-
THE PHILIPPINES: An Overview to Investing in the Philippines
Workforce
The Filipino workforce is one of the most compelling advantages
the Philippines has over any other Asian country. With higher
education priority, the literacy rate in the country is 94.6% among
the highest. English is taught in all schools, making the
Philippines the worlds third largest English-speaking country.
Every year, there are some 350,000 graduates enriching the
professional pool.
Business location The Philippines is located right in the heart
of Asia today the fastest growing region. It is located within four
hours flying time from major capitals of the region. Sited at the
crossroads of the eastern and western business, it is a critical
entry point to over 500 million people in the Association of
Southeast Asian Nations (ASEAN) market and a gateway of
international shipping and air lanes suited for European and
American businesses. First-class Lifestyle Discover the best of
sun, sea, sand and style in the tropical setting teeming with the
best of western amenities. The Philippines is second home to
expatriates who enjoy the company of the warmest people in the
region, the countrys openness to varied cultures, and a decidedly
global outlook. Expats enjoy accessible and affordable luxuries
business centers, housing, schools, hospitals, shopping malls,
hotels and restaurants, beach resorts, and recreation centers.
-
Abundant Resources An archipelago like the Philippines offers
diverse natural resources, from land to marine to mineral
resources. It is also the biggest copper producer in Southeast Asia
and among the top ten producers of gold in the world. It is also
home to 2,145 fish species, four times more than those found in the
Bahamas. The 7,100 islands boast of beautiful beaches and
breathtaking sceneries that offer soothing leisure and relaxation
spots for vacationers and tourists.
Low Cost of Doing Business Wages are typically less than a fifth
of that in the United States. Local communication, electricity, and
housing costs are also 50% lower compared to the US rates. Foreign
companies that are now outsourcing programming and business
processes to the Philippines estimate 30%-40% business cost
savings, 15%-30% call center services and application systems, and
35%-50% software development.
Liberalized and Business-Friendly Economy
An open economy, like the Philippines, allows 100% foreign
ownership in almost all sectors and supports a
Build-Operate-Transfer (BOT) investment scheme that other Asian
countries emulate. Government corporations are being privatized and
the banking, insurance, shipping telecommunications, and power
industries have been deregulated. Incentive packages include the
corporate income tax, reduced to a current 32%, with companies in
the Special Economic Zones (ecozones) subject to only 5% overall
tax rates. Multinationals looking for regional headquarters are
entitled to incentives such as tax exemptions and tax and duty-free
importation of specific equipment and materials.
-
Unlimited Business Opportunities Asian economies integrate
within the vast framework of the ASEAN Free Trade Agreement (AFTA),
the Philippines is the natural and most strategic location for
firms that want access to the large ASEAN market and its vast trade
opportunities. The Philippines has enhanced and primed up various
areas for investors and offers a dynamic consumer market accustomed
to an array of product choices created by a competitive domestic
economy.
Developing Infrastructure for Global Growth A well-developed
communication, transportation, business, and economic
infrastructure links the three major islands Luzon, Visayas, and
Mindanao and distinguishes the Philippine economy. Highly
accessible by air, water, and cyberspace, liberalization of
inter-island shipping and domestic aviation further sparked
improved facilities and services. The container terminals are
suited to handle cargo traffic at the highest levels of
efficiency.
-
Further, Figure below shows that the country has sixteen (16)
sedimentary basins with a combined potential of 4,777 MMBOE (689.8
MTOE) of oil and gas reserves . These are located in the Cagayan
Valley Basin in the north down to the Agusan-Davao Basin in the
south as well as the productive Northwest Palawan and the Sulu Sea
Basin along the western side of the archipelago.
-
Service Contracts
Considering the huge Investment requirement in the exploration
and development of indigenous oil and gas, the DOE continues to
encourage the private sectors participation through the Philippine
Energy Contracting Round (PECR). At present there are 26 active
Petroleum Service Contracts (PSC) in the country as detailed in the
Table below.
Philippine Energy Contracting Round (PECR)
The implementation of the PECR continues to draw interest from
oil and gas operators. The government in partnership with private
companies shows the continued drive and commitment to discover new
areas that can yield higher oil and gas production.
