The Philippines in brief
The Republic of the Philippines is a sovereign state in archipelagic Southeast Asia, with 7,641 islands spanning more than 300,000 square kilometers of territory. Situated right between the South China Sea and the Pacific Ocean, the country shares maritime borders with China, Indonesia, Japan, Malaysia, Palau, Vietnam and Taiwan, making the country the perfect gateway to the ASEAN region.
The Philippines is divided into three island groups; Luzon, Visayas, and Mindanao. The capital (Manila) and the largest city (Quezon City) are both part of Luzon and form the political, commercial, and cultural center of the nation. The Philippines is the world’s 13th most populous country (World Bank, 2022), with more than 113 million inhabitants, a quarter of which have settled in the country’s urban center (Metropolitan Manila).
The Philippines is a founding member of the United Nations (UN), World Trade Organization (WTO), the Asia-Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN) and has embassies and consulates in 62 countries around the world. With an open economy, acceptance of varied cultures and an overall global outlook, the Philippines has an internationalized culture and is teeming with the best of western amenities. Official languages are Filipino and English.
The country has a variety of natural resources and a globally significant level of biodiversity. The Philippines is considered to be an emerging market and a newly industrialized country, which has an economy transitioning from being based on agriculture to being based more on services and manufacturing.
Why the Philippines?
Strategic Business Location
Situated in the heart of Asia, the world’s fastest growing region, the Philippines is a short flight away from all major ASEAN capitals and offers a strategic location for foreign entrepreneurs.
Within the framework of the ASEAN Free Trade Agreement (AFTA), the Philippines is a logical entry point for firms in the ASEAN market and a natural gateway to the East-Asian economies and their trade opportunities.
Economy and Growth
Over the past two decades, the Philippines has emerged as one of the most dynamic and fastest-growing economies in the East Asia & Pacific region. With a new President in office and longer-term political security in place, the economy is projected to grow at 5.6 percent in 2023-24, and continuous efforts in promoting greater competition and attracting foreign investments will only further boost the country’s growth outlook in the upcoming years (World Bank, 2022).
The UNCTAD World Investment Report 2022 has named the Philippines as one of the most active in liberalizing foreign investment. The country has an open economy, allowing 100 percent foreign ownership in almost all sectors, governmental institutions are being privatized and numerous reforms efforts and regulations are in place to incentivize investors.
Incentive packages include the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act), which provides foreign companies with a significant reduction of corporate income tax and a new flexible tax incentive system to increase the country’s investment appeal. The previous Duterte administration has established the Ease of Doing Business and Efficient Government Service Delivery Act and the Anti-Red Tape Authority, with the purpose of eliminating bureaucracy and improving the ease of doing business. The legislation aims to strengthen and promote efficiency and simplicity by digitalization, expediting and streamlining government procedures.
Workforce
The Filipino workforce is one of the most compelling advantages of the country. The average Filipino employee is young, highly educated, and English proficient. The most recent EF English Proficiency Index ranks the Philippines as one of the highest in Asia in terms of and with over half a million graduates entering the workforce each year, the Philippines are assured of a continuous stream of quality employees.
Industry Trends and Business Opportunities
The passage of investment-friendly laws and increased government spending signal the country’s willingness to increase its competitive position.
Business is booming, with notable opportunities for business in the agri & food sector, maritime industry, IT & tech and the industrial, manufacturing, and transportation (IMT) sector.
AGRI & FOOD
Due to the Philippines’ large agricultural sector, there are numerous opportunities for production optimization (including greenhouses, climate control solutions, etc.), but also opportunities to improve food safety and crop resilience.
The Philippines’ young and growing population increases demand for premium food beverage provides and provides interesting chances for the processing and manufacturing companies.
MARITIME & INFRASTRUCTURE
Thanks to the country’s strategic positions along major international sea lines, the Philippines is prioritizing its maritime industry. The Build, Build Build initiative (2017), which constructed new roads, highways, bridges, airports and seaports is aimed at enhancing the Philippines’ overall infrastructure and improving connectivity. This ambitious plan leaves room to further optimize the Philippines’ harbor utilization and present opportunities for climate-resilient infrastructure, warehousing and storage, and numerous logistic improvements.
IT & TECH
The Philippines has a young and tech-savvy population and there is increasing integration of digital solutions and systems in order to make processes more efficient. This leads to numerous opportunities when it comes to cloud-based solutions, data analytics, business process software but also online payment solutions and cybersecurity systems.
SUMMARY:
Reasons for doing business in The Philippines:
- Stable and sustained economic growth
- Numerous promising industries
- Longer-term political security
- Extensive reform initiatives to increase the competitive position
- Willingness to attract foreign investors and increase the role of the private sector
- Young & digitally-engaged population