“OPPORTUNITIES FOR JAPANESE INVESTORS IN PHILIPPINE ECONOMIC ZONES”

A Presentation for the:

PHILIPPINE INVESTMENT SEMINAR

by DR. LILIA B. DE LIMA PEZA Director General and Undersecretary, Department of Trade and Industry

Fuji Room, 3/F, Imperial Hotel, Tokyo, 2:30 PM, March 30, 2015 Philippine Economic Zone Authority (PEZA)

• Attached to the Department of Trade and Industry • Promotes Investments • Creates Employment • Generates Exports 317 Economic Zones Nationwide

68 Industrial and Export Processing Zones

43 IT Parks

166 IT Centers

19 Tourism Ecozones

2 Medical Tourism Parks

19 Agro-Industrial Parks As of Jan 2015 LOCATOR INVESTMENTS BY NATIONALITY ( 1995 – 2014 )

22.78 % Filipino 15.87 % American 29.71 % 10.29 % Dutch Japanese 7.98 % British 3.39 % Korean 3.07 % Singaporean 1.60 % German 0.96 % Swiss 4.35 % Others LOCATOR INVESTMENTS BY PRODUCT SECTOR ( 1995 – 2014 )

9.78 % Information Technology Services 9.29 % Metals/Fabricated Metal Products 8.94 % Tourism 6.00 % Transport (Shipbuilding, 37.45 % Parts, Equipment) / 4.58 % Electrical Machinery Semiconductors and Apparatus 2.43 % Medical, Precision and Optical Instruments 1.31 % Medical Tourism 1.43 % Rubber and Plastic Products 18.79 % Other Manufactures WHY PHILIPPINES PHILIPPINE STRENGTHS

6.1% GDP Growth, 2nd Highest in Asia in 2014

100 Million Population as of July 27, 2014 PHILIPPINE STRENGTHS Investment Grade Credit Rating The Filipino Work Force

• High literacy rate of 94.6% • English speaking The Filipino Work Force

• Easy to train

• Hardworking The Filipino Work Force • Very friendly In the I.T. Sector Filipino Workers are considered Global Knowledge Workers because they are intelligent and able to compete at the highest levels among the best in the world. The Filipino Work Force 1 million Filipinos reach working age every year, and half of them are college graduates. Foreign Investor-Friendly Policies

• Basic rights of Investors are guaranteed:  Right to remit profits  Right to pay foreign obligations  Right to repatriate investments • 100% Foreign ownership of companies STRATEGIC LOCATION

Russia Canada

United Germany Kingdom EUROPE United States France of America China Korea Japan Middle Taiwan East Atlantic Ocean Hong Kong Philippines Africa India Thailand Malaysia Singapore Pacific Ocean South Indonesia America

Australia New Zealand HOSPITABLE and COMFORTABLE SECOND HOME Very friendly attitude of Filipinos

(Result of a survey conducted on expatriates in Asia) Housing at very reasonable rates

(Result of a survey conducted on expatriates in Asia) International schools for expatriates' children

(Result of a survey conducted on expatriates in Asia) Best sporting and recreational facilities

(Result of a survey conducted on expatriates in Asia) World class health services

(Result of a survey conducted on expatriates in Asia) WHY PEZA Incentives

1. Income Tax Holiday (ITH)  6 to 8 years for pioneer project  4 to 6 years for non-pioneer project 2. After the ITH - Special 5% tax on gross income less allowable deductions in lieu of all and local taxes Incentives

3. Tax and duty free importation of capital equipment, spare parts, supplies and raw materials 4. Domestic sales allowance of up to 30% of total sales Incentives

5. Zero Value Added Tax (VAT) Rate on all local purchases to include telecommunications, power and water bills 6. Exemption from payment of local government taxes and fees Incentives

7. Employment of foreign nationals 8. Special visa for foreign investors and immediate family members 9. Unequalled service by PEZA THE PEZA BRAND OF SERVICE 1. PEZA is a One-Stop Shop

 Building and Occupancy Permits  Import and Export Permits  Online Import and Export Procedures and E-Payment System  Special multiple-entry non-immigrant Visa  Environment Clearance Certificate

 Exemption from Local Government Permits and Fees  Simplified registration process – forms can be downloaded from website 2. PEZA is a Non-Stop Shop

• Provides 24 hours a day, 7 days a week of continuous service • The Director General and other top officials are on call 24 hours a day, 7 days a week 3. In PEZA, there is

NO RED TAPE 3. In PEZA, there is

ONLY RED CARPET TREATMENT 4. In PEZA, there is

NO GRAFT NO CORRUPTION PEZA is ISO 9001:2008 Certified

For all processes, at all levels, in all offices, nationwide. IFC – World Bank cited only PEZA for Best Practice among Economic Zones worldwide

“Under PEZA, the Philippines has shown dramatic improvements in Investment Climate.