-
Downstream Oil Industry
The Philippines is a net energy importer in spite of low
consumption levels relative to
its Southeast Asian neighbors. The country produces small
volumes of oil, natural
gas, and coal. Geothermal, hydropower, and other renewable
sources constitute a
significant share of electricity generation.
In 2011, total primary energy consumption in the Philippines was
roughly 1.3
quadrillion British thermal units (Btu). Oil constituted roughly
41% of total
consumption, coal made up 22%, biomass made up 19%, and the
remainder came
from natural gas and various renewable sources.
In 2013, total oil production was 26,000 barrels per day (bbl/d)
while the country
consumed 299,000 bbl/d. In May 2014, the government invited
tenders for 11 oil and
gas blocks in the Palawan Basin and nearby areas, including one
in the South China
Sea, according to Reuters. This exploration bid round could push
oil production up to
39,000 bbl/d by 2019.
Two of the blocks being launched for exploration licensing are
located close to the
Spratly Islands (of which a portion are claimed by the
Philippines), which are areas
under territorial dispute with China. EIA estimates the South
China Sea contains
approximately 11 billion barrels of oil and 190 trillion cubic
feet of natural gas in
proved and probable reserves.
The Philippines imported roughly 270,000 bbl/d of crude oil and
petroleum products
in 2013, with 35% of their crude oil imports coming from Saudi
Arabia and Russia.
The Philippines possesses the capacity to refine 290,000 bbl/d.
Shell Philippines - a
subsidiary of Shell - and Otto Energy play significant roles in
the upstream sector,
while Petron Corporation operates the largest refinery in the
country, supplying
nearly 40% of the countrys oil needs. The Philippines exports
nearly all the crude oil
it produces.
Dry natural gas production was 99 billion cubic feet (Bcf) in
2012, down every year
since 2008, and all of which was consumed domestically. The
Malampaya deep-
water, gas-to-power project is one of the largest foreign energy
projects in the
country and is operated by Shell with joint venture partners
Chevron and the PNOC
Exploration Corporation, a subsidiary of the state-owned
Philippine National Oil
Company. Malampaya provides 30% of the countrys power needs.
The Philippines consumed roughly 20 million short tons of coal
in 2013, almost half
of which was produced domestically and the remainder imported.
Domestic coal
production is estimated to reach roughly 7.3 million short tons
of coal by 2014. Coal
consumption in the Philippines is projected to continue
increasing because of a rise
in domestic supply and increased demand from domestic coal-fired
power plants,
according to the International Energy Agency.
The Philippines has an existing total capacity of 16.2 gigawatts
(GW) and the
government plans to add 11.4 GW of additional capacity by 2030
as part of the
Philippine Energy Plan, according to the countrys Department of
Energy. The
Philippines had 3.5 GW of installed hydropower generation
capacity and 1.8 GW of
installed geothermal generation capacity in 2012.
-
Total electricity generation in 2013 was 76 terawatthours (TWh),
up 4.5% from 2012,
according to BP Statistical Review of World Energy 2014.
Geothermal (11%) and
hydropower (21%) were major contributors to total generation in
2012, while
hydrocarbons, mainly coal and natural gas, accounted for the
remainder. Currently there are 3,472 registered gasoline dispensing
stations, 182 LPG refilling
plants, 28.30 MB of storage capacity and 16.62 MMB depots
(import and export terminals).
