World Country Guide

Business Profile

Economy
The agricultural sector produces rice, corn, coconuts, copra, sugar cane and bananas as the main crops. Production of timber, formerly a major export earner, has been suspended due to the effects of deforestation. There is a moderately sized mining industry producing copper, gold, silver, nickel and coal. Offshore oil production is due to begin in the next few years. Most of the Philippines’ recent economic development has been industrial, with food processing, oil refining, and the production of chemicals, electrical machinery, metal goods and textiles all having been established during the last 20 years.
Broad financial incentives aimed at attracting foreign investment capital, and the creation of five export processing zones (EPZ) with concessionary tax rates and tariffs, prompted strong growth during the early- and mid-1990s. However, it also produced a somewhat skewed economy in which the Manila area, known as the National Capital Region, now hosts 15 per cent of the population and accounts for one-third of GDP: there are huge income disparities between the capital and the rest of the country.
The Philippines’ economic growth came to a shuddering halt in late 1997 when the collapse of the region’s currencies produced a stock market crash, high inflation, the cessation of foreign investment, and a large budget deficit. El Nio, the climatic system which wreaks periodic havoc upon the Philippines, worsened the situation further. The economy has since recovered fairly well. Current annual growth is 4.3 per cent, while industrial production has picked up after several years of decline. Foreign aid (including a US$100 million subvention from the USA in 2002) has helped the country’s finances, along with a sharp increase in remittances from the thousands of Filipinos working abroad. Unemployment is still a problem, having grown steadily during the last few years to its current level of 11.4 per cent. The Philippines’ longer term economic prospects will depend on the Government’s vigour in pursuing essential and overdue reforms to the tax and banking systems, and improvements to the country’s shaky infrastructure. The Philippines belong to the Association of South East Asian Nations (the anti-Communist bloc which is now assuming an important economic role) and the Asian Development Bank. The country’s major trading partners include The Netherlands, the UK and USA.

Business
The weather is almost uniformly warm and humid and so short-sleeved shirts, preferably with a tie, can be worn for business visits. However, with most offices being air conditioned, it is best to wear safari suits or a long-sleeved Filipino barong tagalog when visiting top business officials and executives. Filipinos have an American business style and English is widely spoken. Best months for business visits are October to November and January to May. Unless you have urgent business matters to attend to, business visits around Christmas and Easter are not recommended as delays tend to be unavoidable. Office hours: These vary. Usually Mon-Fri 0800-1200 and 1300-1700. Some private sector offices are open Sat 0800-1200.

Commercial Information
The following organisations can offer advice: Philippine Trade and Investment Promotion Centre, 1a Cumberland House, Kensington Court, London W8 5NX, UK (tel: (020) 7937 1898; fax: (020) 7937 2747; e-mail: dtilondon1@aol.com); or the Philippine Chamber of Commerce and Industry (tel: (2) 844 5713; fax: (2) 843 4102; email: pcci@philcham.com; website: www.philcham.com).

Conferences/Conventions
Many establishments are members of the Philippine Convention and Visitors Corporation (PCVC). For further general information, contact the PCVC (see Contact Addresses section).