3/F, Grand Ballroom, Section II Grand Hyatt Taipei, Taipei, Taiwan 9:00 AM, March 27, 2015 3/F,...

3/F, Grand Ballroom, Section IIGrand Hyatt Taipei, Taipei, Taiwan

9:00 AM, March 27, 2015

3/F, Grand Ballroom, Section IIGrand Hyatt Taipei, Taipei, Taiwan

9:00 AM, March 27, 2015

A Presentation for the:

“OPPORTUNITIES FOR TAIWANESE INVESTORS IN PHILIPPINE

ECONOMIC ZONES”

PHILIPPINE INVESTMENT SEMINAR

by

DR. LILIA B. DE LIMAPEZA Director General and

Undersecretary, Department of Trade and Industry

• Attached to the Department ofAttached to the Department ofTrade and IndustryTrade and Industry

• Promotes InvestmentsPromotes Investments

• Creates EmploymentCreates Employment

• Generates ExportsGenerates Exports

Philippine Economic Zone Authority (PEZA)

68 Industrial and Export Processing Zones

43 IT Parks

166 IT Centers

19 Tourism Ecozones

2 Medical Tourism Parks

19 Agro-Industrial Parks As of Jan 2015

317 Economic Zones Nationwide

LOCATOR INVESTMENTS BY NATIONALITY( 1995 – 2014 )

22.78 % Filipino

15.87 % American

7.98 % British

10.29 % Dutch

3.07 % Singaporean 1.60 % German

4.35 % Others

3.39 % Korean

0.96 % Swiss

29.71 % Japanese

LOCATOR INVESTMENTS BY PRODUCT SECTOR( 1995 – 2014 )

Metals/Fabricated Metal Products

Transport (Shipbuilding, Car Parts, Equipment)

Electrical Machineryand Apparatus

Medical, Precision andOptical Instruments

Tourism

Rubber and Plastic Products

Other Manufactures

6.00 %

4.58 %

2.43 %

8.94 %

1.43 %

18.79 %

Information Technology Services

Medical Tourism1.31 %

9.29 %

9.78 %

37.45 %Electronics /

Semiconductors

WHY PHILIPPINES

PHILIPPINE STRENGTHS

6.1% GDP Growth, 2nd Highest in Asia in 2014

100 Million Population as of July 27, 2014

PHILIPPINE STRENGTHS

Investment Grade Credit Rating

PHILIPPINE STRENGTHS

Investment Grade Credit Rating

PHILIPPINE STRENGTHS

Investment Grade Credit Rating

Rating and Investment Information, Inc.

PHILIPPINE STRENGTHS

Investment Grade Credit Rating

PHILIPPINE STRENGTHS

Investment Grade Credit Rating

• High literacyHigh literacyrate of 94.6%rate of 94.6%

• EnglishEnglishspeakingspeaking

The Filipino Work Force

• Easy to trainEasy to train

• HardworkingHardworking

The Filipino Work Force

• Very friendlyVery friendly

The Filipino Work Force

Filipino Workers are considered

Global Knowledge Workers

because they are intelligent and

able to compete at the highest

levels among the best in the world.

In the I.T. Sector

1 million Filipinos reach working age every 1 million Filipinos reach working age every year, and half of them are college year, and half of them are college

graduates.graduates.

The Filipino Work Force

• Basic rights of Investors are guaranteed:Basic rights of Investors are guaranteed: Right to remit profitsRight to remit profits Right to pay foreign obligationsRight to pay foreign obligations Right to repatriate investmentsRight to repatriate investments

• 100% Foreign ownership of companies100% Foreign ownership of companies

Foreign Investor-Friendly Policies

STRATEGIC LOCATIONSTRATEGIC LOCATION

Russia

EUROPE United Statesof America

SouthAmerica

Pacific Ocean

Atlantic Ocean

Australia

JapanKoreaChina

IndiaAfrica

Taiwan

Hong Kong Philippines

ThailandMalaysiaSingapore

Indonesia

Germany

France

UnitedKingdom

Canada

MiddleEast

New Zealand

HOSPITABLE and COMFORTABLESECOND HOME

(Result of a survey conducted on expatriates in Asia)

