Fostering Competitiveness of the Philippines to attract Foreign Direct Investments from the US

US and Philippines: Foreign Direct Investments

Team 9 Consultants Inc.Topnotch Global Talent

Fostering Competitiveness of the Philippines to Attract Foreign Direct Investments


Outline of Business Report Presentation


1.0 Overview of post-financial crisis economy !2.0 Philippine introduction !3.0 Competitiveness and Growth !4.0 Foreign Direct Investment Trends !5.0 Hurdles for the Philippines !6.0 Public Policy and Government Action Recommendations !7.0 Conclusion

2008 Financial Crisis


2.8M people lost jobs !Banks closed. Companies froze. !U.S. slowed down -8.3% GDP decline !Europe was in crisis !Asian Market Decline !


1.0 Overview of the post-financial crisis economy

SHIFT OF MOMENTUM FROM

WEST TO EAST



Foreign Direct Investment in the United States and U.S. Direct Investment Abroad, Annual Inflows and Outflows, 1990-2011 (in billions of dollars)

Ripples of financial crisis seemed to have missed the Philippines



2.0 Philippines

Growth in GDP

Real Estate Boom Fuelled by Low Lending Rates


source: http://brycggroup.com/category/bgperspectives/

http://brycggroup.com/category/bgperspectives/

Deepening Capital Markets


http://quotes.wsj.com/PH/XPHS/PSEI/index-interactive-chart

http://quotes.wsj.com/PH/XPHS/PSEI/index-interactive-chart

Good Governance = Good Economics


Growing Tourism Industry


3.0 Competitiveness and Growth


3.0 Competitiveness and Growth


In our analysis, we focused on the potential growth of

certain sectors in the Philippines by understanding the

measures and factors that have been critical for

building certain competitive edges.

4.0 Trends of Foreign Direct Investments


Convenience of Doing Business


Starting a business 175 170 16Dealing with construction permits 88 99 43Getting electricity 121 33 21Registering property 101 121 35Getting Credit 86 86 1Protecting Investors 52 128 4Paying taxes 137 131 36Trading Across Borders 54 42 5Enforcing Contracts 147 114 30Resolving insolvency 144 100 42

Labor and Employment


Literacy Rate


96.7% 93.5% 93.1%

Infrastructure


Infrastructure Rank (out of 148) Score(1-7)

Philippines 96 3.4

Malaysia 29 5.2

Indonesia 61 4.2

Tax and Ownership Structure


Infrastructure Rank (out of 148)

Philippines 86

Malaysia 14

Indonesia 61

Growing Consumption


Philippines has a relatively high percentage of

private consumption in terms of contribution

to GDP (12%).

Non-economic Factors


Country Economic Impact (per highest impact disaster)

People Killed (per common disaster)

People Affected (per common disaster)

$29 million 123 477,641

$34 million 6 17,614

$11.3 million 2,360 111,101

4.0 Hurdles for the Philippine Government



(1) High levels of corruption, strict labor laws, and bureaucracy in business approvals

35 days 6 days 48 days



(2) Insufficient Investment In Infrastructure


Land Telecommunications Electricity


(3) High Tax Rates


46.6% 24.5% 34.5%


(4) Non-economic Factor


Need for a sustainable supply chain and logistics during natural disasters

5.0 Public Policy and Government Action Recommendation




(1) Higher Investment in Education and Proper Implementation of K-12 Curriculum



(2) Proper Execution of Imposed Prudent Measures and Risk Management Practices by the Central Bank



(3) Restructure Tax Rates



(4) Push for Transparency and Accountability



(5) Continue Additional Spending on Infrastructure and R&D



(6) Tilt the Playing Field through Incentives



(1) Higher Investment in Education and Proper Implementation of K-12 Curriculum

(2) Proper Execution of Imposed Prudent Measures and Risk Management Practices by the Central Bank

(3) Restructure Tax Rates(4) Push for Transparency and Accountability(5) Continue Additional Spending on Infrastructure and R&D(6) Tilt the Playing Field through Incentives

6.0 Conclusion


The Philippines, given its current momentum and position in the global economy, can be more competitive by pushing for proper public policy changes, structural

actions and smooth execution.

Economy & Finance

Fostering Competitiveness of the Philippines to attract Foreign Direct Investments from the US