Petroleum (Thousand Barrels
per Day) Previous Year
Latest
Year
History Philippines Asia &
Oceania
World Rank
Philippines
Total Oil
Production
(1980-
2013)
25.24 9,086 89,75
9
72 26.25
Crude Oil
Production
(1980-
2013)
19.99 7,739 75,96
0
65 21.00
Consumption
(1980-
2013)
308.44 29,419 89,72
1
40 299.39
Estimated
Petroleum Net
Exports
(1980-
2013)
-283.20 -20,333 -- 190 -273.14
Refinery
Capacity
(1980-
2012)
273 24,875 88,09
7
52 273
Proved
Reserves(Billio
n Barrels)
(1980-
2014)
0.14 45 1,646 61 0.14
-
Three (3) Oil Majors
Dominated by two (2) major oil refining and marketing companies
namely: PETRON and PILIPINAS SHELL
A third oil refiner and marketer, Caltex Philippines converted
its 86,500 barrels/day refinery into an import terminal in 2003 and
now operates as a plain marketing and distributing company under
the name CHEVRON but maintains its Caltex brand
Petron Corporation
Operates the largest refinery nationwide with a capacity of
180,000 barrels-per-day Currently serves 40% of the nationwide
demand Located in Limay, Bataan which is about 139 kilometers from
Manila or 71.1 kilometers
to Subic Total of 30 terminals nationwide with the bulk located
in various parts of Luzon Over 2,200 gas stations nationwide Runs
an integrated downstream operation in Malaysia
-
Pilipinas Shell
Operates the 2nd largest refinery with a capacity 110,000
barrels per day Currently serves almost 30% of the nationwide
demand Located in Tabangao, Batangas which is about 107 kilometers
from Manila or 234
kilometers to Subic Total of 22 oil depots Over 960 retail
stations nationwide Presence include oil and gas exploration
activities, operating the Malampaya Deepwater
Gas-to-Power Project on behalf of the Department of Energy and
its partners (Chevron Malampaya LLC and the Philippine National Oil
Company - Exploration Corporation).
-
Chevron Philippines
Built the first refinery in San Pascual, Batangas with a
capacity of 86,500 barrels/day which was converted to an import
terminal in 2003
Total of 2 oil terminals About 750 retail gas stations
nationwide Presence include oil and gas exploration activities
operating the Malampaya Deepwater
Gas-to-Power Project on behalf of the Department of Energy and
its partners (Shell Exploration BV and the Philippine National Oil
Company - Exploration Corporation).
Owns substantial interests in Geothermal Power Plants in
Luzon
-
A 33-hectare compound located in Pandacan, district of Manila
which houses the storage facilities and distribution terminals of
the three (3) oil majors namely Petron, Shell and Chevron
The depot holds a combined capacity of 313 million liters of
refined petroleum products The Supreme Court has ordered the
closure and transfer by July 2015 Manila Mayor has given Petron and
Shell until January 2016 Chevron has ceased operations in the area
as of June 2014 Reason for the closure is location in a highly
populated area There has been several incidents of fire and
explosion Old facility not designed to withstand earthquakes
-
Other Oil Players
Total Philippines
Operates storage terminal in Mariveles, Bataan with a capacity
of 50-million liters Recently opened its storage facility in Harbor
Centre, Tondo, Manila with a capacity of 9-
million liters Mandaue City fuel depot
2 million liters for 2 million liters for diesel 80,000 liters
tank for ethanol. 1 million liters tank is used for aviation
fuel.
TOGRI is putting up a second fuel storage facility located in
the town of San Jose, Province of Negros Oriental with a storage
capacity of 2 million liters.
Phoenix Petroleum Philippines
Cagayan de Oro -37 million liters. Calaca, Batangas- 82 million
liters Davao City, Batangas, Cagayan de Oro, Aklan, Zamboanga,
Tagum, and Surigao del
Sur, Phoenix Petroleum now has the largest storage capacity
among local independent oil companies
-
PTT
Subic Bay, Olongapo City, Zambales; Clark Field, Angeles City,
Pampanga; and in Lapu-lapu City in Cebu - with a combined ullage of
three million barrels
SBMA- storage and handling facility, operated by Philippine
Coastal Storage and Pipeline Corp. (PCSPC), can hold 2.4 million
barrels of refined petroleum products
Clark Pipeline and Depot Company, Inc. (CPDCI) has a capacity of
more than 500,000 barrels designed to store Gasoline, Gas Oil and
Jet Fuel.
CPDCI likewise operates the 64-km underground pipeline running
from the Subic Bay facility to Clark.
Seaoil Philippines
SEAOIL now operates 10 depots and terminals across the country,
representing 160 million liters of oil storage capacity
Jetti
2.2 hectare land area off-shore berthing facility located at
Naic, Cavite. combined shell capacity of the storage tanks is 16
million liters for automotive diesel oil
and unleaded gasoline products.