End Result – PEZA is a shining example of successful regulatory reform improving overall investment climate in the country.” Reformist Government

Under President Aquino’s “Daang Matuwid” (Straight Path) Policy:  Good Governance  Transparency  No Corruption Appreciation of Investment Environments (December 2014)

JETRO 2014 Survey of Japanese-Affiliated Firms in Asia and Oceana Less Linguistic/Communication Problems (%)

Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO Easy to hire local staff (General worker/staff/clerk) (%)

Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO High Quality of Employees (General worker) (%)

Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO High Employee Retention Rates (%)

Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO Tax Incentives (Corporate Tax Holidays etc.) (%)

Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO Number of Strikes/Lockouts

(Unit: Number)

Country 2010 2011 2012 2013

China 90 185 382 656

Indonesia 192 196 51 239

Philippines 8 2 2 1

Thailand 3 14 12 11

Vietnam 423 981 468 327

Source China: China Labour Bulletin Indonesia: Ministry of Manpower and Transmigration Philippines: National Conciliation and Mediation Board Thailand: Department of Labour Protection and Welfare Vietnam: Vietnam General Confederation of Labor TOP CHIPMAKER

8 OUT OF THE WORLD’S TOP 20 CHIPMAKERS ARE OPERATING IN THE PHILIPPINES

TIPI Philips Fairchild Samsung

Analog On Semi

Source: SEIPI TOP HDD PRODUCER

FOUR OF THE LARGEST HDD PRODUCERS IN THE WORLD ARE IN THE PHILIPPINES

Hitachi NEC

Source: SEIPI THE WORLD’S TOP ELECTRONICS FIRMS

. CEBU MITSUMI –manufactures computer peripherals and components such as CD-R, CD-RW, optical pick up

. AMKOR – manufactures IC packaging with 400 formats, from leadframe to BGA solutions

. – one of the top 3 terminal printer production base of global Epson group, producing its 10 millionth printer

. LEXMARK – produces 40 million printheads/year

. CONTINENTAL – produces ABS, sensors

. SUNPOWER – produces solar panels Source: SEIPI WITH HOMEGROWN SMS & EMS FIRMS

IMI Ionics PSI Fastech Team

… and a cluster of homegrown ODMs time recorder, AVR, power supplies, alarm systems, electronic ballasts, testers, GPS tracking, automated toll collection, others

Notes: SMS – Semiconductor Manufacturing Services EMS – Electronics Manufacturing Services ODM – Original Design Manufacturing AVR – Automatic Voltage Regulator GPS – Global Positioning System Source: SEIPI Top Economic Zone Investors

TI (Philippines), Inc. Electronics American/Dutch Taganito HPal Nickel Corp. Basic Metals Japanese Toshiba Information Electronics Japanese Tiger Resort Tourism American/Japan Sunpower Philippines Solar Cells American/Cayman Travellers International Tourism Filipino Philippines Electronics Japanese Coral Bay Nickel Corp. Basic Metals Japanese Amkor Technology Electronics Singapore/US NXP Semiconductors Electronics Dutch Canon Business Machines Electronics Japanese Top Economic Zone Investors

MCE Leisure Corporation Tourism British Virgin Isl. Epson Precision Electronics Japanese PASAR Basic Metals Filipino Rohm Electronics Electronics Singapore/Jap HGST Philippines Electronics Dutch/Japanese Samsung Electro-Mech Electronics Korean Autoparts Automotive Japanese St. Luke’s Medical Center Medical Tourism Filipino Tsuneishi Heavy Ind Shipbuilding Japanese STMicroelectronics, Inc. Electronics Swiss Integrated Micro Electronics British Top Economic Zone Investors

Convergys IT American Precision Electronics Dutch/Japanese Sureste Properties Tourism Filipino American Power Electrical Mach American TDK Philippines Electronics Japanese Electronics Japanese Lufthansa Technik Air Transport German Pilipinas Kao, Inc. Chemical Products Japanese Terumo Phil Medical Instrm’t Japanese Philippines Electronics Japanese Continental Temic Electronics German Top Economic Zone Investors

Atlantic Gulf & Pacific Fabricated Metal Filipino On Semiconductor Phils. Electronics American Accenture, Inc. IT Dutch Analog Devices Electronics Dutch Green Future Innovations Agro-Industrial Japanese JP Morgan Chase Bank IT American Teletech IT American Electronics Japanese Schweitzer-Maudit Agro American Xerox Business Services IT Dutch Convergys Phils. Inc. IT Dutch House Technology Electronics Singaporean/Japanese PEZA

