Doing business in the Philippines

THE Philippines is not only a good place to visit for rest and relaxation. More and more people are realizing that the Philippines is also a good place to start a business. This is because the country is located right in the heart of Asia, the fastest growing region in the world. It is located within four hours flying time from major capitals of the region. It also serves as a critical entry point to over 500 million in the ASEAN market and a gateway of international shipping and air lanes suited for European and American businesses.

There are many investment opportunities available in the Philippines because it is the natural and most strategic location for firms that want access to the large ASEAN market and its vast trade opportunities.

The Department of Trade and Industry (DTI) has identified 10 priority sectors or revenue streams for their inherent or proven competitiveness. The DTI expects vital growth in these sectors in the coming years, given specific firm-level and systems intervention.

PRIORITY SECTORS

Construction Materials. Top on the DTI’s list of priority sectors is construction materials. The industry is confident of winning material supply contracts in the local and international markets. The industry offers competitive price and quality, environment-friendly operations, good customer orientation, sales and delivery reliability and post sales service commitments.

Electronics. The electronics industry accounts for 69% of the total Philippine exports. In 2001 alone, the industry clocked a total of US$24 billion in export revenues. On the average, total electronic exports increased annually by 21% from 1996 to 2000.

Food. The Filipinos’ penchant for food has also made it another priority sector. This sector covers the production and processing of bananas, pineapple, mango, young coconut, papaya, watermelons, melons, pomelo, jackfruit, calamansi, lanzones, guavas, chico and santol.

Giftware and holiday décor. Philippine giftware and holiday decor have gained the acceptance of discriminating markets around the globe for innovativeness, trend-setting and excellent interpretations of designs and concepts.

Home furnishings. The home furnishings sector cover furniture and housewares What makes this a viable business opportunity is the fact that the Philippines has highly skilled workers who are able to produce and maintain a very high quality of craftsmanship. There is also an abundance of indigenous raw materials which are used for the production of these items.

IT and IT-enabled services. Over the years, there has been an increase in demand for the provision of quality services in low cost countries and regions. The Philippines emerged as a specific alternative to India because of historical and cultural factors. An investment consultancy firm has projected a bigger demand for outsourcing services that will reach US$180 billion in 2010.

Marine products. Not too many people know that the government has also placed marine products in its list of 10 priority sectors. The fishing industry contributed 3.9% to the country's Gross Domestic Product (GDP) in 2001. Its share to the country's Gross Value Added (GVA) in Agriculture, Fisheries and Forestry Group were 14.5% (PhP76.3 million, current prices) or 18.8 % (PhP35.8 million, constant prices), respectively. The sector employs 10% of the active labor force in agriculture and 5% of total labor force.

Motor vehicle parts and components. Another priority sector of the government, the automotive industry represents a significant portion of global economic activity with extensive upstream and downstream linkages to many diverse industries and sectors. In the past decade, the motor vehicle industry's contribution in output, employment, investments and exports have been increasing. Moreover, the synergy within the industry has strengthened the linkages between the motor vehicle assemblers and the motor vehicle parts and components manufacturers.