd largest English-speaking country
97.5% literacy rate
Over 40.1 Million labor force
24 yrs old average worker
23 yrs old median age
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Rich Talent Pool
• Educated and English Proficient
• Excellent Creativity
• Fast Learning Curve
• Highly Adaptable to Other Cultures
• High Level of Commitment and Loyalty
• Excellent Work Ethic
• Respect for Intellectual Property
Over 534,000 college graduates per
year:
• Business administration and related
fields
• Medical and allied
• Education and teacher training
• Engineering and technology
• Information technology
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Focus on Infrastructure Development
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Projects for Roll Out in the Next 12 Months
Rail Projects
Integrated Luzon Railway Project Phase 1
(North-South Commuter Rail)
Makati-Pasay-Taguig Mass Transit System
Loop
Other Projects
Regional Prison Facilities through PPP
North Luzon Expressway (NLEx) - South
Luzon Expressway (SLEx) Connector Road
Motor Vehicles Inspection System
Cavite-Laguna Expressway (CALAX)
Davao Sasa Port Modernization Project
Civil Registry System-IT Project (Phase II)
Tanauan City Public Market Redevelopment
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Critical Market Access
- Critical entry point
to over 600 million
people in the ASEAN
Market.
- Natural gateway to
the East-Asian
economies.
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Philippines’ GSP+ Status with EU
Grant of GSP+ Status
to the Philippines
by EU
Benefits
Market
Opportunities
• The European Union (EU) has approved the Philippines’ application for Generalized System of Preference (GSP) Plus status in December 2014 that will provide duty free entry to the EU for some of the most important PH exports.
• GSP+ preferences cover over 6,200 tariff lines including fruit and foodstuffs, coconut oil, footwear, fish and textiles.
• EU Concession significantly improves the attractiveness of the Philippines as a destination for new agricultural and manufacturing facilities for products that will now enjoy duty free access to the EU.
• Expected to increase the PH’s total exports to EU by nearly 12% and create an additional 267,000 jobs.
• Attracts new industrial investments in sectors where relatively high tariffs are being slashed to zero under GSP+.
• These include established Filipino exports that are labour intensive such as pineapple juice, garments, preserved fruits, tuna, fruit jams and jellies and footwear.
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Japan’s Support to the Philippine Industry Development
Japan expressed support to the Philippine initiative to develop an Industrial Development Roadmap and its aspiration to be a hub in ASEAN for manufacturing and human resources development;
Both sides welcomed convening of the Philippines-Japan Industrial Cooperation Dialogue and confirmed to tackle priority issues such as automobile industries, services, SMEs and improvement of the business environment; and
Both sides agreed to develop an Action Plan to Enhance the Bilateral Industrial Cooperation.
Philippines – Japan Joint Statement on Industrial Cooperation
signed on 21 July 2014 wherein:
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Philippines – Japan Bilateral Merchandise Trade
Philippines-Japan Economic Partnership Agreement (PJEPA)
ASEAN-Japan Comprehensive Economic Partnership (AJCEP)
Regional Comprehensive Economic Partnership (RCEP)
(On-going Negotiation)
JAPAN, the country’s only bilateral FTA partner.
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Living / Lifestyle Environment
Democratic Country
Tourism.
“More Fun in the Philippines”
Affordable Luxuries
Second home to expatriates.
Openness to varied cultures.
Widespread global outlook.
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INCENTIVE BOI
(Executive Order No. 226, as amended)
CDC / SBMA
(Republic Act No. 7227 – Bases Conversion Devt Authority
AFAB
(RA 9728)
Income Tax Holiday
(ITH) 4 – 6 years (max of 8 years)
Exempted from all local and national taxes - value-added taxes, franchise taxes, excise and ad valorem taxes)
4 – 8 years
ITH Bonus 3 years provided the firm meets certain
conditions
Special Tax Rate of 5% on Gross Income
Special Tax Rate of 5% on Gross Income Special Tax Rate of 5% on Gross
Income after ITH period
Importation of Capital Equipment, Spare Parts and Supplies
0% duty-free Tax and Duty-Free 0% duty-free
Wharfage Dues and Export Tax, Duty, Impost and Fees
Exempted None Exempted
Simplification of Customs Procedures
Available
Employment of Foreign Nationals
Foreign nationals may be employed in supervisory, technical or advisory positions within 5 years from a project’s registration, extendible for limited periods. The positions of president, general manager, and treasurer or their equivalents, of foreign-owned registered firms may be retained by foreign nationals for a longer period.
