By Harry Handley
Under the Foreign Investment Act, 1991, which was amended in 2015, a vast majority of industries in the Philippines are completely open to overseas investment, allowing 100 percent foreign ownership in most cases. The country managed to attract over US$ 7 billion of FDI in 2016, 25 percent more than the previous year. The UNCTAD World Investment Prospects survey positions the Philippines as the 11th most promising host country for investment over the period 2016-18. In order to best leverage the advantageous conditions, such as widely spoken English and access to the ASEAN Economic Community, the most effective market entry model must be chosen by entrants.
By: Dezan Shira & Associates
The Philippines Bureau of Immigration (BI) has launched a Visa Upon Arrival (VUA) program for Chinese nationals. As part of the program, the BI will issue “landing visas” to Chinese travelers upon their arrival at the airport of their destination. The program will be implemented in the capital Manila’s Ninoy Aquino International Airport (NAIA) as well as Clark International Airport, Mactan-Cebu International Airport and at Kalibo International Airport. The VUA scheme will also be extended to Chinese travelers arriving at the Manila, Puerto Princesa, Subic, Laoag, and Caticlan seaports.
By Dezan Shira & Associates
Editor: Vasundhara Rastogi
Foreign nationals planning to work in the Philippines are required to secure a work visa, which can be obtained from the Philippines’ Bureau of Immigration (BI), as well as an Alien Employment Permit (AEP) issued by the Department of Labor and Employment (DOLE).
Alien Employment Permit
An Alien Employment Permit (AEP) authorizes a foreign national to work in the Philippines. Though not a work permit, AEP is an important legal document required to secure a work visa in the country.
Some foreign nationals are exempted from obtaining an AEP. These include:
- All members of the diplomatic service and foreign government officials;
- Owners and representatives of foreign principals whose companies are accredited by Philippines Overseas Employment Administration (POEA); and
- Permanent resident foreign nationals and probationary or temporary resident visa holders under the Philippines’ immigration law.
Op-ed by Bob Shead
In the second part of this article, I will discuss the various sectors of the Philippine tourism industry. The first part of the article, covering the opportunities and incentives for foreign investors in the tourism industry, can be read here.
The main sectors of tourism in the Philippines are:
Casino and Gambling
The gaming/casino industry in the Philippines is becoming more developed, on the back of growing supply and heightened competition, a recent independent report stated. The Philippine Amusement and Gaming Corporation (PAGCOR), the gaming industry regulator, has said that the casino industry continues to grow. This has led to an 18.1 percent increase in PAGCOR’s net income in 2016 to P4.46 billion (US$89 million) from gaming operations. The total gaming revenues in 2016 increased by 22.9 percent to P53.31 billion (US$1.06 billion). PAGCOR also owns and operates 13 casinos in the Philippines, including three in Manila.
Op-ed by Bob Shead
In this article, I would like to attempt to cover the main aspects of the Philippine Tourism Industry and the potential for investment. The tourism industry was worth approximately 8.6 percent of the country’s Gross Domestic Product (GDP) in 2016, compared to 8.2 percent in 2015. Foreign investment in the tourism industry in 2016 was P184 billion (US$3.7 billion) and was mainly into 20 major projects involving resorts and hotels. Employment in the Philippine tourism sector is currently just over 5 million workers. Compared to the previous year, the monthly figures for tourist arrivals has increased by 5.5 percent in 2017, with the current monthly figures at Philippine airports standing at 580,000 travelers. This will give an annual projected figure of 7 million tourist arrivals by air for 2017.
The latest issue of ASEAN Briefing Magazine titled, “How to Set Up in the Philippines“, is out now and available to subscribers as a complimentary download in the Asia Briefing Publication Store.
