Aimee L.

Polanco

ENCH-4A

November 28, 2014

PRESENT BUSINESS ENVIRONMENT IN THE PHILIPPINES

*Region: East Asia & Pacific
*Population: 96,706,764

*GNI per capita (US$): 2,470

*Income category: Lower middle income

Below are select highlights for the data included in the profile.
1. Philippines is ranked 108th out of 189 economies in Doing Business 2014. Its aggregate
score increased by twenty-five point compared to last year. In 2014, the country
implemented positive reforms that made it easier to deal with construction permits, get
credit, and pay taxes. In particular, the Philippines improved access to credit information
by beginning to distribute both positive and negative information and by enacting a data
privacy act that guarantees borrowers right to access their data.
2. According to the latest Enterprise Surveys data (2009), the top three business
environment constraints experienced by private sector firms in the Philippines include
practices of the informal sector, access to finance, and tax rates. Out of 1,326 firms
surveyed, 37.5% of them reported competing against unregistered or informal firms in the
country, compared to 52.0% in the region, and 55.8% in all countries surveyed.
Source:
The Philippines is a Southeast Asian country with a developing economy so the business
environment and the way of thinking is completely different than in a first world Western
country. The most important asset that the Philippines has to showcase to the rest of the world is
its people and is the third largest English speaking country in the world. For the US market, the
Filipino entrepreneur and knowledge worker speaks the same language, "American English",
allowing efficient work communication. The educational system of the country was set up by the
Americans when the Philippines was still a colony from 1898 up to 1945. From entering
kindergarten to college, the medium of educational instruction is American English. This
resulted to the Filipinos excellent grasp of the English language that has remained the medium of
instruction from pre-school up to post-graduate university.
The country produces 380,000 college graduates a year where close to 100,000 are in the
information and communications technology field. The educational institutions in the country as
well strives to remain updated with the latest technologies in order to produce competent work
force.
Within a short span of time, the Philippines has established itself as one of the top
destinations globally for offshoring and outsourcing (O&O) operations. From less than $100
million in total revenues in 2001, the Philippines increased O&O revenues to $3.3 billion in
2006, effectively doubling every year. This high rate of growth has persisted even as the industry
has grown beyond its initially low base. Between 2004 and 2006, the industry grew 49% per
year. As a result of this growth, the Philippines is now the Southeast Asia market leader and,
along with India and China, one of the top countries providing O&O services globally.
Demand for power will continue to grow strongly, driven by the expected increase in
economic and industrial activity and the countrys growing population. The industry estimates
demand for electric power will grow 9% annually, at least until the end of the decade.
The outlook on the Philippines construction industry sector is positive. In 2010, the
Philippines government is projected to continue its economic stimulus program as well as rebuild
infrastructure damaged by the 2009 natural calamities. Stimulus spending in 2010, however, is

expected to be less than its 2009 figures since fiscal stability is a concern of the Philippine
government.
Private construction is expected to grow, particularly with residential projects that will
address the 3.8 million housing backlog, commercial projects, and tourism/leisure facilities.
Because of the expected growth in the construction sector, Philippine imports of building
products are projected to increase by at least 5% through 2012. Many US- and Europeanmade/brand building products, everything from locks to roofing, are readily available in the
Philippines.
The Philippine market for water resource equipment/services is expected to grow by
about 5% in the next two years. On-going and upcoming projects that address the increasing
water demand and pressing water-related problems of the Philippine include limited access to
potable water through water supply and distribution operations. Roughly 30 million people
throughout the country do not have access to potable water through water supply and distribution
operations); lack of accurate water usage monitoring; large amount of unaccounted-for-water
due to leaks in distribution pipes, inefficient metering and poor administration. The US is a
major source of water resource equipment and services of the Philippines.
For our part, we are doing our level best to forge an environment that is even more
conducive to business, the President said.
And even as we invest in infrastructure and institute reforms that level the playing field,
we continue to channel the hard-earned money of our taxpayers into health, education, social
services, and other initiatives to empower our countrymenmaking them true, productive
contributors to the continuing cycle of opportunity and progress, he added.
The countrys economic strides havent escaped notice, the President said, noting the
Philippines is now rated investment grade for the first time in history by three major credit rating
agencies. And in the first quarter of the year, the economy grew by a remarkable 7.8 percent in
addition to countless other indicators of economic growth. The Philippines is now in a situation
where even greater prosperity is within reach, he said. The President also expressed optimism
that the country would be able to sustain these initiatives, especially since the Philippiness
economic resurgence is granting the government greater fiscal space to pursue its agenda of
social and economic inclusiveness.
The government will always support companies for the success of their businesses, the
President said, adding that business expansion means creation of more jobs in the country. The
President said that as companies continue to reap the benefits of the Philippine economic revival,
he expects the companies to also share the fruits of their hard works not only through
philanthropic activities but also by setting the good example as citizens who fulfill their
obligations.
Source: http://www.bcs.gov.ph/index.php/10-latest/511-aquino-says-philippines-will-remainconducive-to-business