Updated 2013 Presentation

7/28/2019 Updated 2013 Presentation

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Phili!ine


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ABUSINESSANDINVESTMENTENVIRONMENTINTRODUCTIONPhili!ine


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TextText

(1) Strong Stock Market

Business Climate


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(2) Stable and Resilient Economic Growth

Business Climate


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Business Climate(4) Steady Investment Flows


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Business Climate

(5) Robust Domestic Financial Sector Coupled with

Credit Growth


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Business Climate

(6) Efficient Revenue Collection


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Business Climate

(7) Improving Global Competitiveness Ranking


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Business Climate

(8) Strengthened Governance & Anti-Corruption Measures


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Business Climate(9) Dynamic People


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GETTING THE WORLDS

ATTENTION


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Recent Developments: RATINGS UPGRADE

Fitch Ratings upgrades to BBB- (Investment Grade)!Standard & Poor upgrades to BBB- (Investment Grade)!Japan Credit Rating Agency Ltd. upgrades to BBB-

(Investment Grade)!


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Recent Developments:

GROWTH FORECAST UPGRADE

International Monetary Fund upgrades PH growth forecast!Barclays upgrades PH growth forecast from 5.9 to 6.3% (May, 2013)!UBS Investment Bank upgrades growth forecast to 6.3% (April, 2013)!UN Economic and Social Commission for Asia and the Pacific

upgrades growth forecast from 5 to 6.2% !First Metro Investment Group forecasts 7.5% economic growth from

the Philippines!According to National Economic and Development Authority (NEDA),

Philippine economy outpaced growth of other Southeast Asian countries.!


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Recent Developments:IMPROVED INVESTOR CONFIDENCE

Philippines is Asias rising tiger according to World Bank!Philippines from International Monetary Fund borrower to lender!Philippine Governments initiatives to encourage investors (May, 2013)!

! -Securities and Exchange Commission lifts 40% cap on foreignownership!

-Reduced debt from 68% of GDP in 2003 to 41% in 2012!Goldman Sachs identifies Philippines as successor to BRICS


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64.1% labor force participation rate(2013) with 92% employment rate

95.4% Literacy rate --one of thehighest literacy rates in the world(ADB, 2008)

70% fluency in English

500,000 college graduates per year

(100,000 IT / ComputerScience Graduates, 111,000Business Graduates and73,000 Medical & Allied/Natural Sciences Graduates)

Fluent in English The Philippines isthe worlds third largest englishspeaking nation.

Exported and highly sought worldwide PHILIPPINES: WINNEROFFSHORING DESTINATIONOF THE YEAR 2010, 2009 AND

2007

WorldClassHumanResource


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EXTENSIVE INFRASTRUCTURE EXPANSION & SUPPORT

9 International Airports

20 Domestic Airports

3 Railway lines in Metro Manila

12 Roll on/Roll off ports/ marine highways

Newly constructed (major) expressways

ESTABLISHED TELECOMMUNICATIONS SYSTEMS ANDNETWORKS

completely deregulated

International connectivity and expanding multimedia Infrastructure

high volume capacity for voice

EstablishedInfrastructure&TelecommunicationsNetworks


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StrategicLocation The Philippines borders Asia Mainland and the PacificOcean.

Convenient Access to the 550 Million-strong ASEANMarket

Reachable within 4 hours by plane from other keyAsian Cities

Regional Hubs in neighbouring ports and countriessuch as Singapore, Hongkong and Tokyo providenumerous travel options.

Flying Times from key Asian cities:______________________________

Tokyo - 4 hours

Seoul - 3.5 hours

Shanghai - 3.25 hours

Singapore - 3 hours

Hongkong - 2 hours


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UnmatchedGovernmentIncentives&Support

4 to 6 years Income Tax Holiday

Special 5% tax rate on gross income afterthe lapse of the Income Tax Holiday forEconomic and Special Zone locators

Tax and duty exemption and Zero Duty onqualified imported capital equipment

Exemption from 12% V.A.T on allowablelocal purchase of goods and services

Unrestricted use of consigned equipment

Employment of foreign nationals

Working Visas, Special Investors ResidentVisas, Retirees Visas

Manufacturing 63

IT Parks 127

Tourism 9

Medical Tourism Parks/ Centers 2

Agro Industrial Centers 6


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Invetment O!o#unitie


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PrioritySectors:InvestmentPrioritiesPlan2012 Agriculture/ Agri-

business and Fishery

Creative Industries/Knowledge-BasedServices

Shipbuilding

Mass Housing

Iron and Steel

Energy/ RenewableEnergy

Infrastructure

Research and Development

Green Projects

Motor Vehicles

Tourism Investments

Strategic Projects

Hospital /Medical Services

Disaster Prevention,Mitigation and RecoveryProjects


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ITEnabled&BusinessSupportServices

7

Leading the Outsourcing Evolution

Established leader for voice services 30% share of U.S. and 15-20% of APAC

$5.70 billion revenues in 2010, higher thanIndias projected $5.58 billion

VOICE

Credible 10% share that is rapidly growing

Large industry-specific opportunity (e.g.

BFSI, healthcare, media, HR, KPO Evolving value-propositions - tools, processimprovement, end-to-end accountability

Non-voice

Highly penetrated applications market

Emerging opportunities to penetrateASEAN, innovate for the U.S.

