2012

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PHILIPPINE BUSINESS
ENVIRONMENT
Outline of Presentation
I.
II.
III.
IV.
V.
Philippine economy vis-à-vis other ASEAN countries
Drivers of Philippine economic growth
Why should Chinese investors come to the Philippines?
Overview of Philippines-China economic relations
Growth areas for PHL-China Economic partnership?
I. Philippine economy vis-à-vis other ASEAN countries
Recently, Philippines has enjoyed better macroeconomic
fundamentals.
•
•
•
GDP growth rate
Inflation rate
Credit rating
Philippines has been enjoying a high growth rate, low
inflation, and good fiscal position.
With a strong domestic economy, Philippines is expected to
be economically stable in coming years.
Stable economy: Conducive environment to do business.
I. Philippine economy vis-à-vis other ASEAN countries
GDP growth rate
Country
2010
2011
2012
2013
PHILIPPINES
7.6
3.6
6.8
7. 2
Indonesia
6.1
6.5
6.3
5.6 (Q3)
Malaysia
7.4
5.1
5.6
5.0 (Q3)
Thailand
7.8
0.1
6.4
2.7 (Q3)
Vietnam
6.8
6.0
5.0
5.5 (Q3)
Source: Bangko Sentral ng Pilpinas (BSP)
GDP growth rate
• Projected growth in 2014 is 6.5-7.5%
• From 2014-2016: targeted annual GDP
growth is 7-8%
Inflation rate
Country
2010
2011
2012
2013
PHILIPPINES
3.8
4.6
3.2
2.9
Indonesia
5.1
5.4
4.3
7.0
Malaysia
1.7
3.2
1.7
2.8*
Thailand
3.3
3.8
3.0
2.2
Vietnam
8.9
18.7
9.3
6.6
* October-November
Source: Bangko Sentral ng Pilpinas (BSP)
Inflation rate
Philippines has been enjoying a high growth rate,
low inflation, and good fiscal position.
With a strong domestic economy, Philippines is
expected to be economically stable in coming
years.
Stable economy: Conducive environment to do business.
Credit ratings for 2013
Country
Standard &
Poors
Moody’s
Fitch
PHILIPPINES
BBB-
Baa3 (positive)
BBB(positive)
Indonesia
BB+
Baa3
(stable)
BBB(stable)
Malaysia
A-
A3
(stable)
A(positive)
Thailand
BBB+
Baa1
(stable)
BBB+
(stable)
Vietnam
BB-
B2
(stable)
B+
(stable)
Source: Standard and Poors, and Moody’s
II. Drivers of Philippine economic growth
•
•
•
•
Population – Size of Domestic market
Remittances from overseas Filipino workers (OFWs)
BPO services
Manufacturing
II. Drivers of Philippine economic growth
• Population
2nd largest domestic economy in ASEAN, with favorable demographics.
Country
Population Size – in million
(July 2013 est.)
PHILIPPINES
105.7
Indonesia
251.1
Malaysia
29.6
Thailand
67.4
Vietnam
92.4
Source: CIA World Factbook
•
Remittances from overseas Filipino workers (OFWs)
YEAR
AMOUNT (US$ billion)
Sources
2007
2008
2009
2010
2011
2012
2013
14.45
16.43
17.35
18.76
20.12
21.39
22.76
US, Canada, Saudi Arabia, UK,
Japan, UAE, Singapore
Pillar of the domestic economy.
Source: Bangko Sentral ng Pilipinas (BSP)
•
Business Process Outsourcing (BPO)
Composition of the Philippine economy
Sector
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004 2003 2002 2001 2000
Agriculture
11.8
12.8
12.3
13.7
14.7
13.8
13.8
14.3
14.8
14.8
15
15
17
20
20
Industry
31.1
31.4
32.6
31.7
31.6
31.9
31.7
32.1
31.9
31.9
35
31
30
32
32
Services
57.1
55.8
55.1
54.6
53.7
54.3
54.5
53.7
53.2
53.2
50
54
53
48
48
Strengths of the economy has been its services. BPO services has been a growth sector.
Now, US$13.5 billion industry.
Source: Bangko Sentral ng Pilipinas (BSP)
Competitive Advantage of BPO Services in the
Philippines
•
•
•
•
•
•
•
BFSI (banking, financial, services, insurance)
MDR (manufacturing, distribution, retail)
Healthcare
Telecommunications
Travel
Energy
Media
III. Why should Chinese investors come to the Philippines?
•
•
•
•
Preferred investment destination for multinational
companies
Geographic proximity
Size of population
Favorable access to major markets
Why should Chinese investors come to the Philippines?
