INVEST IN THE PHILIPPINES,

INVEST IN GROWTH

CRISTINO L. PANLILIO DTI Undersecretary and BOI Vice Chairman & CEO

GPCCI ECONOMIC FORUM 26-May-2011

Snapshot of the Philippine Economy

Economic Scorecard

GDP (2010) 7.3%

GNP (2010) 7.2%

Headline inflation (March) 4.3%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GDP GNP

Economic Growth Projections

2011

Official Target 7.0 - 8.0%

Poll of Forecasters 4.8%

IMF 5.0%

5.0%

ADB 5.0 %

Philippine Investments

Philippine Investment Performance

(In Billion Pesos)

Source: National Statistical Coordination Board (NSCB)

231.23

357.00

314.11

464.22

385.80

221.82

542.60

-

100.00

200.00

300.00

400.00

500.00

600.00

2004 2005 2006 2007 2008 2009 2010

73% growth

BOI-PEZA Approved Investments (In Billion Pesos)

-

100.00

200.00

300.00

400.00

500.00

600.00

2006 2007 2008 2009 2010

BOI PEZA

69% growth

Source: National Statistical Coordination Board (NSCB)

Who Are With Us

Maintenance, Repair, Overhaul Services Pharmaceutical

Electronics ICT

Engineering Services Outsourcing Shared Services

Automotive

Philippine-German Investment Relations

German FDI (2006-2010)

In Million Pesos

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

2006 2007 2008 2009 2010

Source: National Statistical Coordination Board (NSCB)

o Germany’s foreign direct investments to

the Philippines in 2010 amounted to

Php1.096 Billion of approved investment.

o The major recipients of German

investments are: manufacturing; finance

and real estate; and private services.

o Notable BOI-PEZA registered companies

with German equity: Continental TEMIC

Electronics, (Philippines) Inc., Lufthansa

Technik Philippines, Inc., Siemens IT

Solutions and Services, Inc., SCA Hygiene

Corporation, Bombardier Transportation

(Shared Services) Philippines, Inc.,

Empress Dental Laboratories, Inc., Global

Collaborative Solutions, Inc., and Farmout

Central Intouch, Inc.

BILATERAL AGREEMENTS BETWEEN

PHILIPPINES AND GERMANY

• AGREEMENT ON THE PROMOTION AND RECIPROCAL PROTECTION

OF INVESTMENTS

• TREATY ON AVOIDANCE ON DOUBLE TAXATION

AREAS OF COMPLEMENTATION ON INVESTMENT

MATTERS BETWEEN PHILIPPINES AND GERMANY

• Encourage the exchange of investment missions that will highlight the

strengths of the two countries.

• Promote more joint venture partnerships between Filipino and German

businessmen. German companies in joint venture with Philippine

companies are encouraged to set up their manufacturing base in the

Philippines to serve the ASEAN market and the rest of the region.

Investment Opportunities for Germany

I. Preferred Activities

Regular List:

Agriculture/ Agri-business and Fishery

Ship Building

Mass Housing

Energy

Infrastructure

Research and Development

Green Projects

Strategic Projects

Motor Vehicles

Tourism

PPP Projects

II. Export Activities

III. Mandatory List

Production and Manufacture of Export Products

Services Exports

Activities in Support of Exporters

Proposed Investment Priorities Plan 2011

IV. Export ARMM List

• Focus on infrastructure support facilities for tourism, agriculture, social services and growth centers

• Provide incentives to stimulate private resources

• Ensure competition, fairness and transparency

• Provide assistance in preparation of business case, pre-FS, full FS, detailed engineering, tender document, etc.

• Fast-track project approval process

• 2011 Rollout/Tender: 10 Projects

• 2012 & beyond: 73 projects

Public-Private Partnerships: Cornerstone Strategy of National Development

Project Name Publication of Invitation to

Bid

Project Cost

(in US $ Million)

MRT/LRT Expansion Program: Privatization

of LRT 1 Operation & Maintenance

(DOTC/LRTA)

March 2011 171.11

MRT/LRT Expansion Program: Privatization

of MRT 3 Operation & Maintenance

(DOTC/LRTA)

2nd quarter of 2011 140.0

NAIA Expressway, Phase 2 (DPWH) May 2011 235.3

NLEX-SLEX Connector June 2011 477.0

Daang Hari – SLEX Link Road April 2011 35.5

First Batch of PPP Projects for 2011 Rollout

www.ppp.gov.ph

Project Name Publication of

Invitation to Bid

Project Cost

(in US$ Million)

LRT Line 2 East Extension Project November 2011 251.11

MRT/LRT Expansion Program: LRT 1 South

Extension project July 2011 1,555.55

CALA Expressway – Manila Side Section

(27.5 km) December 2011 262

New Bohol Airport Development August 2011 168.89

Puerto Princesa Airport Development August 2011 97.78

New Legaspi (Daraga) Airport Development August 2011 71.11

Privatization of Laguindingan Airport Operation

and Maintenance June 2011

33.33

Other PPP Projects for 2011 Rollout

www.ppp.gov.ph

Our Value Proposition

Rich Talent Pool

Robust Infrastructure

The Philippine Advantage

• 470,000 tertiary graduates per year

- 21% IT / Computer Science / Engineering

- 24% Business & Accountancy

- 16% Medical & Allied / Natural Sciences

• 39 million labor force

PHYSICAL INFRASTRUCTURE

- Airports: 9 international, 20 domestic

- Connecting Railways: 3 (Metro Manila)

- Roll off / Roll on Ports: 12

- Newly constructed (major) roads

TELECOMMUNICATIONS

- Completely deregulated industry

- International connectivity and expanding

multimedia infra

- Capable of handling volumes of data at 250 Gbps

ECOZONES AND IT PARKS

- Manufacturing (64)

- IT Parks (148)

- Medical Tourism (2)

-Agro Industrial (13)

-Tourism (12) TOTAL: 239

POWER

- Total installed capacity: 15,852 MW

- Level of electrification: 97%

- Presence of privately-owned companies

providing various energy sources

Strategic Business Location

The Philippine Advantage

First-Class Lifestyle

Regional Hub for Logistics

Good access to the important 550 million

ASEAN people

Reachable within 4 hours by plane from

Asian key cities

Friendly people

Value-for –Money housing

Modern recreational activities

First-rate educational institutions

Comparison of Incentives

INCENTIVE

BOI

(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

Duty-free Tax and Duty-Free

Wharfage Dues and Export

Tax, Duty, Impost and Fees Exempted No exemption

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

Due diligence assistance

Information support

Visit program development & investment briefing

Business matching

Business registration facilitation

Networking with IPUs and other government agencies on pre-operational

business requirements

Fast tracking with registration procedures

Assistance with local government requirements

Aftercare service

Presence of government network to quickly respond to concerns

Regular supervision & monitoring

BOI Services

Discover the

Philippine Advantage!

Contact details:

MR. CRISTINO L. PANLILIO

Undersecretary/Vice Chairman and Managing Head

Board of Investments

Industry and Investment Building

385 Sen. Gil Puyat Avenue,

1200 Makati City, Philippines

Tel: (632) 8909332; 8909303

Fax: (632) 8953512

Email: CLPanlilio@boi.gov.ph

Website: www.boi.gov.ph