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Doing Business in the Philippines

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Doing Business in the Philippines Doing Business in the Philippines International Investments Promotion Service Board of Investments As of April 2021 THE PHILIPPINE BOARD OF INVESTMENTS Your Window to Infinite Opportunities in the Philippines Due diligence assistance • Information support • Visit program development & investment briefing • Business matching Business registration facilitation • Networking with IPUs and other government agencies on pre-operational business requirements • Fast tracking with registration procedures • Assistance with local government requirements Aftercare service • Presence of government network to quickly respond to concerns • Regular supervision & monitoring 1. Demographic Sweet Sport and Rich Talent Pool 2. Competitive Salary and Steady Wage Increase THE PHILIPPINE 3. Low Labor Attrition/Turnover Rates 4. Industrial Peace ADVANTAGE 5. Access to Key Markets 6. Predictable Trading Environment 7. Unrestricted Movement of Critical Products and People Filipinos are younger compared PH in Demographic Sweet Spot to the rest of the world The median age in the Philippines is 25.7 and Rich Talent Pool years old. This is equivalent to the age of someone who recently graduated from college. 110M Population Japan 48.4 We produced over 790,000 college EU-28 42.5 graduates in AY 2018-2019 across Thailand 40.1 a wide range of disciplines including engineering an technology China 38.4 Our workforce is: USA 38.3 • Highly educated and English Proficient Australia 37.9 • Strongly customer-oriented • Multi-skilled UAE 32.6 • Highly trainable with fast learning curve Vietnam 32.5 • Adaptable to universal cultures • High level of commitment and loyalty Philippines 25.7 Sources: UNDP, CHED, Country Sources SECTION 2 / THE PHILIPPINE ADVANTAGE / 1. Demographic Sweet Spot and Rich Talent Pool Competitive Salary & Steady Wage Increase Monthly Base Salary (in US$) 867 851 840 2018 2019 2020 798 791 728 512 511 480 469 447 439 446 432 431 413 413 414 409 381 360 352 348 296 272 250 236 236 227 220 MY TH ID VN PH MY TH ID VN PH MY TH ID VN PH YoY Wage Increase Rate (%) Engineer Worker 10 5 0 2017-2018 2018-2019 2019-2020 2020-2021 (f) Thailand Malaysia Indonesia Philippines Vietnam SECTION 2 / THE PHILIPPINE ADVANTAGE / 2. Competitive Salary and Steady Wage Increase Source: JETRO Surveys Labor Attrition/Turnover Rates 2020 PH VN TH ID MY KH SG 1.9% 24% 12.8% 7% 6.5% 6.2% 1.6% Sources: Philippines: Philippine Statistics Authority (4th Quarter of 2019) Vietnam: Viet Nam News (24% = Labor Attrition Rate in VN as of October 2019) Thailand: Bangkok Post (12.8 = total voluntary turnover rate in TH, 2019) Indonesia: Mercer (7% = total voluntary attrition rate in ID, 2019) Malaysia: Mercer (6.5 = total voluntary attrition rate in MY for Semester 1, 2019) Cambodia: National Employment Agency of Cambodia (6.2% = expected turnover of KH; as of May 2018) Singapore: Ministry of Manpower (1.6% = total value of resignation and recruitment rate in SG; as of Q3 of 2020) SECTION 2 / THE PHILIPPINE ADVANTAGE / 3. Low Attrition/Turnover Rates Number of Strikes/Lockouts Country 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 CHINA 185 382 656 1379 2,775 2,664 1,257 1,704 1,385 800 no no no INDONESIA 196 51 239 233 available 206 284 187 available available data data data PHILIPPINES 2 2 1 2 5 15 15 14 18 11 no no no no no THAILAND 14 12 11 8 6 available available available available available data data data data data no no no no no no VIETNAM 981 468 327 available 626 available available available available available data data data data data data Sources: China: China Labour Bulletin (Strikes Map, from January to December 2020) Indonesia: Ministry of Manpower and Transmigration; Police Headquarters of the Republic of Indonesia (MABES POLRI) – provided by PTIC-Jakarta Philippines: National Conciliation and Mediation Board, PEZA, Philippine Statistics Authority and DOLE (No. of Actual Strikes/Lockouts as of Sept. 2020) Thailand: Department of Labour Protection and Welfare Vietnam: Vietnam General Confederation of Labor SECTION 2 / THE PHILIPPINE ADVANTAGE / 4. Industrial Peace Strategic Access to Key Markets EU Duty-free access for 6,274 tariff lines under GSP+ Program PH is the only ASEAN country with GSP+ US – 70% of PH Exports enter the US duty-free (GSP & MFN) SECTION 2 / THE PHILIPPINE ADVANTAGE / 5. Access to Key Markets Strategic Access to Key Markets 29.7% of the world’s population Regional Comprehensive Economic Partnership: A Seamless Production Network 28.2% of the global GDP $25.84 T RCEP 27.8% of the world’s trade $24.37 T SECTION 2 / THE PHILIPPINE ADVANTAGE / 3. Access to Key Markets 23.6% of global inward FDI US-Mexico- Canada Agreement 33.5% of global outward FDI $18.85 T European PH’s