Emerging Opportunities in the Philippines

Short Introduction

The Philippines is an archipelago of 7107 islands, about 100

inhabited, a total land area of 300,000 sq. km and has a tropical
climate.
Named after Philip II of Spain, the Philippines stayed for more than
300 years a Spanish colony. It become the first republic in Asia
through military support of the USA in 1898.

Young, growing and educated!

80+
70
Male / Female in million
Germany
Philippines

60
50
40

Nowadays The country is enjoying an 'era of moderation': interest

rates are at around 4 percent, inflation is barely above 3 percent,
and the debt-to-GDP ratio is at a historic low .
In 2013 the Philippines have a growing population and according to
IBM the Philippines has surpassed India as the world leader in
business process outsourcing.

30
20
10
0-4

-8

-6

Philippine Economy

-4

-2

Population in 2011: 94.9m;

Average age 23.1years;
Official growth rate 1.9%

Sources: World Bank

Interest rates and inflation

GDP by sector in %
US$224.8bn nominal
Agriculture:
Coconuts,
rice,pineapple
s
Industry:
Mining and
extraction,
electronics,
aerospace,
Automotive &
shipbuilding

12.3%

33.3%

54.4%

Services:
Mostly business
process outsourcing:
Call centers services,
financial services,
logistics,
accounting, software
development
Employees: 900,000+

3m-on-3m inflation
rates
Year-on-year inflation
rates
Repo rate is the
discount rate at
which a central bank
repurchases
government securities

GDP Growth
Actual and trend GDP growth

2012-2017 Average Annual GDP Growth in %

BRICS & Next-11

8.4

6.7 6.7 6.5 6.5 6.3

4.9 4.7

3.9 3.8 3.7 3.7 3.5

3.4

Iran

Mexico

Pakistan

Brazil

Korea

Russia

Turkey

Egypt

Philippines

India

Vietnam

Indonesia

Bangladesh

Nigeria

China

1.2

Sources: IMF and GS

SWOT-Analysis Philippine Economy

Strengths

Well educated, English-speaking employees

Young & growing population

Increasing private Consumption

Strong service sector

Rich in mineral resources

Opportunities

Announcement of PPP-projects

Expanding investments in the energy sector

Increasing number of infrastructure projects

Growing outsourcing sector

Developing healthcare sector

Weaknesses

Relative weak manufacturing industry

Dependence on money transfers from Filipinos

working abroad

Complex administration

Poor infrastructure

High poverty
Threats

Insufficient legal certainty

Corruption

High dependence on imports

Natural disasters
Source: Germany Trade & Invest

Bilateral Commerce & Industry development

Philippine Investment Incentives

German companies in PH

PEZA Special Economic Zones

Top sectors in which German companies are listed in the Philippines:

Income Tax and Local Tax Holiday: for 3 to 8 years

5% tax on gross income
Exemption export taxes and fees and simplified import/export
procedures
Permanent resident status
2011: P657.23bn

1.
2.
3.
4.
5.

Trading, air & sea freight, cargo forwarders

Pharmaceuticals, medical, dental, optical manufacturing
Automotive, machines, components
Engineering, metal works, plants, equipment
Textiles, clothing, accessories

2012: P672.25bn (+2.29%, USD 15.5bn)

Philippine credit ratings

Fitchs
BB+
Standard & Poors
BB+
Moodys
Ba1

Examples of German investments in the last years:

1.

outlook
stable
positive
stable

2.
3.

Futenco Philippines Corporation

Manufacturing plant, 2012, USD 4m
Dedon Manfacturing, Inc.
Manufacturing plant, 2008, USD 1.7m
Weener Plastop Asia, Inc.
Manufacturing plant, 2007 & 2010, USD 8.5m

Partners in Trade
Imports in % of total value from Germany

Exports in % of total value to Germany

Value of USD 1.25bn in 2011 (total PH import of USD 60.5bn)

Value of USD 2.01bn 2011 (total PH export of USD 48.3bn)

Electronics
18.9

3
3.2

Chemical products

30.4

Vehicles & parts

15.9

5
5.7

13.4
6.9

Electrotechnology

2.5

Process measuring & control tech

5.9

Food products

Electrotechnology

Textiles & clothing

9.1

Food products

3.8

Electronics

15.6

Machines

60.7

Process measuring & control tech

Metal goods
Other

Other
Source: Germany Trade & Invest

German-Philippine Chamber of Commerce

and Industry (GPCCI)

Please contact us for detailed information or any questions!

German-Philippine Chamber of Commerce and Industry (GPCCI)

supports the economic relationship between the Philippines and
Germany and promotes bilateral commerce and industry
developments for more than 5 years. By providing competent services
and solutions, by representation of members interest by building
gateways to new markets and technology, by extensive expert
networking and by providing a platform for information exchange we
have developed a network of more than 170 members within the
German Philippine business community.
Together with Germanys missions abroad, such as embassies,
consulates and ministries, GPCCI officially represents the interests of
Germanys industry and commerce as a reliable partner and in
respect of all political and administration authorities.

Nadine Fund
GENERAL MANAGER
German-Philippine Chamber of Commerce and Industry, Inc.
8/ F Dhle Haus Manila
30-38 Sen. Gil Puyat Avenue
Barangay San Isidro
Makati City 1234, Philippines
Tel
Fax
email
web

+63-2-336 6845 / 585 9713

+63-2-310 3656
nadine.fund@gpcci.org
www.gpcci.org

German
multinationals

PH products
Made in
Germany

GPCCI

German
speaking
companies

German
SMEs