Very friendly attitude of Filipinos

(Result of a survey conducted on expatriates in Asia)

Housing at very reasonable

rates

(Result of a survey conducted on expatriates in Asia)

International schools for

expatriates' children

(Result of a survey conducted on expatriates in Asia)

Best sporting and

recreational facilities

(Result of a survey conducted on expatriates in Asia)

World class health services

WHY PEZA

1.1. Income Tax Holiday (ITH)Income Tax Holiday (ITH) 6 to 8 years for pioneer project6 to 8 years for pioneer project 4 to 6 years for non-pioneer4 to 6 years for non-pioneer

projectproject

2.2. After the ITH - Special 5% tax onAfter the ITH - Special 5% tax ongross income less allowablegross income less allowabledeductions in lieu of all nationaldeductions in lieu of all nationaland local taxesand local taxes

Incentives

3. Tax and duty free importation of3. Tax and duty free importation of capital equipment, spare parts, capital equipment, spare parts, supplies and raw materials supplies and raw materials

4. Domestic sales allowance of up4. Domestic sales allowance of up to 30% of total sales to 30% of total sales

Incentives

5.5. Zero Value Added Tax (VAT) RateZero Value Added Tax (VAT) Rateon all local purchases to includeon all local purchases to includetelecommunications, power andtelecommunications, power andwater billswater bills

6.6. Exemption from payment of localExemption from payment of localgovernment taxes and feesgovernment taxes and fees

Incentives

7.7. Employment of foreign nationalsEmployment of foreign nationals

8.8. Special visa for foreign investorsSpecial visa for foreign investorsand immediate family membersand immediate family members

9. Unequalled service by PEZA

Incentives

THE THE PEZAPEZA

BRAND BRAND OF OF

SERVICESERVICE

Building and Occupancy PermitsBuilding and Occupancy Permits

Import and Export PermitsImport and Export Permits

Online Import and ExportOnline Import and ExportProcedures and E-Payment SystemProcedures and E-Payment System

1. PEZA is a One-Stop Shop

Special multiple-entrySpecial multiple-entrynon-immigrant Visanon-immigrant Visa

Environment Clearance Environment Clearance CertificateCertificate

Exemption from LocalExemption from LocalGovernment Permits and Government Permits and FeesFees

Simplified registration Simplified registration processprocess– forms can be downloaded– forms can be downloadedfrom websitefrom website

• Provides 24 hours a day, 7 daysProvides 24 hours a day, 7 daysa week of continuous servicea week of continuous service

• The Director General and otherThe Director General and othertop officials are on call 24 hourstop officials are on call 24 hoursa day, 7 days a weeka day, 7 days a week

2. PEZA is a Non-Stop Shop

NONO RED TAPERED TAPE

3. In PEZA, there is

ONLYONLY RED CARPETRED CARPETTREATMENTTREATMENT

3. In PEZA, there is

NO GRAFTNO GRAFT

NO CORRUPTIONNO CORRUPTION

4. In PEZA, there is

For all For all processes, processes, at all levels, at all levels, in all offices,in all offices,nationwide.nationwide.

PEZA is ISO 9001:2008 Certified

““Under PEZA, the Under PEZA, the Philippines has shown Philippines has shown dramatic improvements in dramatic improvements in Investment Climate.Investment Climate.

End Result – PEZA is a End Result – PEZA is a shining example of shining example of successful regulatory successful regulatory reform improving overall reform improving overall investment climate in the investment climate in the country.”country.”