-
Unioil
Lucanin, Bataan 22 storage tanks with a total capacity of more
than 1 million barrels
-
Oil Supply/Demand Report FY 2012 SUPPLY Inventory
Actual crudes and petroleum products closing inventory for the
month of December 2012 was reported at 13,085 thousand barrels (MB)
or 44-days supply equivalent; 35 days for crude oil and products in
country stocks and 9 days in-transit. This was slightly lower in
volume by 0.6 percent from last years December level of 13,169 MB.
YTD December 2012 average inventory was recorded at 47 days, 38
days in country stock and 9 days in-transit.
The Minimum Inventory Requirement (MIR) is still being enforced
given the continuing risks faced by the downstream oil industry
sector such as geopolitical instability and supply delivery
problems to areas affected by calamities (e.g. typhoon, flood,
earthquake, etc.).
Current MIR for refiners is in-country stocks equivalent to 30
days while an equivalent of 15 days stock is required for the bulk
marketers and 7 days for the LPG players.
Sometime in the third quarter of 2012, Metro Manila and nearby
provinces experienced tightness in the supply of LPG. This was due
to the delayed arrival of import shipments of a major LPG player in
Luzon because of bad weather condition. The situation was further
aggravated when their import vessels were unable to dock and unload
the LPG cargo due to rough sea and high water level in their Bataan
port. This resulted to long queue of their customers LPG tank
trucks for loading at their depot, mostly independent LPG
refillers. The situation normalized a month later with the
Department of Energy closely monitoring the situation and
coordinating with other LPG importers to ensure continuous LPG
supply in the affected areas. Crude Oil Imports
Total crude oil imported in 2012 reached 64,941 MB, a drop of
6.7 percent vis--vis 2011s 69,615 MB.
Of these imports, 51,556 MB or 79.4 percent of the crude mix
originated from the Middle East. The bulk of the imported crude oil
from the Middle East came from Saudi Arabia: 29,784 MB or
equivalent to 45.9 percent of the total crude mix.
On the other hand, a total of 16,754 MB, equivalent to 25.8
percent of the total crude mix, were imported from UAE; 10,253 MB
or 15.8 percent came from Russia and 5,018 MB or 7.7 percent was
bought from Qatar.
The remaining 4.8 percent (3,131 MB) was imported from the Far
East Region such as Malaysia, Brunei, Indonesia and Vietnam and
from local production. Petroleum Product Imports
The country imported a total of 54,754 MB finished petroleum
products in 2012, an increase of 18.9 percent from 46,065 MB of
2011.
Meanwhile, on a per product basis, diesel oil posted the biggest
growth of 35.7 percent as compared withlast years level.
Kerosene/avturbo and unleaded gasoline also rose by 20.6 and 10.7
percent, respectively. On the other hand, fuel oil imports and LPG
dropped by 18.0 and 0.8 percent, respectively.
The new industry players accounted for majority of the product
imports with 54.2 percent of the total imports volume, up by 9.1
percent to 29,678 MB from 2011s 27,193
-
MB. The oil majors (Petron, Chevron and Shell) accounted for the
remaining 45.8 percent which increased by 32.9 percent from 2011s
18,872 MB to 25,076 MB.
The local refiners (Petron and Pilipinas Shell) accounted for
26.0 percent of the total product imports, which included blending
stocks, as against 74.0 percent by direct importers.
Product import mix comprised mostly of diesel oil at 45.5
percent, unleaded gasoline at 22.6 percent, LPG at 15.2 percent,
kerosene/ avturbo at 11.1 percent, fuel oil at 3.4 percent and
other products at 2.2 percent share in the total product mix.
Total gasoline import reached 47.7 percent of gasoline demand
while diesel oil import was 53.5 percent of diesel demand. LPG
import on the other hand, was 66.9 percent of LPG demand. Total
product import was 49.3 percent of the total products demand.
The oil majors import share in the total demand was 22.6 percent
while the other players import share was at 26.7 percent. As for
the refiners, their import share in the total demand was 12.8
percent, while 36.5 percent was attributed to direct importers.