Third largest pool of engineers after Indiaand China in APAC

IT/ESO

Source: Everest analysis

Philippine IT-BPO industry size20062009; US$ billion

3.2

4.8

6.1

7.1

8.9

11.0

2006 2007 2008 2009 2010 2011

# FTEs(~000)

240 300 370 440 530

Globalshare1

5% 6% 6% 7% 8%

FTEs = full-time employees, YoY = year on year

1 Philippines IT-BPO market as percentage of global offshore

services market, in revenue terms

Sources: BPAP; Everest analysis

~50% ~26% ~16% ~25%

Courtesy of the Business Processing Association of the Philippines

~24%

638

8%


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IT-Enabled&BusinessSupportServicesDiversification of the Industry

10Proprietary & Confidential. 2010. Everest Global and Outsource2Philippines.

Philippine IT-BPO service segmentsUS$ billion

Philippine IT-BPO source marketsUS$ billion

Note: 2006 Split per ICT Survey of IT and ITES; 2010 estimates from Everest-O2P surveySources: BPAP; Everest-O2P survey

Voice BPO

Non VoiceBPO

IT/ESO

3.2 8.9100% =

U.S.

UK/EU

APAC

3.2 8.9100% =

Domestic

& bl


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Energy&Renewables

Bio-Fuels (Bio-Diesel & Bio-Ethanol) - The governmenttargets to implement a 1% CME blend with diesel fuel for vehicles in

2007, to reach 2% in 2009; and 5% ethanol blend with gasoline fuelfor vehicles within 2007-2009, to reach 10% in 2011.

Hydropower - Indicative Hydropower potentials are currently at2,400 MW

Geothermal - The Philippines is 2nd only to the US in terms ofGeothermal Energy potential reserves. With only 1,931 MW installed

out of 2,047 MW proven geothermal reserves and 4,790 MWpotential reserves, there are obviously plenty of opportunities forexpansion and private sector involvement.

Wind Energy - Comprised of 7,107 Islands, the Philippines hasmaximum potential for wind energy generation. 16 wind power siteswere offered to private investors during the 1st wind contractinground with a potential capacity of 345 MW.

Solar Energy - Opportunities abound in Micro and Small-sizedSolar Energy Plants from 1MW-5W.

Compressed Natural Gas - Minimum investment requirementsof about $4.0B between 2006 2014

*Feed-In Tariff Rates make Renewable Energy Generation now more attractive for

investors


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ResourceExtraction&SustainableMining

Located in the Ring of Fire

5th most mineralized country in theworld (2nd in Gold, 4th in Copper, 5thin Nickel, 6th in Chromite)

Established reserves of 13 knownmetallic and 29 non- metallic minerals(Mines & Geosciences Bureau)

RP has 9 million hectares ofmineralized land

Only 420,000 hectares have miningpermits. 8.6 million hectares still

awaiting for the right investments.


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Public-PrivatePartnershipA Social Contract with the

Filipino People

All transactions are transparent& above board

Consultative view on privatesector areas of concern

Protection of public interest

Private Sector, an importantrole in nation-building

Indispensable roleprivatesector as partner indevelopment


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Public-Private Partnership: EligibleProjects


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TourismInvestments

*Tieza Law - provides incentives that facilitate investments


30/36O$ K S t l i


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Electronics

Agro-Based

49%Garments - 7%

Other

ManufacturedProducts 10%

Forest Products - 10%

Others - 2%

Garments and Textiles - 6%

Machinery and Transport - 4.4%

Wearables - 0.16%

Food - 2.9%

Motor Vehicles and Parts - 1.74%

Home Furnishings - 1%

Marine Products - 1%

Giftwares - 0.45%

Construction Materials - 0.49%

Organic Products - 0.18%

Mineral Products - 2.1%

Others - 13%

FROM COCONUTCOCONUT CHIPSCHIPS

TO MICROCHIPS

Mineral Products -18%

ELECTRONICSELECTRONICS -- 3%3%

19701970

ELECTRONICSELECTRONICS --

61%61%

20102010

Electronics make up 61% of Total Philippine Merchandise Exports

Electronics exports was at US$6.75 Billion in 2011, an increase of5.55% from previous years US$6.40 Billion

Economy less dependent on Electronics Exports

2011: Electronics exports decreased by 23.7% due to Global Down-turn, but overall decrease in exports was only 6.9% at US$47.8Billion.


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FOUR OF THE LARGEST HDD PRODUCERS ARE IN THE

PHILIPPINES

Hitachi Toshiba Fujitsu NEC

CEBU MITSUMI employs >20K, biggest employerin the Philippines; manufactures computer

peripherals and components such as CD-R,CD-RW, optical pick up

7 OUT OF THE WORLDS TOP 20 CHIPMAKERS ARE

OPERATING IN THE PHILIPPINES

TIPI Philips Fairchild

Analog Sanyo On Semi Rohm

WHO ARE WITH US

IN ELECTRONICS?

P fil f El t i Fi


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ProfileofElectronicsFirmsNUMBER OF FIRMS: 936

NATIONALITY:

- 72% Foreign-

Others8%

Japan

30%

Philippines

28%

Malaysia

2%Singapore

2%

Taiwan

4%

Europe

7%

USA

9%

Korea

10%


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Ship-Building

Shipbuilding-Shipbuilding(design,construction,outfitting&launchinganytypeofship).Shipbuildinggiants,JapaneseTsuneishiandKoreanHanjinaresuccessfullyoperatinginthePhilippines.Thereisroomformore.

Shiprepairconversion,overhaul,alteration,modificationorrepairofhull,machinery,equipment,outfitsandcomponentsofanytypeofship

Shipyardoperations

Shipping-Domesticshipping-Overseasshipping

Sea-faring/Manning


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www.investphilippines.org

PhilippineBizSF facebook.com/pticsv

CONTACT US
http://www.investphilippines.org.uk/http://www.investphilippines.org.uk/http://www.investphilippines.org.uk/http://www.investphilippines.org.uk/


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%ank y&!MaramingSalamat

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