The Philippines has long been touted as one of Southeast Asia’s rising economic tigers. This lovely archipelago is regarded as such by economists and market analysts for good reason. For one, the micro and macro-economic of the country remained sound, with fiscal policies that is in sync with its regional neighbors. Unfortunately, the country is presently experiencing a spike in its inflation rate, something that market analysts have been watching closely with a bit of concern. Despite this, however, investors still see the country as an investment destination and that its current high inflation rate is a temporary occurrence that will eventually even out. So what makes the Philippines attractive in the eyes of investors despite today’s high inflation rate?

Low Labor Cost, Quality Labor Force

Where can you find a highly-technical labor force, with a good educational background, superb people skills, native-level English speaking ability, yet willing to receive only around two dollars for each hour? Like most Asian cultures, education is highly prized in the Philippines. Aside from earning the chance to land a good job if one is a college graduate, it’s in the culture of this country that the families of the graduate takes special pride in the fact that their son or daughter was able to finish his or her college education. It is not unusual to find photos of family members in their graduation toga prominently displayed in living rooms or in areas where visitors frequent. Since almost all college schools in the Philippines use English as their medium of instruction, it’s not surprising at all for college graduates to speak and understand the English language, with some of them having a proficiency or fluency level of a native speaker. As for people skills, many of the graduates learn this through various school activities as Philippine schools often emphasize how important it is to be able to engage their fellows in a good conversation. With all these good qualities, many of the graduates are more than willing to take on jobs that pay a lesser amount. Why? Culture kicks in once again. It is in the Philippine culture that once the parents have finished with their obligation in sending their sons and daughters to school, it is now their sons’ or daughters’ obligation to take care of them. While this is not a hard and steadfast rule, it is still being observed in many places in the Philippines.

Friendly Government Policies

Many existing laws in the Philippines is skewed in favor of the investors. Not that its lawmakers are unpatriotic. Quite to the contrary in fact as the country’s lawmakers and policy makers see these laws as beneficial for the Philippines as a whole. Many laws in the Philippines are designed to attract investors so they will set up shop in the country, which in turn would provide jobs to thousands, if not hundreds of thousands, of Filipinos who are looking for stable jobs to feed their families. One example of this government policy is the Special Economic Zone Act which allow investors to enjoy a tax holiday, which translates to a 100% exemption from a business’ corporate income tax for a given period of time. The Act states that a company’s Income Tax Holiday or ITH if it is a non-pioneering project or business is at 4 years and if it is for a pioneering project or business, that period can extend up to 6 years. The same rule applies if the investor is going to setup an export manufacturing enterprise. The same law also states that an extension of a company’s ITH may also be granted if the company’s average net foreign exchange income for its first three years of operations is at least 500K USD, among other criteria. With such policy in place, it is not hard to see why foreign investors are very much interested in investing in the Philippines.

 Infrastructure Boom

The Philippine government has launched its ambitious Build, Build, Build project that its economic managers say would usher in the golden age of construction in the Philippines. Foreign companies and investors are welcome to participate in such projects. At the moment, giant construction companies based in China, Japan and elsewhere are taking their positions, ready to take on such projects if chosen by the Philippine government. The country is also in the process of upgrading their transportation facilities like the Metro Rail Transit and Light Rail Transit, both are rapid transit systems that transport almost one million workers daily from their homes to their working places. British and European companies are also taking their positions and submitting rehabilitation proposals for the Philippine government to consider.

These are only some of the reasons why investors are still very much interested to invest in the Philippines. While some media outlets may have presented the current administration as devoid of any respect for human rights, primarily because of the gunning down of supposed illegal drug dealers, business leaders see it differently. In many business circles, a lot of businessmen approve of such occurrences because in their view, it will help reduce the index crimes, among them robbery and theft, both of which can cost businesses dearly. With the strong political will of the current administration in making everything fair for both investors and citizens, it somehow generated an air of goodwill and confidence, two things that can help a lot in convincing investors to setup shop in the Philippines.

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