Crude Run and Refinery Production
The countrys current maximum working crude distillation capacity
is 275 thousand barrels per stream day (MBSD).
Total crude processed as of YTD December 2012 fell by 10.0
percent from 69,288 MB of YTD December 2011 to 62,391 MB. The
reported refinery capacity utilization also declined by 10.3
percent from 69.1 percent in YTD December 2011 to 62.0 percent this
year. This was due to the successive shutdown of the two refineries
in the country sometime in the 2nd quarter of 2012 for
turnaround/maintenance schedule.
Consequently, local petroleum refinery production output also
declined by 10.5 percent from 67,375 MB to 60,293 MB. FY 2012
average refining output was at 164.7 MB per day.
Diesel oil continued to dominate the production mix with a share
of 37.5 percent, followed by unleaded gasoline with a 19.9 percent
share. Next was fuel oil at 19.0 percent share. Meanwhile,
kerosene/ avturbo and LPG got 10.1 and 6.8 percent share,
respectively
-
Refinery output of all petroleum products decreased vis--vis
last year. Fuel oil,
kerosene/avturbo and diesel oil decreased by 13.1, 11.1 and 10.2
percent, respectively. LPG refinery output also went down 9.2
percent.
DEMAND
Petroleum Product Demand The countrys total demand of finished
petroleum products in year 2012 was up by 3.9
percent to 110,991 MB from 106,857 MB of year 2011. This can be
translated to an average daily requirement of 303.3 MB compared
with last years level of 292.8 MB.
Compared with last year, unleaded gasoline demand posted an
increase of 6.0 percent while diesel oil demand rose by 4.5
percent. Kerosene/avtubo demand also grew by 4.0 percent. On the
other hand, demand of LPG and fuel oil dropped by 1.5 and 0.4
percent, respectively.
Product demand mix comprised mostly of diesel oil at 42.0
percent, unleaded gasoline at 23.3 percent, fuel oil at 11.3
percent, LPG at 11.2 percent, kerosene/ avturbo at 11.1 percent and
other products at 1.1 percent share in the total product mix
Petroleum Product Exports
Total petroleum products exported for the period was down by
30.3 percent from 13,470 MB of 2011 to 9,395 MB. This may be
attributed to the shutdown of refineries for turnaround schedule as
cited previously.
On a per product basis, exports of all petroleum products
dropped vis--vis 2011 figures except diesel oil which grew by 43.5
percent. Condensate, the top product exported for the period fell
by 12.4 percent. Fuel oil also decreased by 61.9 percent. Exports
of naphtha went down by 9.4 percent.
The total export mix comprised of condensate (48.8 percent);
naphtha (17.0 percent); fuel oil (14.3 percent); mixed xylene (9.4
percent); toluene (3.5 percent); reformate (1.3 percent); and
benzene (1.5 percent), respectively.
-
The oil refiners accounted for 51.2 percent of the total export
mix while the condensate exports of Shell Philippines Exploration
B. V. (SPEX) and LPG exports by Liquigaz accounted for the
remaining 48.8 percent. Crude Oil Exports
A total of 1,401 MB crude oil from Galoc (Palawan Light) was
exported during the year which fell by 42.7 percent vis--vis 2,447
MB of last year due to its low production which resumed only in May
2012 after a 6-month long shutdown.
-
MARKET SHARE
Total Petroleum Products The major oil companies (Petron Corp.,
Chevron Phils. and Pilipinas Shell Petroleum
Corp.) got 72.8 percent market share of the total demand while
the other industry players which include PTT Philippine Corp.
(PTTPC), Total Phils., Seaoil Corp., TWA, Filpride, Phoenix,
Liquigaz, Petronas, Prycegas, Micro Dragon, Unioil, Isla LPG Corp.,
Jetti and Filoil Gas Co., as well as the end users who imported
directly part of their requirement captured 27.2 percent of the
market
Meanwhile, the local refiners (Petron Corp. and Pilipinas Shell)
captured 62.9 percent of
the total market demand while 37.1 percent was credited to
direct importers/distributors.