845 Japanese Locator Enterprises are operating in PEZA Economic Zones (as of Jan 2015) TOP JAPANESE ELECTRONICS AND SEMICON COMPANIES IN PEZA ECONOMIC ZONES

Toshiba Information Equipment (Philippines), Inc. Ibiden Philippines Inc. Canon Business Machines Philippines, Inc. Epson Precision (Philippines), Inc. Rohm Electronics Philippines, Inc. Taiyo Yuden (Philippines), Inc. Nidec Philippines Corporation TDK Philippines Corporation (Formerly: TDK Fujitsu Philippines Corp.) Nidec Precision Philippines Corporation JX Nippon Mining & Metals Philippines, Inc. Philippines, Inc. Cebu Mitsumi, Inc. Philippine Manufacturing Co. of Murata, Inc. of the Philippines First Sumiden Circuits, Inc. San Technology, Inc. Nidec Precision Philippines Corporation Rohm Mecatech Philippines, Inc. TOP JAPANESE AUTOPARTS COMPANIES IN PEZA ECONOMIC ZONES

Toyota Autoparts Philippines, Inc. Yamaha Motor Philippines, Inc. Parts Manufacturing Corporation Mitsuba Philippines Corporation Laguna Auto-Parts Manufacturing Corporation Daiwa Philippines, Corporation Philippine Iino Corporation F-Tech Philippines Manufacturing, Inc. EDS Manufacturing, Inc. Ryonan Electric Philippines Corporation Yutaka Manufacturing (Philippines), Inc. Imasen Philippine Mfg. Corporation Mahle Filter Systems Philippines Corporation Toyo Seat Philippines Corp TOP JAPANESE FABRICATED METALS COMPANIES IN PEZA ECONOMIC ZONES

Yazaki-Torres Parts Manufacturing, Inc. -Torres Manufacturing, Inc. MSM Cebu, Inc. Enomoto Philippine Manufacturing, Inc. Karumona Nagano Seiko, Inc. Aikawa Philippines, Inc. Sanno Philippines Manufacturing Corp. CQS Stainless Corporation EXAS Philippines, Inc. Aichi Forging Company of Asia, Inc. Kedica Philippines Corporation Makoto Metal Technology, Inc. K&A Metal Industries, Inc. Sohbi Kohgei (Philippines), Inc. TOP JAPANESE RUBBER & PLASTIC COMPANIES IN PEZA ECONOMIC ZONES

Diversified Plastic Film Systems, Inc. NKC Manufacturing Philippines Corporation K&K Molding Inc. Bigmate Philippines, Inc. Tamiya (Philippines), Inc. Nanbu Philippines, Inc. Daitoh Precisions, Inc. Philippines TRC, Inc. Miyasaka Polymer (Philippines), Inc. Ohtsuka Poly-tech (Philippines), Inc. Taiyo Plastic Corporation of the Philippines Philippines Corporation Matex International, Inc. J-Film Philippines, Inc. Mitsuboshi Philippines Corporation JAPANESE CHEMICAL PRODUCTS COMPANIES IN PEZA ECONOMIC ZONES Pilipinas Kao, Inc. Sakamoto Orient Chemicals Corporation Tosoh Polyvin Corporation East Stacker Philippines Corp Surtec Philippines Corporation JAPANESE FOOD PRODUCTS COMPANY IN PEZA ECONOMIC ZONES Manila Refining Corporation (Formerly: Minola Refining Corporation) JAPANESE BASIC METALS COMPANIES IN PEZA ECONOMIC ZONES Taganito HPAL Nickel Corporation Coral Bay Nickel Corporation Umicore Specialty Chemicals Subic, Inc. Nippon Super Precision Philippines Corporation JAPANESE I.T. COMPANIES

SOFTWARE DEVELOPMENT, DESIGN, APPLICATION & SERVICES NEC Telecom Software Philippines, Inc. (Cebu) Advanced World Solutions, Inc. Document Solutions Development Philippines, Inc. ROA Systems Co., Ltd. Manila Branch Allied Telesis Labs (Philippines), Inc IT-Tera Phils. Inc. I-Bridge Systems Philippines Inc. J-Sys Philippines, Inc. Techno Philippines, Inc. Canon Information Technologies Philippines, Inc JPMED Asian Pacific, Inc. Bizsolution Corp. Gulliver Integrated Outsourcing Inc. Ubiquitous Technologies Philippines, Inc. Amca Smart Solutions Inc. OMED Corporation TCI Solutions Delivery Phils., Inc. JAPANESE I.T. COMPANIES ENGINEERING, ARCHITECTURAL & OTHER DESIGN SERVICES

