It’s more fun to invest in the Philippines
There could be no better proof that the Philippines has emerged as one of the most popular investment destinations in Southeast Asia than the bare facts. According to Switzerland’s largest and most reputable bank, Credit Suisse, the Philippines so far this year was the clear winner among member countries of the Association of Southeast Asian Nations, or ASEAN, in attracting foreign direct investments.
A newly released report by the bank says that foreign direct investments inflow into the Philippines stood at a multi-decade high of $8 billion as of end-April, up from $6 billion in 2015 and $1 billion just five years ago.
The high number derives from ever-increasing investment activity mainly from Japan and the US, countries seen as key drivers behind the growth, with inflows being concentrated on the manufacturing and the finance industry. For those two and other global investors, China has becomes a less attractive destination for inflows, Credit Suisse said, adding that other previous foreign direct investment favourites in the region such as Indonesia, Singapore and Thailand also saw some weakening trends. In particular, the Philippines surpassed foreign direct investments inflows to Thailand this year for the first time in recent history as the latter country is held up by its political and societal plight that continues to block economic development.
The interesting thing is that Credit Suisse is not alone with its stance on the Philippines as a bright place for investments. The United Nations Conference on Trade and Development, or UNCTAD, in its World Investment Report 2016 launched this June highlighted the Philippines as “one of the world’s most prospective investment destinations for multinational enterprises until 2018,” i.e. with regards to its medium-term investment prospects.
The report is based on a survey among decision makers at multinational enterprises who were asked to name their preferred global investment destinations for the period 2016 to 2018, and the Philippines occupied a flattering eleventh rank. It is the first time that the Philippines even made it on that list, and now competes with established investment destinations such as the US, China, India, UK, Germany, Japan, Brazil, Mexico and – regionally – Indonesia and Malaysia, as well as another new favourite, Myanmar.
But what is it that makes the Philippines such a solid investment hub, and what does that mean for long-term investments and returns?
According to Ceferino S. Rodolfo, Undersecretary for the Industry Development Group of the Philippines’ Department of Trade and Industry and Vice Chairman and Managing Head of the Board of Investments, good governance and transparency of government and trade bodies lead to continued impressive growth rates in the recent past, which are, in turn, contributing to the confidence of foreign investors at a time when many other emerging markets in the region are struggling with slowing growth and capital outflows.
The Philippines posted solid growth of 5.8 per cent in 2015 and is expected to grow at least six per cent in 2016 and 2017 as per a forecast by the Asian Development Bank. In the first quarter of the year, GDP growth even reached a high of 6.9 per cent, more than most other nations in Asia in that quarter, and for the first time topping China’s growth rate.
The strong growth has been attributed to the macroeconomic policies of the former administration of President Benigno Aquino III that led to the nation’s first investment-grade ratings and its best period of growth since the 1970s. Over the past five years, the country’s investment grade level was raised by two notches by all major credit rating agencies Fitch, Moody’s and Standard & Poor’s with stable outlooks. That said, new President Rodrigo Duterte has pledged to retain the economic priorities of his predecessor and to continue incentivizing foreign direct investment.
One such priority is the Philippine Economic Zone Authority (PEZA), which offers a unique opportunity for multinational enterprises to reap the benefits of operational savings, tax benefits and other fiscal advantages.
Requiring only a simple registration, multinational enterprises located within PEZA’s Special Economic Zones are eligible for a flat overall tax rate of only 5per cent.
Reputable developer Century Properties Inc. has been at the forefront of the PEZA initiative. The PEZA-accredited Century Spire Offices allow multinational enterprises to enjoy fiscal subsidies in the heart of the bustling business district of Makati.
While good governance and favourable macroeconomic policies indeed put the Philippines in the focus of investors and boosted the country’s economic performance to sustained record levels since 2010, there are also other factors that shine a sweet spotlight on the country in terms of business and investment opportunities:
The large number of young, hardworking, dependable, diligent, highly-skilled, English-speaking Filipinos who are the Philippines’ greatest asset for long-term economic growth prospects, in addition to the country’s strategic location in East Asia, its robust and continuously improving infrastructure, renewed global demand for local products resulting in steady export growth, competitive living and business costs and its pleasant lifestyle.
Particularly the latter is enticing for many because it – of course – shouldn’t be all just about business. The Philippines is a great destination to spend leisure time as well, with its warm and enjoyable climate.
Composed of more than 7,000 tropical islands, the Philippines is laden with beautiful beaches and is ripe with cultural heritage. Recreational options include diving, hiking, sailing, surfing, and golfing at one of many world class golf courses.
Overall, it couldn’t be a better time to invest in the Philippines!