-
OIL IMPORT BILL
Full year 2012 total oil import bill amounting to $13,861.2
million was up by 7.9 percent from full year 2011s $12,846.2
million despite the decrease in crude import volume. This is due to
high import costs of both crudes and finished products during the
period as compared to year ago level.
Total oil import cost was made up of 53.6 percent crude oil and
46.4 percent finished products.
Import cost of crude oil, amounting to $7,430.9 million at an
average CIF cost of $114.426/bbl, was 2.1 percent lower than
$7,590.1 million of year 2011 at an average CIF cost of
$109.932/bbl.
Meanwhile, total product import cost increased by 22.3 percent
to $6,430.2 million at an average CIF cost of $117.438/bbl vis--vis
2011s $5,256.1 million at an average CIF cost of $114.102/bbl.
With the decreased volume of petroleum products and crude oil
exported for the period, the countrys petroleum export earnings
fell by 30.3 percent from $1,770.6 million of 2011 to $1,233.9
million this year.
Overall, the countrys 2012 net oil import bill amounting to
$12,627.3 million was up by
14.0 percent from 2011 level of $11,075.7 million.
-
Proposed Locations
1. Tanza, Cavite
36.5kms from Manila 45 mins from Manila (without traffic) Land
area 62,400 sqm (undeveloped property) Without jetty
-
2. Subic Bay Freeport Zone
A. Pure Petroleum Corp.
9 storage tanks within an area of 1 hectare Roughly about 10
cubic meters each storage tank Own jetty 124kms from Manila
-
B. Subic Bay Motors Corp. (SBMC)
Lot Size: It has a land area of about 32,700 sq.m. (mostly paved
or asphalted) while the main production building has a floor area
of 7,586 sq.m. Facilities include an administration, production
& sales offices, and public bidding area or auction shed.
Address: Bldg. 1457 Argonaut Highway, CUBI Point, Subic Bay
Freeport Zone, Philippines 2222
Coordinates: 1447'57"N 12017'44"E
-
SUBIC PROPOSED LOCATIONS
-
3. Sariaya, Quezon
World Precision Gas Corporation
Diesel Oil Terminal Facility
Present storage capacity- 30 million liters( 3 tanks at
10million liters each) or 25,000 metric tons
Immediately expandable to 100million liters(ground improvements
completed)or 85,000metric tons or 0.64Mil Barrels
Still expandable by another 100million liters or a total of
200Million liters or 170,000 metric tons or 1.28Million Barrels
Receiving Facility-submarine pipeline,buoy mooring, 18 meters
draft, capacity of 100,000 metric tons
Fully compliant with intl standards,had passed required tests-
radiographic, leak, vacuum
Complemented with barge load out and tank truck loading
gantry
-
Hub of Asia Well Positioned- Vessels coming from the west will
pass by the Philippines first. 5 days vessel travel time between
Asian Countries. Good for Local & Asian Region Storage.