IFC – World Bank cited only PEZA forBest Practice among Economic Zones

worldwide

Under President Under President Aquino’s “Daang Aquino’s “Daang Matuwid”Matuwid”(Straight Path) (Straight Path) Policy:Policy:

Good Good GovernanceGovernanceTransparencyTransparencyNo CorruptionNo Corruption

Reformist Government

Appreciation of Investment Environments

(December 2014)

JETRO 2014 Survey of Japanese-Affiliated Firms in Asia and Oceana

Less Linguistic/Communication Problems(%)

Source:2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

Easy to hire local staff(General worker/staff/clerk)

(%)

Source:2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

High Quality of Employees(General worker)

(%)

Source:2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

High Employee Retention Rates(%)

Source:2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

Tax Incentives(Corporate Tax Holidays etc.)

(%)

Source:2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

Country 2010 2011 2012 2013

China 90 185 382 656

Indonesia 192 196 51 239

Philippines 8 2 2 1

Thailand 3 14 12 11

Vietnam 423 981 468 327

(Unit: Number)

SourceChina: China Labour BulletinIndonesia: Ministry of Manpower and TransmigrationPhilippines: National Conciliation and Mediation BoardThailand: Department of Labour Protection and WelfareVietnam: Vietnam General Confederation of Labor

Number of Strikes/Lockouts

8 OUT OF THE WORLD’S TOP 20 CHIPMAKERSARE OPERATING IN THE PHILIPPINES

TIPI Philips Fairchild

Analog Sanyo On Semi Rohm

Source: SEIPI

TOP CHIPMAKER

Samsung

TOP HDD PRODUCER

FOUR OF THE LARGEST HDD PRODUCERS

IN THE WORLD ARE IN THE PHILIPPINES

Hitachi

Toshiba

Fujitsu NEC

Source: SEIPI

LEXMARK – produces 40 million printheads/year

AMKOR – manufactures IC packaging with 400 formats, from leadframe to BGA solutions

THE WORLD’S TOP ELECTRONICS FIRMS

Source: SEIPI

EPSON – one of the top 3 terminal printer production base of global Epson group, producing its 10 millionth printer

SUNPOWER – produces solar panels

CONTINENTAL – produces ABS, sensors

CEBU MITSUMI –manufactures computer peripherals and components such as CD-R, CD-RW, optical pick up

WITH HOMEGROWN SMS & EMS FIRMS

… and a cluster of homegrown ODMs time recorder, AVR, power supplies, alarm systems, electronic ballasts, testers, GPS tracking, automated toll collection, others

Notes:SMS – Semiconductor Manufacturing ServicesEMS – Electronics Manufacturing ServicesODM – Original Design ManufacturingAVR – Automatic Voltage RegulatorGPS – Global Positioning System

IMI Ionics PSI Fastech

Team

Source: SEIPI

TI (Philippines), Inc. Electronics American/Dutch

Taganito HPal Nickel Corp. Basic Metals Japanese

Toshiba Information Electronics Japanese

Tiger Resort Tourism American/Japan

Sunpower Philippines Solar Cells American/Cayman

Travellers International Tourism Filipino

Ibiden Philippines Electronics Japanese

Coral Bay Nickel Corp. Basic Metals Japanese

Amkor Technology Electronics Singapore/US

NXP Semiconductors Electronics Dutch

Canon Business Machines Electronics Japanese

Top Economic Zone Investors

MCE Leisure Corporation Tourism British Virgin Isl.

