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. 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.

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2012-2017 Average Annual GDP Growth in % BRICS & Next-11

Short Introduction Young, growing and educated!

Philippine Economy

GDP Growth

SWOT-Analysis Philippine Economy Strengths

Well educated, English-speaking employees

Young & growing population

Increasing private Consumption

Strong service sector

Rich in mineral resources

Weaknesses

Relative weak manufacturing industry

Dependence on money transfers from Filipinos

working abroad

Complex administration

Poor infrastructure

High poverty

Opportunities

Announcement of PPP-projects

Expanding investments in the energy sector

Increasing number of infrastructure projects

Growing outsourcing sector

Developing healthcare sector

Threats

Insufficient legal certainty

Corruption

High dependence on imports

Natural disasters

Source: Germany Trade & Invest

Actual and trend GDP growth

54.4% 33.3%

12.3%

GDP by sector in % US$224.8bn nominal

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

Agriculture: Coconuts, rice,pineapples

Industry: Mining and extraction, electronics, aerospace, Automotive & shipbuilding

Interest rates and inflation

Emerging Opportunities in the Philippines

Year-on-year inflation rates

3m-on-3m inflation rates

-8 -6 -4 -2 0 2 4 6

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80+

Germany

Philippines

Male / Female in million

Population in 2011: 94.9m; Average age 23.1years;

Official growth rate 1.9%

Sources: IMF and GS

Sources: World Bank

Repo rate is the discount rate at which a central bank repurchases government securities

PEZA Special Economic Zones

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

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

1. Trading, air & sea freight, cargo forwarders 2. Pharmaceuticals, medical, dental, optical manufacturing 3. Automotive, machines, components 4. Engineering, metal works, plants, equipment 5. Textiles, clothing, accessories

Examples of German investments in the last years:

1. Futenco Philippines Corporation Manufacturing plant, 2012, USD 4m 2. Dedon Manfacturing, Inc. Manufacturing plant, 2008, USD 1.7m 3. Weener Plastop Asia, Inc. Manufacturing plant, 2007 & 2010, USD 8.5m

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 Germany’s missions abroad, such as embassies, consulates and ministries, GPCCI officially represents the interests of Germany’s industry and commerce as a reliable partner and in respect of all political and administration authorities.

Please contact us for detailed information or any questions! Nadine Fund GENERAL MANAGER German-Philippine Chamber of Commerce and Industry, Inc. 8/ F Dӧhle Haus Manila 30-38 Sen. Gil Puyat Avenue Barangay San Isidro Makati City 1234, Philippines Tel +63-2-336 6845 / 585 9713 Fax +63-2-310 3656 email nadine.fund@gpcci.org web www.gpcci.org

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Exports in % of total value to Germany Value of USD 2.01bn 2011 (total PH export of USD 48.3bn)

Electronics

Electrotechnology

Process measuring & control tech

Food products

Textiles & clothing

Metal goods

Other

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Imports in % of total value from Germany Value of USD 1.25bn in 2011 (total PH import of USD 60.5bn)

Electronics

Machines

Chemical products

Vehicles & parts

Electrotechnology

Food products

Process measuring & control tech

Other

Partners in Trade

German companies in PH

German-Philippine Chamber of Commerce and Industry (GPCCI)

Philippine Investment Incentives

GPCCI

German multi-

nationals

German SMEs

German speaking

companies

PH products „Made in Germany“

Philippine credit ratings outlook

Fitch’s BB+ stable

Standard & Poor’s BB+ positive

Moody’s Ba1 stable

Source: Germany Trade & Invest

Bilateral Commerce & Industry development