• Summary of FDI Inflows to the Philippines (2002-2013)
(in million US$)
Source: Bangko Sentral ng Pilipinas (BSP)
2013…
2012
2011
2010
2009
2008
2007
2006
2005
2004
1,542
Summary of FDI Inflows to the PHL (2002-2013)
491
4000
688
3500
1,854
3000
2500
2,921
2000
2,916
1500
1,544
1000
1,963
500
1,298
0
1,816
2,797
3.7 billion (for the period January to November 2013)
2003
–
–
–
–
–
–
–
–
–
–
–
–
2002
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Summary
of FDI
Inflows to
the PHL
(20022013)
Philippines: preferred investment destination
Geographic proximity
Close to coastal regions of China.
• Favorable access to major markets
The Philippines’ top markets as of July 2013:
1. Japan
2. U.S.A.
ASEAN FTAs with other countries
3. China
1.ASEAN-Australia-New Zealand
4. Singapore
2.ASEAN-China
3.ASEAN-India
5. Hong Kong
4.ASEAN-Japan
6. South Korea
5.ASEAN-Republic of Korea
7. Thailand
Source: www.asean.org
8. Germany
9. Taiwan
10.Netherlands
Source: Department of Trade and Industry (DTI)
IV. Overview of Philippines-China
economic relations
BILATERAL ECONOMIC RELATIONS
Philippines-China economic relations are important:
Philippine Department of Trade Industry (DTI) data
PHL’s Exports
to China
PHL’s
Imports
from China
Percentage
Growth
Percentage
Growth
Total Trade
Balance of
Trade
Total
Trade
Growth
Rate
2007
5,749,864
-
4,001,234
-
9,751,098
1,748,630
2008
5,469,185
-4.88%
4,245,553
6.11%
9,714,738
1,223,632
-0.37%
2009
2,933,923
-46.36%
3,807,417
-10.32%
6,741,340
-873,494
-30.61%
2010
5,701,503
94.33%
4,608,832
21.05%
10,310,335
1,092,671
52.94%
2011
6,237,326
9.40%
6,085,075
32.03%
12,322,401
152,251
19.52%
2012*
6,169,284
-1.09%
6,680,352
9.78%
12,849,636
-511,068
4.28%
Source: DTI Tradeline Philippines (*adjusted figures)
BILATERAL ECONOMIC RELATIONS
Philippines-China economic relations are important:
Philippines-China Bilateral Trade
(DTI Figures)
14,000,000
12,000,000
PHL exports to
China
10,000,000
8,000,000
PHL imports from
China
6,000,000
PHL-China Total
Trade
4,000,000
2,000,000
0
2003
Source: DTI Tradeline Philippines
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
BILATERAL ECONOMIC RELATIONS
Philippines-China economic relations are important:
Chinese Ministry of Commerce (MOFCOM) data (in US$1,000)
2007
China’s
China’s
Exports to
Percentage Imports from Percentage
PHL
Growth
PHL
Growth
7,505,610
23,128,747
-
Total Trade
30,634,357
Balance of
Trade
-15,623,137
Total
Trade
Growth
Rate
-
2008
9,088,405
21.09%
19,507,940
-15.66%
28,596,345
-10,419,535
-6.65%
2009
8,590,523
-5.48%
11,935,561
-38.82%
20,526,084
-3,345,038
-28.22%
2010
11,564,883
34.62%
16,199,501
35.72%
27,764,384
-4,634,618
35.26%
2011
14,259,326
23.30%
17,995,345
11.09%
32,254,671
-3,736,019
16.17%
2012
16,732,202
17.34%
19,637,989
9.13%
36,370,191
-2,905,787
12.76%
2013
19,835,385
18.55%
18,230,225
-7.17%
38,065,610
1,605,160
4.66%
Source: General Administration of Customs (GAC) of the People’s Republic of China
BILATERAL ECONOMIC RELATIONS
Philippines-China economic relations are important:
Chinese Ministry of Commerce (MOFCOM) data (in US$1,000)
Philippines-China Bilateral Trade
(Chinese Customs Figures)
40,000,000
China's
exports to
PHL
35,000,000
30,000,000
China's
imports
from PHL
25,000,000
20,000,000
ChinaPHL Total
Trade
15,000,000
10,000,000
5,000,000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: General Administration of Customs (GAC) of the People’s Republic of China
Export-Imports
EXPORTS TO CHINA (2012)
IMPORTS FROM CHINA (2012)
1. Electrical and electronic machinery,
equipment and parts
manufactured from materials on
consignment basis
2. Storage units
3. Portable digital automatic data
processing machines
4. Nickel ores and concentrates
5. Semiconductor devices
manufactured from material on
consignment basis
1. Parts of electrical apparatus from
line telephony
2. Other liquefied petroleum gas
3. Parts and accessories of automatic
data processing machines
4. Light petroleum oils and
preparations thereof
5. Other materials, accessories, and
supplies imported on consignment
basis for manufacture of
semiconductor devices
Source: Department of Trade and Industry (DTI)
Growth areas for Philippine-China economic
partnership
•
•
•
•
•
•
Business process outsourcing (BPO) services
Manufacturing
Tourism infrastructure
Public private partnership – infrastructure
Agro-industrial industries
Healthcare
Thank you.
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