The Philippines has a large English-speaking population, relatively simple customs, and abundant human resources. Moreover, the wages of engineers and manufacturing workers in the Philippines are relatively low, which has a strong “cost competitiveness” compared to others in the market.
In addition, compared with Thailand, Vietnam and other ASEAN neighbors, the cost rise of the manufacturing industry in the Philippines is more stable. For example, the annual wage increase in Vietnam is about 7%, while in the Philippines this comes to about 4.6%. The relatively low labor cost and high-quality labor force in the Philippines create a suitable “business environment.”
China and the Philippines have a long-standing relationship which allows for business opportunities to be streamlined. From 2019 to April of 2020, China became the Philippines’ largest export market, occupying approximately 26.85% of its market share; at the same time, China is also the Philippines’ largest import supplier in the same period, occupying approximately 23% of its market share. During the epidemic, the Philippines did not impose import and export restrictions and required legislation to support the passage of relevant economic stimulus measures, such as the “Business Recovery and Enterprise Tax Preferences Act” and the “Philippines Economic Stimulation Act” which promoted the rapid economic and business development. This recovery response has helped maintain a good business environment.
Investment Priority Plan
To invest in the Philippines, companies must understand the country’s preferential policies. The Philippines government will formulate an “Investment Priority Plan” every year, listing the areas that are encouraged to invest and the preferential recommended conditions, this includes guiding domestic and foreign investment in industries designated by the government. Incentive measures include income tax reduction, exemption of import terminal taxes, exemption of export taxes and fees, etc. ——This is of great significance for Chinese enterprises to invest in the Philippines.
What should I pay attention to when investing in the Philippines?
With the development of the “Belt and Road” the trade and investment exchanges between Chinese enterprises and other countries have been enriched. For companies, it is important to understand the customs and regulations of the other country. Here, Comrise reminds companies from China that in order to invest in the Philippines they need to pay attention to the following points:
1. There are many islands in the Philippines, and there are certain differences in culture and religious beliefs. Making full and effective use of local human resources on the basis of respecting the culture and traditions of various parts of the Philippines is something that Chinese companies must know about their employment in the Philippines.
2. No matter where you go to do business in any country, it is very important for an enterprise to understand the laws, regulations, and related policies of local employment. Companies often cause a lot of trouble because of a small “violation”. Of course, many companies do not deliberately violate laws and regulations, but lack the “basic common sense” of local laws and regulations-especially those companies that do not have “legal consultants”. The relevant laws in the Philippines are relatively sound, and Chinese companies must have a good understanding of doing business in the Philippines.
3. The Philippines pays attention to environmental protection and has stricter requirements for certain industries. Therefore, Chinese companies must pay attention to the requirements of relevant laws and regulations when investing in the Philippines.
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