Doing Business in the Philippines

The Philippine economy has been liberalized and allows foreign investors to participate in nearly all aspects of business.

The Philippines invites foreign investments particularly in the following areas:

  • BPO
  • Electronics (Support Industries)
  • Automotive Parts & Components
  • Agri-business (including plantations and processing of palm oil) and rubber)
  • Processed Food
  • Tourism
  • Infrastructure
  • Construction

Despite the uncertainty of the global economic outlook, the Philippines remain to be an ideal investment destination. On top of its rich and abundant natural resources and strategic location which offer endless possibilities to investors, its most prized resource is its people.

The Philippines is “the place to be for investments” due to the following reasons:

    • Generally liberalized services industry;
    • Cost-efficient in terms of wages over labor standard expectations ratio and low operational costs;
    • Strategic logistics access point in ASEAN + 3;
    • Natural pool of talents and culturally adaptable human resources that foreign investments look for particularly in the

Knowledge and Business Processing industries;

    • Strong remittances build gross international reserves to comfortable levels above international benchmark levels, thus

buoy up surplus on balance of payments; and

  • Committed and supportive governance.

Investment Statistics

Quality Workforce

The Filipino workforce is one of the most compelling advantages the Philippines has over any other Asian country. With higher education priority, the literacy rate in the country is 94.6% – among the highest. English is taught in all schools, making the Philippines the world’s third largest English-speaking country. Every year, there are some 470,000 college graduates across a wide range of disciplines.

Strategic Business Location

The Philippines is located right in the heart of Asia – today the fastest growing region. It is located within four hours flying time from major capitals of the region. Sited at the crossroads of the eastern and western business, it is a critical entry point to over 500 million people in the ASEAN market and a gateway of international shipping and air lanes suited for European and American businesses. Within Asia, the Philippines is reachable within 3 to 4 hours by plane. Currently, it has 9 international airports and 20 domestic airports.

Abundant resources

An archipelago like the Philippines offers diverse natural resources, from land to marine to mineral resources. It is also the biggest copper producer in Southeast Asia and among the top ten producers of gold in the world. It is also home to 2,145 fish species, four times more than those found in the Bahamas. The 7,100 islands boast of beautiful beaches and breathtaking sceneries that offer soothing leisure and relaxation spots for vacationers and tourists.

Low cost of doing business

Wages are typically less than a fifth of that in the United States. Local communication, electricity, and housing costs are also 50% lower compared to the US rates. Foreign companies that are now outsourcing programming and business processes to the Philippines estimate 30%-40% business cost savings, 15%-30% call center services and application systems, and 35%-50% software development.

Liberalized and Business-Friendly Economy

An open economy allows 100% foreign ownership in almost all sectors and supports a Build-Operate-Transfer (BOT) investment scheme that other Asian countries emulate. Government corporations are being privatized and the banking, insurance, shipping telecommunications and power industries have been deregulated. Incentive packages include the corporate income tax, reduced to a current 32%, with companies in the Special Economic Zones are subject to only 5% overall tax rates. Multinationals looking for regional headquarters are entitled to incentives such as tax exemptions and tax and duty-free importation of specific equipment and materials.

Developing Infrastructure for Global Growth

A well-developed communication, transportation, business and economic infrastructure links the three major islands and distinguishes the Philippine economy. Highly accessible by air, water and cyberspace, liberalization of inter-island shipping and domestic aviation further sparked improved facilities and services. The container terminals are suited to handle cargo traffic at the highest levels of efficiency.

Communication provides redundant international connectivity 24/7 with fiber optic cable as primary backbone network and satellite as backup. Economic reforms emphasize regional growth, converting remote areas into business centers. The landmark BOT legislation allows private investors to build and operate infrastructure, then turn it over to the Philippine government after a set period of time.

The landmark BOT legislation allows private investors to build and operate infrastructure, then turn it over to the Philippine government after a set period of time.

First-Class Lifestyle

Discover the best of sun, sea, sand and style in the tropical setting teeming with the best of western amenities. The Philippines is 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. Expats enjoy accessible and affordable luxuries – business centers, housing, schools, hospitals, shopping malls, hotels and restaurants, beach resorts, and recreation centers.

Unlimited Business Opportunities

As Asian economies integrate within the vast framework of the ASEAN Free Trade Agreement (AFTA), the Philippines is the natural and most strategic location for firms that want access to the large ASEAN market and its vast trade opportunities. The Philippines has enhanced and primed up various areas for investors and offers a dynamic consumer market accustomed to an array of product choices created by a competitive domestic economy.

Investor Incentives

In order to promote investments, the Philippines offers various incentives to qualified industries and businesses depending on its location within the country and its registration. Among these incentives are those given to enterprises registered with PEZA and BOI. In addition to these, incentives are also given to regional or area headquarters (RHQ) and regional operating headquarters (ROHQ).

PEZA – attached to the Department of Trade and Industry – is the Philippine government agency tasked to promote investments, extend assistance, register, grant incentives to and facilitate the business operations of investors in export-oriented manufacturing and service facilities inside selected areas throughout the country proclaimed by the President of the Philippines as PEZA Special Economic Zones.

The Philippine Board of Investments (BOI), an attached agency of Department of Trade and Industry (DTI), is the lead government agency responsible for the promotion of investments in the Philippines. Taking the lead in the promotion of investments, BOI assists Filipino and foreign investors to venture and prosper in desirable areas of economic activities.

All you need and more

The Philippines offer state-of-the-art telecommunications facilities, adequate, and uninterrupted power supply. There are ready-to-occupy offices and production facilities, computer security and building monitoring systems, as well as complete office services in specialized information technology (IT) zones. With the government’s focus on building up an IT-enabled economy, the Philippines is on its way to becoming the E-services Hub of Asia.


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