Epson Precision Electronics Japanese

PASAR Basic Metals Filipino

Rohm Electronics Electronics Singapore/Jap

HGST Philippines Electronics Dutch/Japanese

Samsung Electro-Mech Electronics Korean

Toyota Autoparts Automotive Japanese

St. Luke’s Medical Center Medical Tourism Filipino

Tsuneishi Heavy Ind Shipbuilding Japanese

STMicroelectronics, Inc. Electronics Swiss

Integrated Micro Electronics British

Top Economic Zone Investors

Convergys IT American

Panasonic Precision Electronics Dutch/Japanese

Sureste Properties Tourism Filipino

American Power Electrical Mach American

TDK Philippines Electronics Japanese

Taiyo Yuden Electronics Japanese

Lufthansa Technik Air Transport German

Pilipinas Kao, Inc. Chemical Products Japanese

Terumo Phil Medical Instrm’t Japanese

Nidec Philippines Electronics Japanese

Continental Temic Electronics German

Top Economic Zone Investors

Atlantic Gulf & Pacific Fabricated Metal Filipino

On Semiconductor Phils. Electronics American

Accenture, Inc. IT Dutch

Analog Devices Electronics Dutch

Green Future Innovations Agro-Industrial Japanese

JP Morgan Chase Bank IT American

Teletech IT American

Brother Industries Electronics Japanese

Schweitzer-Maudit Agro American

Xerox Business Services IT Dutch

Convergys Phils. Inc. IT Dutch

House Technology Electronics Singaporean/Japanese

Top Economic Zone Investors

66 Taiwanese Companies

in PEZA Economic Zones

(As of Jan 2015)

ELECTRONICS AND SEMICON COMPANIESTong Hsing Electronics (Philippines), Inc.Dyna Image Corporation PhilippinesKinpo Electronics (Philippines), Inc.Orient Semiconductor Electronics Philippines, Inc.Acbel Polytech Philippines, Inc.Leader Electronics (Philippine Branch), Inc.MEC Electronics Philippines CorporationLakepower Converter, Inc.High Well Electronics Mfg. CorporationUltra-Pak Philippines CorporationLinksphere Technologies, Corp

FABRICATED METAL PRODUCTS COMPANIESTaihan Precision Technology (Philippines) Co., Inc.Hor Sin Metal CorpVinox CorporationAsam Industries Inc.Rosario Fasteners CorporationPhilake Metal CorporationSK 10 Corporation

MEDICAL, PRECISION AND OPTICAL INSTRUMENTS COMPANIESBioteque Medical Phil., Inc.Tong Fang International, Inc.Asia Scorpio Optics Co., Inc.WEARING APPAREL, GARMENTS, TEXTILE COMPANIESMactan Apparels, Inc.Global Wear Manufacturing, Inc.Metro Wear Inc.Feeder Apparel CorporationPan-Phil Sportswear, Inc.Palmphil Garments Philippine CorporationFormosagarment Printing, Inc.Chi Hsing Hats & Caps, Inc.Good Enterprise CorporationExcellent Texscreeners, Inc.Philippine Unionlite Industrial CorporationBetter Phils. Apparel, Inc.Mactan Diamond Embroidery, Inc.Classic Computer Embroidery, Inc.

LEATHER, LUGGAGE, HANDBAGS, FOOTWEAR COMPANIESProbag Cebu Exports, Inc.St. Jane International, Inc.Sports Royal, Inc.Headway Caps International Co., Inc.Bagtrends International Corporation

RUBBER, PLASTIC, AND PAPER PRODUCTS COMPANIESShing Hung Plastics Company, Inc.Tsuchiya Kogyo (Phils.), Inc.Foxcolor Tech., Inc.Polaris Mold Fabrication CorporationFaith Achieve Plastics CorporationPhilbook Consumer Products Inc.Paul Deco Industrial Corporation

FURNITURE AND WOOD PRODUCTS COMPANIESApollo Sun CorporationGreenwood Home Décor, Inc.Paul Yu Philippines Corporation

LOGISTICS, FACILITIES, UTILITIES, RECYCLING COMPANIESTansunco Properties, Inc.Globalwear Manufacturing Inc.Formosawide Industries, Inc.Asia Pacific Energy CorporationOTKM Services Phils., Inc.TMC Metal Philippines, Inc.V-Tech Trading Logistics and Services Corp.Alicia Ann International, Inc.ELECTRICAL MACHINERY, CHEMICAL PRODUCTS COMPANIESCSB Battery Co., Ltd. (Philippine Branch)East Stacker Philippines CorporationBary’s Industrial CorporationJ.I.T. Injection Machinery Philippines Corp.

I.T. COMPANYXuenn Incorporated

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