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Philippines – Improved Business Climate



Country Profiles - PhilippinesWith over 100 million people, the Philippines has the twelfth largest population in the world and is the fourth largest English-speaking country. It also has one of the youngest populations in the world, with more than two-thirds under the age of 35. Relatively high population growth (nearly two percent annually) will help drive economic growth for the next several years. The Philippine economy has weathered the global economic and financial downturn better than its regional peers due to minimal exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from four- to five-million overseas Filipino workers, and a rapidly expanding business process outsourcing (BPO) industry. Efforts to improve tax administration and expenditure management have helped ease the Philippines’ tight fiscal situation and reduce high debt levels. The Philippines has received several credit rating upgrades on its sovereign debt, and has had little difficulty tapping domestic and international markets to finance its deficits. In the May 9, 2016, general election, Filipinos elected Davao Mayor Rodrigo Duterte as president with around 39% of the vote. Mr. Duterte is committed to cracking down on crime and illegal drugs, curbing corruption, and shifting the Philippines to a federal system of government. The transition from the Aquino to the Duterte Administration took effect on June 30, 2016.



Population: 102.62 million
GDP (Current US$): US$ 311.7 billion / EUR 294.4 billion1
GDP (Current US$, per capita): US$ 2,991.00 / EUR 2,825
GDP (PPP): US$ 801.9 billion / EUR 757.4 billion
GDP (PPP, per capita): US$ 7,696.00 / EUR 7,269
Real GDP Growth: 6.8% year-on-year
Consumer Price Index (CPI): 1.7%
Labour Force: 42.8 million
Unemployment Rate: 6.6%
Main Industries: Electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing
Main Exports: Semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruit
Exports Partners: Japan 21.1%, US 15%, China 10.9%, Hong Kong 10.6%, Singapore 6.2%, Germany 4.5%, South Korea 4.3% (2015)
Main Imports: Electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic
Imports Partners: China 16.2%, US 10.8%, Japan 9.6%, Singapore 7%, South Korea 6.5%, Thailand 6.4%, Malaysia 4.8%, Indonesia 4.4% (2015)
Currency: Philippine pesos (PHP)
Ethnic groups: Tagalog 28.1%, Cebuano 13.1%, Ilocano 9%, Bisaya/Binisaya 7.6%, Hiligaynon Ilonggo 7.5%, Bikol 6%, Waray 3.4%, other 25.3%
Religions: Catholic 82.9% (Roman Catholic 80.9%, Aglipayan 2%), Muslim 5%, Evangelical 2.8%, Iglesia ni Kristo 2.3%, other Christian 4.5%, other 1.8%, unspecified 0.6%, none 0.1%
Languages: Filipino (official; based on Tagalog) and English (official); eight major dialects – Tagalog, Cebuano, Ilocano, Hiligaynon or Ilonggo, Bicol, Waray, Pampango, and Pangasinan
Literacy Rate: 96.3%

1All exchange rates as of March 2017


The Philippines has become an increasingly attractive destination for foreign direct investment (FDI). The Philippines improved its investment climate under the Aquino Administration, making strides in good governance, transparency, and accountability. Major international credit ratings agencies have upgraded the Philippines’ sovereign credit ratings to investment grade, citing robust economic performance, continued fiscal and debt consolidation, and improved governance. The country’s growing middle class quickly spends its disposable income in a stable political environment, helping gross domestic product soar to an average growth of over 6% over the last six years. Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed 2016 FDI reached US $7.9 billion / EUR 7.5 billion. The EU remains the largest investment partner of the Philippines accounting for about 37% of total FDI stock. The majority of investment inflows are in manufacturing, finance and insurance, real estate / construction, and wholesale and retail. Thanks in part to its large and educated English-speaking workforce, the BPO and tourism industries have experienced significant growth in recent years.
Still, improvement is needed: The Philippines lags behind most ASEAN nations in attracting FDI because of limits on foreign ownership in many sectors of the economy. Poor infrastructure, including high power costs and slow broadband connections, regulatory inconsistency, and corruption are major constraints to investment. Major improvements are needed in transport infrastructure. Port congestion, especially at the Port of Manila, and customs processing can significantly delay the entry of goods into the country. The Philippines’ complex, slow, and sometimes corrupt judicial system inhibits the timely and fair resolution of commercial disputes. Most cases take many years to reach a final verdict. In addition, traffic is a regular cost of business. Investors report that the Philippine bureaucracy can be difficult and opaque, and business registration and procedures are slow and burdensome. Many report a more predictable business environment within the special economic zones, particularly those available for export businesses operated by the Philippine Economic Zone Authority (PEZA), which is known for its regulatory transparency, no red-tape policy, and “one-stop-shop” services for investors.



There are market opportunities in infrastructure, energy, (including renewable energy, renewable fuels and smart grids), information and communication technology (ICT), defence, medicine, and water resources. ICT companies in particular may find opportunities in providing equipment and services to the growing business process outsourcing (BPO) sector, with 25% average year-on-year growth and a 16% annual growth rate in 2015. European medical technology is widely used in private hospitals in the Philippines. Energy production, conservation and efficiency are top priorities as the country is presently operating on low reserve margins and at high rates, with many remote areas suffering blackouts. Companies in water/wastewater management will also find opportunities in the Philippines.
Many of these sectors are in the government’s Public-Private Partnership (PPP) programme targeting projects that are a government priority. The government of the Philippines actively seeks foreign participation to promote economic development of these PPP projects. Some foreign companies have partnered with local groups on large projects. Twelve projects, covering transport, education, water and the medical sector, have been awarded, and several more are in the bidding stage for airports, roads, water, ports, prison facilities, and information technology projects. Other promising sectors include franchising, aviation, and security.



Country Introduction & Key Economic Data:

The World Factbook:
Statistical information:
Economist Intelligence Unit Country Reports:
Knoema “World Data Atlas”:

Business Environment & Market Opportunities:

Philippines Commercial Guide:

International Rankings:

IFC/World Bank “Doing Business” Report 2017 – Ranked 99 / 191:
Transparency International “Corruption Perception Index” – Ranked 101 / 176:
World Economic Form – Global Competitiveness Report (2016/2017) – Ranked 57 / 138:
Global Innovation Index 2016 – Ranked 74 /128:


Whilst ABP is not yet present in the Philippines, we are ready to support – with our local partners – in the areas of market research and business development, as well as in the fields of corporate governance, compliance assessments, negotiations and alternative dispute resolution.


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