COMPETITIVE ADVANTAGE
Natural Port Attributes
Capability of Tayabas Bay to Accommodate VLCCs
Located in an Inland Bay
Natural Deep Water Environs
Uncongested Servicing of Inbound and Outbound Ships Land Area
Availability Not Thickly Populated Direct Access to Natural Deep
Water Berth(18.5 meters) that can handle VLCC
-
Diese1 Oil Depot Specs
A. FACILITIES
l. Bundwall
2. Oil Water Separator compJete with Mechanical Facility
3. Storm drainage/open canal system
4. 3-Bay Bulk Filling Gantry
B. MECHANICAL WORKS
I. Aboveground Distribution & Supply Lines
- Complete with gate valves, wye strainers, check valves &
pressure gauges
6" diameter pump suction lines
4" diameter discharge line goes to Bulk Filling Gantry
Radiographic test of all butt welded lines
Hydrotesting of lines
Anti corrosion wrapping of all underground pipes
2. Fire Hydrant lines for three (3) tanks
C. 'MARINE FACILITIES
1. Receiving Facility - 18" diameter x 1,000 meters submarine
pipeline
- Hydro or Air testing of pipelines
2. Barge Load Out Facility
4 point mooring buoy facility
Spiral steel pipe
Submarine pipeline about 600 meters from terminal sea wall
Radiographic & Hydrotest Tests
D. ELECTRICAL WORKS
- Main feeder line for the 220 VAC single phase utility
power
- Lights, AlC system
- Grounding System & Lighting System
- Fire Alarm System & Emergency Shutdown
-
E. INSTRUMENTATION AND FACILITIES EQUIPMENT
1. Oil spill containment, boom etc.
2. Generator, 500 KVA Cummins
3. Fire pump, jockey pump and accessories
4. Loading gantry facility including meters, Dev and loading
arms 5. Outloading hoses for barge loading, marine receiving hose,
break away
couplings, line valves
6. Flow metering system for marine receiving and barge
loading
7. Tank gauging and inventory control system including
installation
8. Multiload II (Batch controllers)
9. Densitometer
10. Petroleum valves
F. STORAGE TANK
Tank type
Bottom type
Liquid type
Shell Height
Nominal Diameter
Reference Height (side hatch)
Volume at 0 level
Maximum Filling Height
Maximum Filling Volume
Safe Filling Height
Safe Filling Volume
Vertical cylindrical
Coned down
Petroleum
9.770 - meters
36.745 - meters
10.167 - meters
169,061 -liters
9.790 - meters
10,529,831 -liters
9.290 - meters
10,000,989 - liters
-
Doing Business in the Philippines
Board of Investments: FISCAL INCENTIVES:
Income tax holiday (ITH) for 6 years for pioneer firms and
generally 4-6 years for non-pioneer firms.
If a non-pioneer firm is located in a less developed area, it
shall generally be entitled to an ITH of 6 years.
Firms locating within Metro Manila shall not be granted ITH
unless they are: Within a government industrial estate;
Service-type projects with no manufacturing facilities; Power
generating plants; or Exporters with expansion projects.
Tax credit on raw materials, supplies, and semi-manufactured
products Duty-free importation of capital equipment, spare parts
and accessories until 10 May
2017 Board of Investments
Board of Investments: NON-FISCAL INCENTIVES:
Allows employment of foreign nationals Simplification of customs
procedures Importation of consigned equipment; and The privilege to
operate a bonded manufacturing/trading warehouse subject to
custom
rules and regulations.
Economic & Freeport Zones Incentives
Exempted from all local and national taxes - value-added taxes,
franchise taxes, excise and ad valorem taxes)
Special Tax Rate of 5% on Gross Income
Tax and Duty-Free on Importation of Capital Equipment, Spare
Parts and Supplies
Foreign nationals may be employed in supervisory, technical or
advisory positions within 5 years from a projects registration,
extendible for limited periods. The positions of president, general
manager, and treasurer or their equivalents, of foreign-owned
registered firms may be retained by foreign nationals.
All foreign employees may bring with them their spouses and
unmarried children under 21 years of age.
-
Attractive Investment Incentives
TYPES OF BUSINESS ENTERPRISES
There are several types of business enterprises an investor can
choose from in establishing operations in the Philippines.
A. ORGANIZED UNDER PHILIPPINE LAWS 1. SOLE PROPRIETORSHIP
Sole Proprietorship is a business structure owned by an
individual who has full control/authority of its own and owns all
the assets, personally owes and answers all liabilities or suffers
all losses but enjoys all the profits to the exclusion of
others.
A Sole Proprietorship must apply for a Business Name and be
registered with the Department of Trade and Industry- National
Capital Region (DTI-NCR).
In the provinces, application may be filed with the extension
offices of the DTI.
2. PARTNERSHIP
Under the Civil Code of the Philippines, a partnership is
treated as juridical person, having a separate legal personality
from that of its members. Partnerships may either be general
partnerships, where the partners have unlimited liability for the
debts and obligation of the
-
partnership, or limited partnerships, where one or more general
partners have unlimited liability and the limited partners have
liability only up to the amount of their capital contributions. It
consists of two (2) or more partners. A partnership with more than
three thousand pesos ( 3,000.00) capital must register with
Securities and Exchange Commission (SEC).
