Trade and Investment Opportunities in the Philippines CRISTINO L. - PowerPoint PPT Presentation

Trade and Investment Opportunities in the Philippines CRISTINO L. PANLILIO Undersecretary Department of Trade and Industry 20 th CREBA National Convention Marriot Hotel Manila Newport Complex, Pasay City 07 October 2011

Snapshots of the Philippine Economy 2010: Fastest economic expansion since 1986 Philippine GDP 2005 - 2010  GDP up 7.8% in 2010 7.8 250 8 6.6  Ave. inflation, 3.8% 7 200 6 5.2 4.8  Exports up 34% 5 150 4.2 4  US$12 B IPA-approved 100 3 2 Investments 50 1.1 1  Q1 2011 GDP up 4.9% 0 0 2005 2006 2007 2008 2009 2010 Current GDP (US$ B) Real GDP Growth Rate (%) Source: NSCB

Expanding Exports PH Merchandise Exports Performance, 2005-2010 (Value in US$ Billions, Growth Rate in %) $51.5 60.000 $50.5 $49.1 $47.4 50.000 34.0% $41.3 40.000 $35.1 14.9% 6.4% 30.000 4.0% Amount in US$ B -2.8% 20.000 -28.5% Growth Rate (%) 10.000 0.000 2005 2006 2007 2008 2009 2010  Exports Jan – June 2011: US$24.7 B, ↑ 4.1%

Expanding Exports in 2010 PH’s Top Export Markets, 2010 PHs Top Commodity Exports, 2010 In US$ Billion In % Share 1 JAPAN 7.841 2 USA 7.559 Ignition wiring set & Others other wiring sets, 2.2 SINGAPORE 7.319 3 Woodcrafts & furniture, 4 CHINA 5.724 2.3 Electronics 60.4 5 HK 4.334 Coconut oil 2.5 Total PH Exports 51.50 Articles of apparel & clothing accessories, 3.3

Increasing Investments Total IPA – Approved Investments, 2005 – 2010 (Value in US$ Billions) 12.0 15.0 10.4 8.4 7.0 4.2 10.0 6.6 5.0 0.0 2005 2006 2007 2008 2009 2010  2010 total approved investments: US$12 B, ↑ 82%  Jan-June 2011 BOI – PEZA approved investments: US$6.6 B, ↑ 24% Source: FDI Quarterly Reports, NSCB

Our Competitive Advantage Large Competent Labor Pool  35.92 M labor force  92.3% Literacy rate  76% Fluency in English  469,654 College grads  94,278 IT/Engineering  106,746 Business-related  128,057 Medical & Allied Sciences Strategic Location Robust Telecom Infra World-class Ecozones

Growth Industries Tourism Electronics BPO/Call Centers/IT Agribusiness Housing Shipbuilding/Heavy Industries Design Industry Mining

GROWTH Industry T O U R I S M  36,289 km coastline – “Asia’s Beach Capital”  Most diverse marine species in the world  Incentives for investments under Tourism Act of 2009 URBAN LEISURE CULTURE HISTORICAL ADVENTURE PALAWAN BANAUE BORACAY BOHOL

2011 IPP: Theme, Goal & Objectives “A New Day for Investments: Coherent, Consistent THEME: and Creative” “ More investments, more jobs” GOAL: • Enhance public-private partnerships • Maximize the opportunities from the implementation of free trade agreements (FTAs) • Strengthen the country’s global competitiveness OBJECTIVES: • Support MSMEs • Promote a green economy 9

TOURISM 2011 IPP Preferred Activity • Tourist Transport • Tourism-related facilities • Retirement Village 10

TOURISM 2011 IPP Preferred Activity • Tourist Transport • Brand new, world-class buses and/or mini- buses/coasters. • Proportional number of imported transport service (Allowed No. of vehicles shall be based on tourist arrivals in the area or the ratio of hotel/resort facilities/rooms) • Only Duty Free for Quality transport 11

TOURISM 2011 IPP Preferred Activity • Tourism-related facilities 1. Accommodation Facilities (including convention/exhibition, agri-tourism farms and facilities) • Service apartment/condotels need not be exclusively for tourist • Tighter modernization coverage • Proportional number of imported transport service • Pioneer Agri/Eco Tourism now 20 hectares down from 50 hectares 2. Health and Wellness 3. Tourism Training Centers and Institutes 12

TOURISM 2011 IPP Preferred Activity • Retirement Village • Minimum area of twenty (20) hectares may qualify for pioneer status 13

BOI Investment Incentives INCENTIVE Executive Order No. 226, as amended Income Tax Holiday 4 – 6 years (max of 8 years) (ITH) ITH Bonus 3 years provided the firm meets certain conditions Importation of Capital Equipment, Spare Duty-free Parts and Supplies Wharfage Dues and Export Tax, Duty, Exempted Impost and Fees Simplification of Customs Procedures Available  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 Employment of Foreign Nationals period.  All foreign employees may bring with them their spouses and unmarried children under 21 years of age.

