Investing in the Philippines
The Philippines represents an enormous opportunity for investment for
companies who take the time to check out what this country has to offer.
The Philippines is open to foreign investment and is committed to the
liberalization of the service sector in accordance with WTO guidelines.
Indeed the Philippines was one of the founding members of the World
Trade organization. We offer special incentives to companies that invest
into priority areas as designated by the government.
We have a skilled workforce that has been educated with English as the
primary means of instruction. The overall literacy rate of the
population is above 94% and among college graduates more than 99% have a
professional proficiency in English. What is more our people speak
English as one of our national languages making them oral/aural
proficient. This is especially important in call center and customer
support operations. The Philippines is already excelling in these areas.
We have a government that is committed to growing the IT services
industry and which offers attractive investment incentives to companies
setting up here.
We have an exchange rate that makes both real property and employment
highly affordable for those companies who want to get in on the ground
floor and know the bargain that we offer.
Our cities and our lifestyle are designed for relaxed living. Whether
you are in Manila, or the other major urban centers of Cebu City or
Davao you will find modern well-equipped cities with facilities designed
for international living and at highly affordable prices.
Finally we can offer you the Philippines: A beautiful country that is a
paradise for those who love the outdoor life. We have golf courses that
are world class, dive sites all over the country for those who like the
water, unspoiled beaches for those who just want to relax - and all at
very affordable prices. For the sophisticates we have fine dining with
the best the world has to offer. We have world-class entertainment at
the National Cultural Center and in major provincial centers
Importantly, we have superb international schooling in Manila and at all
major centers including the Subic and Clark special economic zones. Our
international education is world class and several offer the
international baccalaureate program as part of their curriculum.
Investing in the IT Sector
Knowledge based industries are rapidly replacing traditional
manufacturing as the growth engine of the 21 st century and the
Philippines is well paced to take advantage of the shift. The
Philippines has been cited as "the world's top source of knowledge
workers" according to Meta Group's Global New E-Economy Index (GNEI).
This is based on criteria such as the availability of qualified
engineers and ICT workers.
"The 'knowledge jobs' category of the Global New E-Economy Index (GNEI)
is one of the indicators of a country's IT-readiness and capability."
This sector is growing rapidly in the Philippines and key cluster
industry centers are already emerging in Manila, in Cebu and in a
number of the PEZA investment zones.
In relation to the IT sector, the current Investment Priorities Plan
Special sets out those areas covered by special investment incentives.
ICT services: applications
development (system software, middleware, application software and
ICT enabled services: business
process outsourcing (BPO) including customer contact centers, content
creation, distance learning, market research, travel services, finance
and accounting, human resources and other administrative services such
as purchasing and where these can be transformed and delivered through
the ICT infrastructure.
ICT support activities including
pure research and development, education and training for ICT,
incubation centers for ICT projects and community access facilities.
Under the Omnibus Investments Code, an investor may enjoy certain
benefits and incentives, provided he invests in preferred areas of
investments found in the current Investment Priorities Plan (IPP). The
IPP, issued annually by the Board of Investments (BOI), is a list of
promoted areas of investments eligible for government incentives in
consultation with related government agencies and private sector.
An enterprise may still be entitled to receive incentives even if the
activity is not listed in the IPP so long as:
At least 50% of production is for exports, if Filipino-owned
At least 70% of production is for exports, if majority foreign-owned
enterprise (more than 40% foreign equity), The BOI in certain instances
as indicated in the IPP may completely or partially limit the incentives
available to export products. Under Book I of the Omnibus Investments
Code, BOI-registered enterprises are given a number of incentives in the
form of tax exemptions and concessions. These are
Incentives for Regional Headquarters and Regional Operating
Headquarters in the Philippines Full details of the incentives available
can be obtained from the Board of Investments website. These include:
| A 4 8 year
income tax holiday (ITH) depending on the size and nature of
A special 5% tax rate after the lapse of the ITH;
Tax and duty exemption on imported capital equipment;
Unrestricted use of consigned equipment;
Additional deductions for training expenses;
Additional deductions for labor expenses;
Exemption from wharfage dues, duties and other fees and
Ease of employment of foreign nationals.
There are a number of local service companies who can
provide specialized advice in this area.