3. CORPORATION
Corporations are juridical persons established under the
Corporation Code and regulated by the Securities and Exchange
Commission with a personality separate and distinct from that of
its stockholders. The liability of the shareholders of a
corporation is limited to the amount of their share capital. It
consists of at least five (5) to fifteen (15) incorporators each of
whom must hold at least one share and must be registered with the
Securities and Exchange Commission (SEC). Minimum paid up capital:
five thousand pesos ( 5,000.00).
A corporation can either be stock or non-stock company
regardless of nationality. Such company, if 60% Filipino-40%
foreign-owned, is considered a Filipino corporation; If more than
40% foreign-owned, it is considered a foreign-owned
corporation.
a. Stock Corporation
This is a corporation with capital stock divided into shares and
authorized to distribute to the holders of such shares dividends or
allotments of the surplus profits on the basis of the shares
held.
b. Non-stock Corporation
It is a corporation organized principally for public purposes
such as charitable, educational, cultural or similar purposes and
does not issue shares of stock to its members.
B. ORGANIZED UNDER FOREIGN LAWS 1. BRANCH OFFICE
A Branch office is a foreign corporation organized and existing
under foreign laws that carries out business activities of the head
office and derives income from the host country. It is required to
put up a minimum paid in capital of US$200,000.00, which can be
reduced to US$100,000.00 if (a) activity involves advanced
technology, or (b) company employs at least 50 direct employees.
Registration with the SEC is mandatory.
2. REPRESENTATIVE OFFICE
A Representative Office is foreign corporation organized and
existing under foreign laws. It does not derive income from the
host country and is fully subsidized by its head office. It deals
directly with clients of the parent company as it undertakes such
activities as information dissemination, acts as a communication
center and promote company products, as well as quality control of
products for export. It is required to have a minimum inward
remittance in the amount of US$30,000.00 to cover its operating
expenses and must be registered with SEC.
-
3. REGIONAL HEADQUARTERS/REGIONAL OPERATING HEADQUARTERS
(RHQS/ROHQS)
Under RA 8756, any multinational company may establish an RHQ or
ROHQ as long as they are existing under laws other than the
Philippines, with branches, affiliates and subsidiaries in the Asia
Pacific Region and other foreign markets.
a. Regional Headquarters (RHQS)
An RHQ undertakes activities that shall be limited to acting as
supervisory, communication and coordinating center for its
subsidiaries, affiliates and branches in the Asia-Pacific
region.
It acts as an administrative branch of a multinational company
engaged in international trade. It does not derive income from
sources within the Philippines and does not participate in any
manner in the management of any subsidiary or branch office it
might have in the Philippines. Required inward remmitance of
US$50,000.00 annually to cover operating expenses.
b. Regional Operating Headquarers (ROHQS)
An ROHQ performs the following qualifying services to its
affiliates, subsidiaries, and branches in the Philippines. o
General administration and planning o Business planning and
coordination o Sourcing/procurement of raw materials components o
Corporate finance advisory services o Marketing Control and sales
promotion o Training and personnel management o Logistic services o
Research and development services and product development o
Technical support and communications o Business development
Derives income in the Philippines Required capital:
US$200,000.00 one-time remittance
Securities Exchange Commission
Minimum paid up capital requirement: US$200,000.00 Foreign
equity: Oil Depots may be 100% owned and operated.
Local Government Permits, etc.
Barangay Clearance for Business Permit Purposes Municipal /
Sanitary Permit Municipal / City Business Permit Building Permits /
Civil / Structural Permits Locational Clearance / Business Permit
in the localities where the business will be
established
-
Owning Lands in the Philippines
The ownership of private lands in the Philippines is reserved to
Philippine citizens and corporations that are considered Philippine
nationals. Foreign nationals and foreign companies may indirectly
own private lands in the Philippines by taking a minority interest
up to the extent of 40% in corporations that are considered
Philippine nationals. As an alternative to owning private lands,
may also lease land. Lease taken by a foreign national or a foreign
entity can be for a term of 25 years and may be renewed for another
25 years.
For the purpose of establishing industrial estates, factories,
assembly or processing plants, agroindustrial enterprises and other
similar endeavors, law allows a maximum lease term of 50 years
renewable for another 25 years. A lease under the Investors Lease
Act is required to be registered with the Philippine Department of
Trade and Industry.