tariff commitment stands at Economic 98.1% on average Area Source: JETRO Survey SECTION 2 / THE PHILIPPINE ADVANTAGE / 5. Access to Key Markets “Last Touch” Trade Strategy’s 2 Pillars 1. REGIONAL PRODUCTION 2. ACCESS TO MARKETS Final PH has the best access to major markets value- outside of the Regional Value Chain adding PH’ seamless integration in US: Generalized System of Regional Value Chain will favor Preferences (GSP), possible FTA production networks country EU: GSP+ with best Regional Comprehensive European Free Trade Association Economic Partnership access to (EFTA), UK (post-Brexit) (RCEP) outside JECs the Region SECTION 2 / THE PHILIPPINE ADVANTAGE / 5. Access to Key Markets Predictable Trading Environment Measures Affecting Selected ASEAN Member States 36 Vietnam 425 The Philippines is less affected 29 Thailand 733 by the increasing number of trade 0 Philippines 145 measures being imposed Malaysia 34 compared to 607 other ASEAN 49 Member States. Indonesia 684 0 100 200 300 400 500 600 700 800 Oct 2019 - May 2020 Since 2008 SECTION 2 / THE PHILIPPINE ADVANTAGE / 5. Predictable Trading Environment Source: WTO Trade Monitoring Database Unrestricted Import/Export of Critical Products As most countries adopted temporary export restrictions on certain categories of critical medical supplies in response to COVID-19 NO export restrictions on critical products during the pandemic period in the PHILIPPINES In terms of imports, under the BAYANIHAN ACT • Exemption from duties, taxes, and fees on importation of health equipment and supplies deemed critical or needed to address the COVID-19 • Streamlined import requirements, application and registration process of needed medical supplies, equipment and protective equipment as COVID-19-critical commodities SECTION 2 / THE PHILIPPINE ADVANTAGE / 6. Unrestricted Movement of Critical Products and People Availability of Suitable Locations As of December 2020 Capas Property Hermosa Ecozone Industrial Park Capas, Tarlac Hermosa, Bataan • Area: 300,449 sqm (semi-developed) • Area: 221,723 sqm TECO Industrial Park Mabalacat, Pampanga Freeport Area of Bataan • Area: 903,168 sqm Mariveles, Bataan • Two (2) 1,584 SFBs • Area: 10,800 sqm Laguna Technopark Biñan, Laguna CENTRAL LUZONCENTRAL Cavite Economic Zones 1 & 2 Rosario & Noveleta, Cavite • Area: 154,700 sqm (Phase 1); 221,000 sqm (Phase 2) • Area: 3,470,000 sqm Lima Technology Center First Philippine Industrial Park Lipa/Malvar, Batangas Sto. Tomas, Batangas • Area: 31,880 sqm (resale); 17,000 • Area: 150,000 sqm (expansion); 14,683 sqm (on-going • Building (SFB) Area: 25,000 sqm construction) First Industrial Township Light Industry & Science Park IV Sto. Tomas, Batangas Malvar, Batangas CALABARZON • Area: 180,000 sqm • Area: 12,000 sqm SECTION 2 / THE PHILIPPINE ADVANTAGE / 7. Availability of Suitable Locations INVESTMENT 1. 2020 Investment Priorities Plan 2. Sectoral Highlights: Capabilities and OPPORTUNITIES Opportunities 2020 Investment Priorities Plan A. Preferred Activities 1. ALL QUALIFIED ACTIVITIES RELATING TO THE FIGHT AGAINST 6. HEALTHCARE SERVICES INCLUDING DRUG THE COVID-19 PANDEMIC (Essential goods and service) REHABILITATION CENTERS 2. INVESTMENTS IN ACTIVITIES SUPPORTIVE OF PROGRAMS TO 7. MASS HOUSING GENERATE OPPORTUNITIES OUTSIDE OF CONGESTED URBAN AREAS 8. INFRASTRUCTURE & LOGISTICS INCLUDING LGU-PPPs 3. ALL QUALIFIED MANUFACTURING ACTIVITIES INCLUDING AGRO- PROCESSING 9. INNOVATION DRIVERS 10.INCLUSIVE BUSINESS MODELS 4. AGRICULTURE, FISHERY AND FORESTRY 11.ENVIRONMENT OR CLIMATE CHANGE- 5. STRATEGIC SERVICES RELATED PROJECTS a. IC Design 12.ENERGY b. Creative Industries/Knowledge-Based Services c. Maintenance, Repair, and Overhaul (MRO) of aircraft d. Charging/Refueling Stations for Alternative Energy Vehicles e. Industrial Waste Treatment f. Telecommunications g. State-of-the-art Engineering, Procurement and Construction SECTION 3 / GOVERNMENT SUPPORT/ 1. 2020 Investment Priorities Plan 2020 Investment Priorities Plan B. Export Activities . Manufacture of export products . Services exports . Activities in support of exporters C. Special Laws . Industrial Tree Plantation (PD 705) . Mining (RA 7942) (limited to capital equipment incentive) . Publication or Printing of Books/Textbooks (RA 8047) . Refining, Storage, Marketing and Distribution of Petroleum Products (RA 8479) . Rehabilitation, Self-Development and Self-Reliance of Persons with Disability (RA 7277) . Renewable Energy (RA 9513) . Tourism (RA 9593) . Energy Efficiency and Conservation (RA 11285) SECTION 3 / GOVERNMENT SUPPORT/ 1. 2020 Investment Priorities Plan Philippines as a Hub for Manufacturing and Product Design MANUFACTURING PRODUCT DESIGN • Presence of Support Industries for • Philippine Institute for Integrated Circuit Manufacturing • Presence for Support Industries for Research •Department
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