CRISTINO L. PANLILIO

Undersecretary

Department of Trade and Industry

20th CREBA National Convention

Marriot Hotel Manila

Newport Complex, Pasay City

07 October 2011

Trade and Investment Opportunities

in the Philippines

Source: NSCB

4.8 5.2

6.6

4.2

1.1

7.8

0

1

2

3

4

5

6

7

8

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010

Philippine GDP 2005 - 2010

Current GDP (US$ B) Real GDP Growth Rate (%)

Snapshots of the Philippine Economy

2010: Fastest economic expansion since 1986

GDP up 7.8% in 2010

Ave. inflation, 3.8%

Exports up 34%

US$12 B IPA-approved

Investments

Q1 2011 GDP up 4.9%

$41.3

$47.4 $50.5 $49.1

$35.1

$51.5

4.0%

14.9%

6.4%

-2.8%

-28.5%

34.0%

0.000

10.000

20.000

30.000

40.000

50.000

60.000

2005 2006 2007 2008 2009 2010

Amount in US$ B

Growth Rate (%)

PH Merchandise Exports Performance, 2005-2010 (Value in US$ Billions, Growth Rate in %)

Expanding Exports

Exports Jan – June 2011: US$24.7 B, ↑ 4.1%

Expanding Exports in 2010

Electronics 60.4

Articles of apparel & clothing accessories,

3.3

Coconut oil 2.5

Woodcrafts & furniture, 2.3

Ignition wiring set & other wiring sets, 2.2

Others

1 JAPAN 7.841

2 USA 7.559

CHINA 5.724

HK 4.334

SINGAPORE 7.319

5

3

Total PH Exports 51.50

4

PH’s Top Export Markets, 2010

In US$ Billion PHs Top Commodity Exports, 2010

In % Share

Total IPA – Approved Investments, 2005 – 2010 (Value in US$ Billions)

Source: FDI Quarterly Reports, NSCB

2010 total approved investments: US$12 B, ↑ 82%

Jan-June 2011 BOI–PEZA approved investments: US$6.6 B, ↑ 24%

4.2

7.0 8.4

10.4

6.6

12.0

0.0

5.0

10.0

15.0

2005 2006 2007 2008 2009 2010

Increasing Investments

Large Competent Labor Pool

World-class Ecozones

Strategic Location

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

Our Competitive Advantage

Robust Telecom Infra

Growth Industries

Electronics

Agribusiness

BPO/Call Centers/IT

Design Industry

Housing

Shipbuilding/Heavy Industries

Tourism

Mining

T O U R I S M

GROWTH Industry

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

PALAWAN BANAUE

HISTORICAL

BORACAY BOHOL

ADVENTURE

9

2011 IPP: Theme, Goal & Objectives

THEME: “A New Day for Investments: Coherent, Consistent

and Creative”

OBJECTIVES:

• Enhance public-private partnerships

• Maximize the opportunities from the

implementation of free trade agreements (FTAs)

• Strengthen the country’s global competitiveness

• Support MSMEs

• Promote a green economy

GOAL: “More investments, more jobs”

10

TOURISM

• Tourist Transport

• Tourism-related facilities

• Retirement Village

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

TOURISM 2011 IPP Preferred Activity

INCENTIVE Executive Order No. 226, as amended

Income Tax Holiday

(ITH) 4 – 6 years (max of 8 years)

ITH Bonus 3 years provided the firm meets certain conditions

Importation of Capital Equipment, Spare

Parts and Supplies Duty-free

Wharfage Dues and Export Tax, Duty,

Impost and Fees 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.

BOI Investment Incentives

GROWTH Industry

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

E L E C T R O N I C S

HOME TO GLOBAL BRANDS

SEIPI

B P O/ Call Center/ IT GROWTH Industry

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

AGRIBUSINESS

GROWTH Industry

PH is 47% Agricultural Land

Opportunities in post-harvest facilities such as cold chain facility

36,289 coastline

Large-scale Company

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

DEL MONTE PHILIPPINES

SHIPBUILDING / HEAVY INDUSTRIES

PH, 4th 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

GROWTH Industry

HANJIN

Established in 2006 with US$1.8 B investments

Employs around 20,000 employees

Manufactures ships from 175,000 dwt to 320,000 dwt

H A N J I N Heavy Industries Co. (HHIC) Phils., Inc.

Source: www.hhic-phil.com

Large-scale Company

TSUNEISHI T S U N E I S H I Heavy Industries (Cebu), Inc.

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

Source: www.newsflash.org

Large-scale Company

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

A G & P

Large-scale Company

D E S I G N - based Industry

SEIPI

SEIPI

Sources: BETP, Manila FAME International

GROWTH Industry

Export Value in

US$ Millions

2010 Jan-June

2011

Textile, Apparel,

Footwear & Travel

Goods

1,950 1,035

Woodcraft &

Furniture

1,181 850

DESIGN-based Industry

The “Phoenix”

SEIPI

SEIPI

• The 1st and only bamboo and rattan car in the world

designed by Kenneth Cobonpue

• Main feature in the “Imagination & Innovation Exhibit” in

Via Tortona in Milan, Italy held in February 2011

M I N I N G

Chamber of Mines of the Philippines

Philex Mining Corp.

GROWTH Industry

5th most mineralized country

Located at the “Ring of Fire”

2nd in gold; 4th in copper; 5th in nickel; 6th in chromite

Public-Private Partnership: Cornerstone Strategy of National Development

NAIA Expressway

Projects for Rollout 2011

NAIA Expressway Phase 2

Daang Hari-SLEX Link Road

MRT-LRT Expansion Program

NLEX-SLEX Connector

29

DTI Initiatives

Power Cost

Red Tape

Business Name Registration System (BNRS)

Philippine Business Registry (PBR)

SEC Land Bank Registration

Business Permit Licensing System (BPLS)

Corruption

1. Providing Better Business Environment

30

DTI Initiatives

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

2. Enhancing SME Capability

Prospects and Outlook

• 10% merchandise and

16% service exports

growth for 2011-2013

• 15% investment growth

for 2011 & 2012

Pledge to Business

“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

Photo by: Pat Hocchuan www.filglobe.com