In this issue of ASEAN Briefing
- Political, Economic, and Social Introduction to the Philippines
- Entering the Philippine Market: Comparing Models
- Corporate Establishment in the Philippines: A Step-by-Step Guide
- Using Singapore as a Gateway to the Philippines
By: South-East Asia IPR SME Helpdesk
Although the Philippines has slipped behind other ASEAN nations in automotive market size and though lacking in major domestic brands, the country’s massive exports of electronics and metal goods still make it a significant part of the international automotive supply chain. Currently, over 250 automotive companies operate in the Philippines, with foreign businesses largely represented by Japanese firms. Automotive exports created a net trade surplus of US$ 2.7 billion in 2010 and reached a total market size of US$ 3.5 billion in 2012. For automotive firms, these exports include many humble but critical components such as ignition wiring sets, intake air filters, clutch pedals, and radio receivers. Other exports are more immediately recognizable, including pneumatic tires, lead-acid storage batteries, and transmissions. Alongside these automotive staples are integrated circuits, the electronic brains which will form a critical part of the worldwide automotive industry’s adoption of self-driving cars. Many of these more sophisticated parts are produced not by automakers themselves but rather by smaller specialized contractors.
While the Philippine intellectual property regime stands head and shoulders above some of its other ASEAN counterparts, automakers or automobile component companies which source their products from the Philippines will still encounter challenges. Enforcement in the Philippines lags behind that of more developed markets, and there are always difficulties inherent in negotiating IP contracts with local partners. Nonetheless, with careful IP protection and a smart IP management strategy SMEs can reap the benefits of the Philippines’ comparative advantage in relative safety. To do so, a company must focus on three key elements: patents for key technology, especially in propulsion systems which will play a central role in international fuel efficiency design competition; semiconductor topography designs (integrated circuit layout-designs) for electronics which will give smart cars eyes and ears to manoeuvre safely and control their components; and copyrights for computer codes which will run on those electronics.
Op-ed by Bob Shead
In this article, I will discuss and explain the advantages and potential business opportunities of solar energy in the Philippines. There has been a general expansion in solar power generation in Asia as opposed to Europe and the rest of the world, and ASEAN countries, including the Philippines have a greater growth potential. Current electricity costs in the Philippines are the highest in Asia, including Japan. This makes solar power a much cheaper and economically more advantageous option in the Philippines. The Philippines is a country of 102 million people, and is a relatively fast growing Asian economy, and it is anticipated that 7000MW of power generation will be added over the next five years.
An estimated 16 million people are off the grid with regards to current electricity supply, and this includes approximately 6000 schools. This demonstrates the potential for supplying solar power to the Philippines. Residents in off grid areas, are beginning to arrange the finance to purchase solar panels, batteries etc. A friend recently mentioned to me that his golf caddie, who lives in a local off grid village, near the golf course, had invested in two solar panels with batteries, at a cost of about P5000 (US$100), and this has supplied her house with electricity for lights, fans, a small refrigerator and a TV. The Philippine Government has also committed to a 70% reduction in carbon emissions by 2030 and has a 15.3GW renewable energy target, thus encouraging a large increase in solar power as an energy source.
By Bradley Dunseith
The Philippines is an archipelago comprising of 7,641 islands. The country shares maritime borders with China, Indonesia, Japan, Malaysia, Taiwan, Vietnam, and the island nation of Palau. In 2015, the Philippines exported goods valued at US$77.9 billion and imported products worth US$76.8 billion. The Philippines’ top export destinations are China, Japan, the United States, and Singapore; and the country’s top import partners are China, Japan, Korea, the United States, and Thailand. In this article we explain best practices for importing into and exporting out of the Philippines.
Philippines: Tax incentives announced for companies going green
The Philippines Board of Investment (BOI) has announced that it is planning to introduce tax incentives for companies going green. The initiative under the Climate Incentives for Manufacturing (CLIMA) program will target firms in the manufacturing sector. To qualify, enterprises should promote energy efficiency and use technology that reduces greenhouse gas emissions. While the exact nature of the incentives are not known, they are likely to be in the form of capital equipment incentives and income tax holidays.