GROWTH Industry E L E C T R O N I C S  PH’s top dollar earner and top export product  US$31.1 B or 61% of total exports in 2010  US$2.27 B IPA-approved investments in 2010  500,000 direct employment in 2010

HOME TO GLOBAL BRANDS SEIPI

GROWTH Industry B P O/ Call Center/ IT  Call center capital of the world  “Off Shoring Destination of the Year” in 2008 -2010 by UK NOA  15 - 25% annual industry growth  600,000 direct employment

HOME TO THE BEST GLOBAL COMPANIES

GROWTH Industry AGRIBUSINESS  PH is 47% Agricultural Land  Opportunities in post-harvest facilities such as cold chain facility  36,289 coastline

Large-scale Com p any DEL MONTE PHILIPPINES  23,000 ha. pineapple plantation  700,000-ton processing capacity  Port beside the Cannery  Operates the world’s largest fully-integrated pineapple operation  85 years of pineapple growing and processing

GROWTH Industry SHIPBUILDING / HEAVY INDUSTRIES  PH, 4 th largest shipbuilder in the world  Produces ships of large tonnage capacities (480,000 dwt)  Readily available skilled manpower  63,000 welders  50,000 engineering & architectural graduates  27,688 skilled/semi-skilled workers  5,096 technical personnel  2,370 managerial personnel

Large-scale Com p any HANJIN H A N J I N Heavy Industries Co. (HHIC) Phils., Inc.  Established in 2006 with US$1.8 B investments  Employs around 20,000 employees  Manufactures ships from 175,000 dwt to 320,000 dwt Source: www.hhic-phil.com

Large-scale Com p any TSUNEISHI T S U N E I S H I Heavy Industries (Cebu), Inc. Source: www.newsflash.org  Builds merchant ships up to 180,000 dwt  Engages in shipbuilding, ship repair and manufacturing of outfittings, engineering & fabrication services, conversion services for foreign and PH clients

Large-scale Com p any A G & P  Filipino-based modular manufacturing units allow clients to execute critical projects world-wide, reducing on-site labor costs by up to 80%; clients reduce local sourcing and construction risk enabling them to implement high-quality projects anywhere in the world with far less volatility

GROWTH Industry D E S I G N - based Industry Export Value in 2010 Jan-June US$ Millions 2011 Textile, Apparel, 1,950 1,035 Footwear & Travel SEIPI Goods Woodcraft & 1,181 850 Furniture SEIPI Sources: BETP, Manila FAME International

DESIGN-based Industry The “Phoenix” • The 1 st and only bamboo and rattan car in the world designed by Kenneth Cobonpue • Main feature in the “Imagination & Innovation Exhibit” in SEIPI Via Tortona in Milan, Italy held in February 2011 SEIPI

GROWTH Industry M I N I N G  5 th most mineralized country  Located at the “Ring of Fire”  2 nd in gold; 4 th in copper; 5 th in nickel; 6 th in chromite Chamber of Mines of the Philippines Philex Mining Corp.

Public-Private Partnership: Cornerstone Strategy of National Development Projects for Rollout 2011  NAIA Expressway Phase 2  Daang Hari-SLEX Link Road  MRT-LRT Expansion Program  NLEX-SLEX Connector NAIA Expressway

DTI Initiatives 1. Providing Better Business Environment  Power Cost  Red Tape  Business Name Registration System (BNRS)  Philippine Business Registry (PBR)  SEC Land Bank Registration  Business Permit Licensing System (BPLS)  Corruption 29

DTI Initiatives 2. Enhancing SME Capability  Packaging and Design Assistance  Doing Business in Free Trade Areas (DBFTA)  Tindahang Pinoy  SME Caravan  One-Town One-Product (OTOP)  Trade Fairs  Shared Services Center 30

Prospects and Outlook • 10% merchandise and 16% service exports growth for 2011-2013 • 15% investment growth for 2011 & 2012

Pledge to Business www.filglobe.com Photo by: Pat Hocchuan “We will make our nation very desirable to business. We will cut red tape dramatically and implement stable economic policies. We will level the playing field for investors and make government an enabler , not a hindrance, to business.” President Benigno S. Aquino III