In a previous blog post , we explained why more foreign investors have been expanding their operations or are willing to relocate to the Philippines. Philippines is an excellent choice when it comes to service outsourcing such as back office support, call center services, legal function or accounting since provides a vibrant, qualified and low cost labor force.
Recently, the Philippine government is also pushing foreign investment in other industries which will surely bring a more equitable and long term economic growth and stability to the country. Agriculture, Tourism and Manufacture must become the basis of the Philippines economy. Philippines cannot rely exclusively only on the services sector and on the money derived from the BPO economy.
One of the key reasons behind the success strategy to attract Business Process Outsourcing (BPO) companies has been great tax incentives such as Income Tax Holidays provided by the Philippines Economic Zone Authority (PEZA) as well as the Board of Investment (BOI). However, services does not necessary bring substantial revenue as most of it is collected abroad or will be repatriated in the country of origin at some point. At the same time, does not create jobs to uneducated people that are responsible for the high unemployment rate.
Manufacturing industry also benefits from similar sort of incentives. In fact, the Philippines government is granting several incentives for manufacturing organization and allows them to benefit from Income Tax Holidays (ITH), Exemption from payment of import duties and taxes on imported machinery, equipment and raw materials, exemption from Wharf Dues and Export Tax, Duty, Impost and Fees are just some of the examples.
If you wish to know more about how and why you should consider the Philippines to set up a manufacturing plant, contact us, and one of our advisers will assist you.