UPDATE ON THEECONOMY AND

BUSINESS OPPORTUNITIES IN THE PHILIPPINES

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

GDP

Stable and Resilient Economic Growth Stable and Resilient Economic Growth

GDP (2012) 6.8%

GDP (2013) 7.2%

Headline Inflation (2012) 3.2%

Headline Inflation (2013) 3.0%

Source: National Statistical Coordination Board & National Statistics Office

Continuous Inflow of OFW Remittances Continuous Inflow of OFW Remittances

•2013: US$22.76 Billion (6.4% higher than 2012 record)

•2012: US$21.39 Billion (6.3% higher than 2011 record)

•Remittance drew strength from demand for skilled and professional Filipinos abroad, along with better data capture through banks and financial institutions

3

Merchandise Exports:

Steady Export GrowthSteady Export Growth

Service Exports:

2012: US$20.4 Billion

2013: US$21.8 Billion(anchored on BPM sector that

generated revenues of US$15.5 Billion and direct employment of 900,000)

2012: US$51.99 Billion

2013: US$54 Billion

(3.6% higher than 2012)

4

The Gross International Reserves reached

US$83.1 Billion in 2013

TOTAL BOI & PEZA APPROVED INVESTMENTS(in PhP Billion)

Steady Investment FlowsSteady Investment Flows

10.4%

2013 TOP SECTORS (% of Total Investments)

1. Electricity, Gas, Steam & Air Conditioning

2. Real Estate Activities

3. Manufacturing

4. Transportation & Storage

5. Accommodation & Food Service Activities

2013 TOP SOURCES (% of Total Foreign Investments)

1. British Virgin Islands

2. U.S.A.

3. Japan

4. Netherlands

5. Singapore

US$ 15.17B US$ 15.92BUS$ 17.48B

US$ 5.05BUS$ 6.69B

Total Investments Foreign Investments

US$ 6.31B

World Bank

Ease of Doing Business

Report 2014

World Economic Forum (2013/2014)

Global Competitiveness Index

Economic Freedom of the World

(2013 Annual Report)

2014 Index of Economic Freedom

Improving Global Competitiveness RankingImproving Global Competitiveness Ranking

+5Out of 152 countries:

From #61 to 56

+30Out of 189 countries:

From #138 to 108

+8Out of 177 countries:

From #97 to 89

6

+6Out of 148 countries:

From #65 to 59

Credit RatingsCredit Ratings

Standard & Poor’s

Moody’s

FROM TO

BB+

Ba1

BB-

BBB-

Outlook: Stable

Baa3

Outlook: Positive

BBB

Outlook: Stable

INVESTMENT GRADE

7

Fitch Ratings

World Bank (2012)

Government Effectiveness Indicator

Transparency International (2013)

Corruption Perceptions Index +11

Out of 177 countries:

From #105 to 94

+1Out of 215 countries:

From #57 to 58

Strengthened Governance and Anti-Corruption Measures

Strengthened Governance and Anti-Corruption Measures

8

I. Preferred ActivitiesRegular List:

Agriculture/ Agri-business and Fishery Creative Industries/Knowledge-Based

Services Shipbuilding Mass Housing Iron and Steel Energy Infrastructure Research and Development Green Projects Motor Vehicles Strategic Projects Hospital /Medical Services Disaster Prevention, Mitigation and Recovery

Projects

II. Export Activities

III. Mandatory List

Manufacture of export products Services exports Activities in support of exporters

IV. ARMM List

Investment Priorities Plan 2013Investment Priorities Plan 2013

9

The Philippine Advantage

10

Rich Talent Pool

Robust Infrastructure

Strategic Business Location

First-Class Lifestyle

Attractive Investment Incentives

The Philippine AdvantageThe Philippine Advantage

11

Robust InfrastructureRobust Infrastructure

12

Airports Railways Roads Economic Zones

• 9 international

• 20 domestic

• 3 connecting railways, which span across the Metro

• 12 roll-on/ roll-off ports

• Subic-Clark-Tarlac Expressway (SCTEX),

•North Luzon Expressway (NLEX),

•STAR Tollway and Cavite Expressway

• 66 Manufacturing EcoZones

• 197 IT Parks and Centers

• 17 Agro-Industrial EcoZones

• 18 Tourism EcoZones

• 2 Medical Tourism Zones

Strategic Business LocationStrategic Business Location

The country’s location is a critical entry point to over 500 million people in the ASEAN Market and a natural gateway to the East- Asian economies.

• The country is likewise placed at the crossroads of international shipping and airlines.

• Within Asia, the Philippines is reachable within 3 to 4 hours by plane.

13

First Class LifestyleFirst Class Lifestyle

Second home to expatriates who enjoy the company of the warmest people in the region,

the country's openness to varied cultures and a decidedly global outlook.

Accessible and affordable luxuries – value-for-money housing, modern recreational facilities,

first-rate educational institutions adopting international standards, business centers,

hospitals, etc.

A growing favorite tourist destination, as evidenced by the steadily increasing tourist

arrivals.

14

INCENTIVEBOI

(Executive Order No. 226, as amended)

PEZA(Republic Act No. 7916, as

amended)

CDC / SBMA(Republic Act No. 7227 – Bases

Conversion Devt Authority

Income Tax Holiday(ITH)

4 – 6 years (max of 8 years) Exempted from all local and national taxes - value-added taxes, franchise taxes, excise and ad valorem taxes)

ITH Bonus 3 years provided the firm meets certain conditions

Special Tax Rate of 5% on Gross Income Special Tax Rate of 5% on Gross Income

Importation of Capital Equipment, Spare Parts and Supplies

0% duty-free Tax and Duty-Free

Wharfage Dues and Export Tax, Duty, Impost and Fees Exempted None

Simplication 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.

Attractive Investment Incentives:

The Philippine AdvantageThe Philippine Advantage

15

Rich Talent PoolRich Talent Pool

Number of college degree graduates per year

2013Projection

Medical and natural sciences, allied fields

158,159

Business, accounting, and related fields

119,526

Social and behavioral sciences, education

67,474

Engineering and architecture 57,799

IT-related and mathematics 57,921

Fine arts, masscom, humanities 13,549

Others 58,845

Our Professionals are :

• Highly Educated and English Proficient• Strongly Customer Service Oriented• Highly Trainable with Fast Learning Curve• Adaptable to Universal Cultures • High Level of Commitment and Loyalty

TOTAL Tertiary level 533,273

• We produce over 530,000 college graduates per year across a wide range of disciplines.

For further information, please contact:

Emmanuel Ang Commercial Consul for Australia and New Zealand

Philippine Trade and Investment Center (PTIC) in Sydney Philippine Department of Trade and Industry

Suite 302, Level 3, 301 George St., Sydney, NSW 2000 Australia Phone No.: +61.2.9299 0002

Fax No.: +61.2.92990007 Email: dtisydney@bigpond.com; sydney@dti.gov.ph

Website: http://investphilippines.gov.ph/category/sydney