There could be no better proof that the Philippines has emerged as one of the most popular investment destinations in Southeast Asia than the bare facts. According to Switzerland’s largest and most reputable bank, Credit Suisse, the Philippines so far this year was the clear winner among member countries of the Association of Southeast Asian Nations, or ASEAN, in attracting foreign direct investments. A newly released report by the bank says that foreign direct investments inflow into the Philippines stood at a multi-decade high of $8 billion as of end-April, up from $6 billion in 2015 and $1 billion just...
There could be no better proof that the Philippines has emerged as one of the most popular investment destinations in Southeast Asia than the bare facts. According to Switzerland’s largest and most reputable bank, Credit Suisse, the Philippines so far this year was the clear winner among member countries of the Association of Southeast Asian Nations, or ASEAN, in attracting foreign direct investments.
A newly released report by the bank says that foreign direct investments inflow into the Philippines stood at a multi-decade high of $8 billion as of end-April, up from $6 billion in 2015 and $1 billion just five years ago.
The high number derives from ever-increasing investment activity mainly from Japan and the US, countries seen as key drivers behind the growth, with inflows being concentrated on the manufacturing and the finance industry. For those two and other global investors, China has becomes a less attractive destination for inflows, Credit Suisse said, adding that other previous foreign direct investment favourites in the region such as Indonesia, Singapore and Thailand also saw some weakening trends. In particular, the Philippines surpassed foreign direct investments inflows to Thailand this year for the first time in recent history as the latter country is held up by its political and societal plight that continues to block economic development.
The interesting thing is that Credit Suisse is not alone with its stance on the Philippines as a bright place for investments. The United Nations Conference on Trade and Development, or UNCTAD, in its World Investment Report 2016 launched this June highlighted the Philippines as “one of the world’s most prospective investment destinations for multinational enterprises until 2018,” i.e. with regards to its medium-term investment prospects.
The report is based on a survey among decision makers at multinational enterprises who were asked to name their preferred global investment destinations for the period 2016 to 2018, and the Philippines occupied a flattering eleventh rank. It is the first time that the Philippines even made it on that list, and now competes with established investment destinations such as the US, China, India, UK, Germany, Japan, Brazil, Mexico and – regionally – Indonesia and Malaysia, as well as another new favourite, Myanmar.
But what is it that makes the Philippines such a solid investment hub, and what does that mean for long-term investments and returns?
According to Ceferino S. Rodolfo, Undersecretary for the Industry Development Group of the Philippines’ Department of Trade and Industry and Vice Chairman and Managing Head of the Board of Investments, good governance and transparency of government and trade bodies lead to continued impressive growth rates in the recent past, which are, in turn, contributing to the confidence of foreign investors at a time when many other emerging markets in the region are struggling with slowing growth and capital outflows.
The Philippines posted solid growth of 5.8 per cent in 2015 and is expected to grow at least six per cent in 2016 and 2017 as per a forecast by the Asian Development Bank. In the first quarter of the year, GDP growth even reached a high of 6.9 per cent, more than most other nations in Asia in that quarter, and for the first time topping China’s growth rate.
The strong growth has been attributed to the macroeconomic policies of the former administration of President Benigno Aquino III that led to the nation’s first investment-grade ratings and its best period of growth since the 1970s. Over the past five years, the country’s investment grade level was raised by two notches by all major credit rating agencies Fitch, Moody’s and Standard & Poor’s with stable outlooks. That said, new President Rodrigo Duterte has pledged to retain the economic priorities of his predecessor and to continue incentivizing foreign direct investment.
One such priority is the Philippine Economic Zone Authority (PEZA), which offers a unique opportunity for multinational enterprises to reap the benefits of operational savings, tax benefits and other fiscal advantages.
Requiring only a simple registration, multinational enterprises located within PEZA’s Special Economic Zones are eligible for a flat overall tax rate of only 5per cent.
Reputable developer Century Properties Inc. has been at the forefront of the PEZA initiative. The PEZA-accredited Century Spire Offices allow multinational enterprises to enjoy fiscal subsidies in the heart of the bustling business district of Makati.
While good governance and favourable macroeconomic policies indeed put the Philippines in the focus of investors and boosted the country’s economic performance to sustained record levels since 2010, there are also other factors that shine a sweet spotlight on the country in terms of business and investment opportunities:
The large number of young, hardworking, dependable, diligent, highly-skilled, English-speaking Filipinos who are the Philippines’ greatest asset for long-term economic growth prospects, in addition to the country’s strategic location in East Asia, its robust and continuously improving infrastructure, renewed global demand for local products resulting in steady export growth, competitive living and business costs and its pleasant lifestyle.
Particularly the latter is enticing for many because it – of course – shouldn’t be all just about business. The Philippines is a great destination to spend leisure time as well, with its warm and enjoyable climate.
Composed of more than 7,000 tropical islands, the Philippines is laden with beautiful beaches and is ripe with cultural heritage. Recreational options include diving, hiking, sailing, surfing, and golfing at one of many world class golf courses.
Overall, it couldn’t be a better time to invest in the Philippines!
