Trade & Investment
From The Report: Philippines 2019
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The Philippines is a key bridge between the Americas and Asia, making it a natural conduit for global trade flows. The country also has some of the strongest economic growth rates in the Asia-Pacific region, with growth at 6% or more for 16 out of the 20 quarters between 2014 and March 2019. The nation will continue to have considerable demand for imports as major public infrastructure projects are rolled out and industries expand and move towards higher value-added products. Demand for intermediate goods, as well as building materials and finished products, is therefore high. At the same time, insufficient upstream output of oil, gas and coal means that energy imports are also growing as the economy expands. This chapter also contains interviews with Charito Plaza, Director-General, Philippine Economic Zone Authority; and Allard Nooy, CEO, InfraCo Asia.

Articles from this Chapter

Overview

Dynamic market: Local reforms and regional partnerships look set to improve the business environment for investors
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The Philippines is a key bridge between the Americas and Asia, making it a natural conduit for global trade flows. The country also has some of the strongest economic growth rates in the Asia-Pacific region, with growth at 6% or more for 16 out of the 20 quarters between 2014 and March 2019. The nation will continue to have considerable demand for imports as major public infrastructure projects are rolled out and industries expand and move towards higher value-added products. Demand for intermediate…

Interview

Developing incentives: Charito Plaza, Director-General, Philippine Economic Zone Authority (PEZA), on leveraging special economic zones (SEZs) to attract more foreign investment
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Interview:Charito Plaza How will the rationalisation of tax incentives in the proposed tax reform package affect foreign investment pledges in economic zones? CHARITO PLAZA: The goal and objectives of the Tax Reform for Attracting Better and High-Quality Opportunities (TRABAHO), as well as its transparency, performance-based and time-bound criteria, are very positive, but the strategy to implement the programme could be improved, especially when it comes to the incentive packages. The current…

Analysis

Striking a balance: With a rise in imports to support major infrastructure projects, a boost in exports is needed to narrow the trade deficit
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In 2018 the Philippines posted a record trade deficit of $41.4bn, the largest gap in the nation’s history. This was a major increase on previous years, compared to $27.4bn in 2017 and $26.7bn in 2016. However, the results from the first few months of 2019 suggest that the deficit is beginning to narrow. In April 2019 the balance of trade in goods decreased year-on-year for the first time that year, from $3.7bn to $3.5bn. The balance of imports and exports is affected by both domestic and external…

Analysis

Open for business: Recent legislative changes aim to attract foreign investment, raise standards and increase productivity
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With strong economic growth and an expanding portfolio of business opportunities, foreign direct investment (FDI) in the Philippines has been rising steadily in recent years, reaching a record high in 2017. However, a fall in FDI the following year indicates that maintaining investor interest is dependent on a variety of factors, including a regulatory and bureaucratic framework. In 2019 improvements to the business environment have taken centre stage, following the passing of the Ease of Doing Business…

Overview

Business Barometer: Philippines CEO Survey:
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The results of the latest OBG Business Barometer: Philippines CEO Survey shed light on how President Rodrigo Duterte’s tax reform packages have been received by the business community. Effective since January 1, 2018, the Tax Reform for Acceleration and Inclusion (TRAIN) programme has exempted many low-wage workers from income tax but was also partly blamed for causing inflationary pressures that year. Of the almost 100 C-suite executives that were surveyed, some 35% said TRAIN had affected local business conditions in a negative way, 33% gave a neutral response, 29% responded that it had a positive impact and 1% opted for very positive. For…

Overview

Philippine business leaders: have their say on the recent tax reforms
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Tax reform has been front and centre of President Rodrigo Duterte’s policy agenda since the combative former mayor of Davao City was elected to the Philippines’ highest office in 2016. Indeed, enhanced revenue mobilisation from a more efficient and effective tax system is seen by the Duterte administration as a key component of plans to address nationwide infrastructure gaps and deliver ambitious social programmes such as universal health care. While these big-picture policies should help foster inclusive and sustainable economic growth over the long term, the tax reforms that have been pushed through so far have been met with mixed reactions…

Interview

Built-in potential: Allard Nooy, CEO, InfraCo Asia, on opportunities to address the infrastructure gap in emerging Asia
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Interview:Allard Nooy How can low-income economies in Asia attract private investment while providing affordable tariffs? ALLARD NOOY: In the energy sector and in many countries, the user and ability-to-pay principle doesn’t exist; tariffs are co-subsidised. Typically, there exists an agreement between a ring-fenced power plant and either a ministry or a subset of state-owned enterprises and the power plant then sells to distributors. This is the case essentially across the whole region,…

Interview

Built-in potential: Allard Nooy, CEO, InfraCo Asia, on opportunities to address the infrastructure gap in emerging Asia
OBG
plus

Interview:Allard Nooy How can low-income economies in Asia attract private investment while providing affordable tariffs? ALLARD NOOY: In the energy sector and in many countries, the user and ability-to-pay principle doesn’t exist; tariffs are co-subsidised. Typically, there exists an agreement between a ring-fenced power plant and either a ministry or a subset of state-owned enterprises and the power plant then sells to distributors. This is the case essentially across the whole region,…