Overview

In line with the Government’s thrust of making Philippines a competitive country in the global environment through various investments, investors, both existing and prospective should be well informed of the economic environment and regulations. Information about the economic environment of the country and industry is essential because it will help investors assess possible opportunities and avoid possible threats at the same time. Regulations, on the other hand, provide the guidelines with which investments must be done.

This Investment Portfolio has been prepared by Financial Advisors Inc. to address prospective foreign investors in the Philippines, particularly in the tourism industry. It aims at providing prospective investors information about the investment climate of the country, costs of doing business, investment procedures, and laws pertaining to tourism and so on. Investment climate on the tourism industry itself is included so investors can gauge if such climate is conducive to their investments. The portfolio brings in together salient facts needed by the investors to not only entice them to invest in the Philippines but also make sure that such investments generate acceptable rate of return to the investors and more importantly, provide socio-economic benefits to the country.

Philippine Advantage

The Philippines, with its strategic location, is a gateway to the huge Asian market. Its considerable attractions as an investment destination include:

A pool of English-speaking people who are highly trainable. Their capabilities and merits as blue-collar workers, technicians, professionals and managers have been confirmed in postings with foreign firms operating in the Philippines and overseas.

A large potential market for consumer goods on account of its fast-growing population. Its ASEAN affiliation provides further opportunities for access to the ASEAN Free Trade Area (AFTA).

The foreign-investor friendly posture of government. It has manifested its commitment to create conditions that attract foreign investments. Liberalized policies and regulations on foreign investments continue to be put in place.

A conducive location for Asia-Pacific expansion programmers & production facilities, further supported by the governments’ grants of fiscal concessions.

The opening of industries previously restricted like the telecommunications industry, transportation, banking, retail trade energy & post extractive petroleum processing & distribution industry, for the participation of foreign investors.

The many opportunities foreign investors can avail of, given their wealth of experience, in pursuing activities related to the development of the country backed up by available incentives for enterprises.

The potential growth construction enterprises can attain in the country because of the implemented build-operate-transfer (BOT) scheme by the government. The said scheme provides for the development opportunity of construction enterprises, investors funding the construction, operates the facility for a fixed term, recover their investments plus adequate rate of return and fees then transfer the facility to the government.

Availability and accessibility of special economic zones and free ports in various parts of the country where infrastructure supports are adequately provided and locators are granted fiscal and non-fiscal incentives.

The competitive edge the information and communications technology (ICT) industry has which includes call centers. The said industry is booming in the country and is generating employment opportunities for local citizens.

A highly developed legal system.

Investment Incentives

Wide incentives are available to foreign investment in activities that significantly contribute to national industrialization and socioeconomic development, and in export-oriented enterprises. It is also available to export oriented enterprises within ecozones administered by PEZA or similar agency.

Income tax holidays of three to eight years are a central feature in most incentive packages.

Enterprises locating in special economic zones may be entitled to a special 5% rate of tax on their gross income (sales less direct costs) in lieu of all other national and local taxes. Enterprises registered under Subic Bay Metropolitan Authority (SBMA), which administers the conversion of US Military based.