All foreign employees may bring with them their spouses and unmarried children under 21 years of age.
Others Domestic sales allowance of up to 30% of total sales;
Competitive Investment Incentives
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Investment Opportunities
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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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Investment Opportunities - Japan
1. Manufacturing
• Motor Vehicles
• Shipbuilding including parts and components
• Aerospace parts and components
• Chemicals (oleo, petro and chlor-alkali)
• Tool and Die
2. Agribusiness and Fishery
3. Services
• IT/BPM and Game Development, Animation
4. PPP Projects
• Infrastructure Development
5. SME Centric Programs
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Philippines – Japan Bilateral Merchandise Trade
Key Exports to Japan
1. Construction
Materials/Construction Related
Products
2. Food Products
3. Lifestyle and Homestyle
4. Health and Wellness Products
5. IT & Creative Services
6. Motor Vehicle Parts
7. Wearables
8. Minerals
9. Coconut Products
10. Chemicals
11. Electronics and Semiconductors
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PH – JP BILATERAL MERCHANDISE TRADE Comparative of 2013 and 2014 (Jan – Sept)
in Billion US$
*Covers Y2013 (January to December)
Philippines – Japan Bilateral Merchandise Trade
PH’s TOP EXPORT TO JAPAN / JAPAN’S IMPORT TO THE PH 2013 and 2014 (Jan – Sept)
Source: DTI-EMB & National Statistics Office
2013 2014 % Share
(2014) (Jan-Sept) (Jan-Sept)
Export 12.0 12.8 22.6
Import 5.2 *not available yet
Total Trade 17.27*
PH’s Export to JP JP’s Import to the PH
• builders' joinery and carpentry of wood, n.e.s.
• Ignition wiring sets and other wiring sets for vehicles, aircraft or
ships
• Photosensitive semiconductor devices, including photovoltaic
cells; light emitting diodes
• Copper ores and concentrates
• Glycerol
• Bananas, including plantains, fresh or dried
• Digital monolithic integrated circuits
• Refrigerated vessels
• Nickel oxide sinters and other intermediate products of nickel
metallurgy
• Other sulfide; polysulfides
• Machine parts and accessories
• Motor vehicles for the transport of ten of more persons,
including the driver
• Motor vehicle parts and components
• Sulphuric acid; oleum
• Parts of the goods and other electrically operated machines
• Electrical apparatus for switching or protecting electrical
circuits, or for making connections to or in electrical circuits
• digital monolithic integrated circuits, n.e.s.
• Flat-rolled products of iron or non-alloy steel, plated or coated
with tin
PH exports to Japan in the
first 11 months of 2014,
valued at US$12.9 billion,
already accounts for
107.5% of full 2013
performance.
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Japanese Investments in the Philippines
Year
(Jan – Sep)
IPA-Approved
Foreign
Investments
% Share Rank
2013 366.34 12.2 3rd
2014 333.95 16.1 1st
IPA-Approved Foreign Investments from Japan Comparative of 2013 and 2014 (January – September)
in Million US$
BSP Average FOREX for US$1.00
2013 (Jan-Sep): 40.0570;
2014 (Jan-Sep): 44.2561
2013
(Jan – Sep)
• US$367.48
2014
(Jan – Sep)
• US$307.14
MANUFACTURING SECTOR -
top recipient of Japan’s
investment pledges in 2013 and
2014.
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Doing Business in the Philippines
The Philippines is a ready market
Global acceptance of the Philippines as an
investment destination
The Philippines is gaining competitiveness
Filipinos are dependable, hardworking,
resilient
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