Meinan Philippines, Inc. Dash Engineering Philippines, Inc. Kyocera Circuit Design Phils., Inc. Linearworks Corporation Tsuneishi Technical Services (Phils.), Inc. Mektec (Philippines) Corporation 3D Auto Designs (Phils.), Inc. Furukawa Automotive Systems Design Philippines Inc. NKC Conveyors Philippines Corporation MDS Circuit Technology, Inc. T & S Global Solutions, Inc. JFE Techno Manila, Inc. Super Flex Logistics, Inc. TSG Taisho, Inc. KKS A & I International Co., Inc. NDE Digi-Tech, Inc. For Fellas Philippines, Inc. Planex Technology, Inc. JAPANESE I.T. COMPANIES

CALL CENTER Frontier Call Center, Inc. SBT Philippines, Inc. Hampstead Offshore Development Marketing Inc.

IT RESEARCH AND DEVELOPMENT Netplans Inc. Trend Micro Incorporated (Philippine Branch) Rohm LSI Design Philippines, Inc.

MULTI-MEDIA GRAPHICS, ANIMATION Toei Animation Phils., Inc. Very International Inc. JAPANESE I.T. COMPANIES

DATA ENCODING, TRANSCRIBING AND RELATED SERVICES CCK City Network, Inc. Insightech Global Consulting Inc. Inforesta Philippines, Inc.

OTHER IT-ENABLED SERVICES Tsukiden Global Solutions Inc. Line Seiki Philippines, Inc. Unhoop Philippines, Inc. Langrich-on: Language Proficiency Inc. Excel English Services International, Inc. JAPANESE SUPPORT INDUSTRIES

SOME JAPANESE SUPPORT INDUSTRY

Manufacture of Various Parts for Computers / Electronic/Semiconductor Products:

Yumex Philippines Corporation SHI Manufacturing & Services (Philippines), Inc. Philippines, Mfg., Inc. Merasenko Corporation Kanepackage Philippine, Inc. MKP, INC. Precise Techno, Inc. Air Water Philippines, Inc. Gotoh Philippines Corporation Ina Micro Opto Corporation Matluster Corporation Sanritsu Great International Corporation SOME JAPANESE SUPPORT INDUSTRY

Manufacture of various parts and components for automotive and motorbike:

Mitsuba Philippines Corporation Fujitsu Ten Corp. of the Philippines TRP Inc. Philippine HKR, Inc. Meinan Philippines, Inc. Masuda Philippines,Inc. JECO Autoparts Phils Gunma Gohkin Philippines Corporation TS Tech Trim Philippines, Inc. Shoshiba Filipina Industria, Inc. Ito Manufacturing (Philippines), Corporation KGK Gasket Philippines, Corporation Autoliv Cebu Safety Manufacturing, Inc. (formerly: Autoliv Izumi Philippines, Inc.) SOME JAPANESE SUPPORT INDUSTRY

Manufacture of molds, dies, industrial plastic/ plastic injected parts and various rubber products:

Fuji Industries Manila Corporation Leadence Philippines Corporation Laguna Saikai Corporation Toyo-Ink Compounds Corporation JP Latex Technology, Inc. Sunmec Corporation Iship Logipack Incorporated F.R.P. Philippines Corporation Atmak Corporation Global Moulding Technology, Inc. Showa Polymer Process Corporation Toms Manufacturing Corporation ZPI Philippines, Inc. SOME JAPANESE SUPPORT INDUSTRY

Manufacture of Packaging Materials/Specialized Packaging/ Pallets/Casing:

Adamay International Co., Inc. Chang Chuen Cotton Paper Mfg. Co. Super Flex Logistics, Inc. SHIPBUILDERS AND RELATED COMPANIES IN PEZA SHIPBUILDERS AND BOAT MANUFACTURERS

Tsuneishi Heavy Ind (Cebu) Bulk Carriers Japanese Asian Craft (Cebu), Inc Aluminum Boats Japanese

BUSINESS SUPPORT CENTER IN THE PHILIPPINES

1. Promote investments from Japan to the Philippines; 2. Strengthen industrial and economic relations between Japan and the Philippines; 3. Offers complimentary offices and advisory services to Japanese SME companies interested in making direct investments or outsourcing in the Philippines; 4. Functions as a one-stop center for Japanese businessmen in the Philippines by providing relevant investment information through close coordination with relevant Philippine government agencies such as the Philippine Economic Zone Authority and other Philippine government agencies. AWAITING YOUR INVESTMENTS !