Opportunities for Taiwanese Investors in Philippine Economic Zones

2. “OPPORTUNITIES FOR TAIWANESE INVESTORS IN PHILIPPINE ECONOMIC ZONES” A Presentation for the: PHILIPPINE INVESTMENT SEMINAR by DR. LILIA B. DE LIMA PEZA Director General and Undersecretary, Department of Trade and Industry 3/F, Grand Ballroom, Section II Grand Hyatt Taipei, Taipei, Taiwan 9:00 AM, March 27, 2015

3. Philippine Economic Zone Authority (PEZA) • Attached to the Department ofTrade and Industry • Promotes Investments • Creates Employment • Generates Exports

4. 317 Economic Zones Nationwide 68 Industrial and Export Processing Zones 43 IT Parks 166 IT Centers 19 Tourism Ecozones 2 Medical Tourism Parks 19 Agro-Industrial Parks As of Jan 2015

5. LOCATOR INVESTMENTS BY NATIONALITY ( 1995 – 2014 ) 22.78 % Filipino 15.87 % American 29.71 % Japanese 10.29 % Dutch 7.98 % British 3.39 % Korean 3.07 % Singaporean 1.60 % German 0.96 % Swiss 4.35 % Others

6. LOCATOR INVESTMENTS BY PRODUCT SECTOR ( 1995 – 2014 ) 9.78 % Information Technology Services 9.29 % Metals/Fabricated Metal Products 8.94 % Tourism 6.00 % Transport (Shipbuilding, Car Parts, Equipment) 37.45 % Electronics / Semiconductors 4.58 % Electrical Machinery and Apparatus 2.43 % Medical, Precision and Optical Instruments 1.31 % Medical Tourism 1.43 % Rubber and Plastic Products 18.79 % Other Manufactures

7. WHY PHILIPPINES

8. PHILIPPINE STRENGTHS • 6.1% GDP Growth, 2nd Highest in Asia in 2014 • 100 Million Population as of July 27, 2014

9. PHILIPPINE STRENGTHS Investment Grade Credit Rating

10. PHILIPPINE STRENGTHS Investment Grade Credit Rating

11. PHILIPPINE STRENGTHS Investment Grade Credit Rating

12. PHILIPPINE STRENGTHS Investment Grade Credit Rating Rating and Investment Information, Inc.

13. PHILIPPINE STRENGTHS Investment Grade Credit Rating

14. The Filipino Work Force • High literacyrate of 94.6% • Englishspeaking

15. The Filipino Work Force • Easy to train • Hardworking

16. The Filipino Work Force • Very friendly

17. In the I.T. Sector Filipino Workers are considered Global Knowledge Workers because they are intelligent and able to compete at the highest levels among the best in the world.

18. The Filipino Work Force 1 million Filipinos reach working age every year, and half of them are college graduates.

19. Foreign Investor-Friendly Policies • Basic rights of Investors are guaranteed: • Right to remit profits • Right to pay foreign obligations • Right to repatriate investments • 100% Foreign ownership of companies

20. STRATEGIC LOCATION Russia Canada Germany United Kingdom EUROPE United States of America France Korea Japan China Middle East Taiwan Atlantic Ocean Philippines Hong Kong Africa India Thailand Malaysia South America Singapore Pacific Ocean Indonesia Australia New Zealand

21. HOSPITABLE and COMFORTABLE SECOND HOME Very friendly attitude of Filipinos (Result of a survey conducted on expatriates in Asia)

22. Housing at very reasonable rates (Result of a survey conducted on expatriates in Asia)

23. International schools for expatriates' children (Result of a survey conducted on expatriates in Asia)

24. Best sporting and recreational facilities (Result of a survey conducted on expatriates in Asia)

25. World class health services (Result of a survey conducted on expatriates in Asia)

26. WHY PEZA

27. Incentives • Income Tax Holiday (ITH) • 6 to 8 years for pioneer project • 4 to 6 years for non-pioneerproject • After the ITH - Special 5% tax ongross income less allowabledeductions in lieu of all nationaland local taxes

28. Incentives • 3. Tax and duty free importation of capital equipment, spare parts, supplies and raw materials • 4. Domestic sales allowance of up to 30% of total sales

29. Incentives • Zero Value Added Tax (VAT) Rateon all local purchases to includetelecommunications, power andwater bills • Exemption from payment of localgovernment taxes and fees

30. Incentives • Employment of foreign nationals • Special visa for foreign investorsand immediate family members • 9. Unequalled service by PEZA

31. THE PEZA BRAND OF SERVICE

32. 1. PEZA is a One-Stop Shop • Building and Occupancy Permits • Import and Export Permits • Online Import and ExportProcedures and E-Payment System

33. Special multiple-entrynon-immigrant Visa • Environment Clearance Certificate • Exemption from LocalGovernment Permits and Fees • Simplified registration process– forms can be downloadedfrom website

34. 2. PEZA is a Non-Stop Shop • Provides 24 hours a day, 7 daysa week of continuous service • The Director General and othertop officials are on call 24 hoursa day, 7 days a week

35. 3. In PEZA, there is NORED TAPE

36. 3. In PEZA, there is ONLYRED CARPETTREATMENT

37. 4. In PEZA, there is NO GRAFT NO CORRUPTION

38. PEZA is ISO 9001:2008 Certified For all processes, at all levels, in all offices, nationwide.

39. IFC – World Bank cited only PEZA for Best Practice among Economic Zones worldwide “Under PEZA, the Philippines has shown dramatic improvements in Investment Climate.End Result – PEZA is a shining example of successful regulatory reform improving overall investment climate in the country.”

40. Reformist Government • Under President Aquino’s “Daang Matuwid” • (Straight Path) Policy: • Good Governance • Transparency • No Corruption

41. Appreciation of Investment Environments(December 2014)JETRO 2014 Survey of Japanese-Affiliated Firms in Asia and Oceana

42. Less Linguistic/Communication Problems (%) Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

43. Easy to hire local staff(General worker/staff/clerk) (%) Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

44. High Quality of Employees(General worker) (%) Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

45. High Employee Retention Rates (%) Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

46. Tax Incentives(Corporate Tax Holidays etc.) (%) Source: 2014 Survey of Japanese-Affiliated Firms in Asia and Oceania, JETRO

47. Number of Strikes/Lockouts (Unit: Number) Source China: China Labour Bulletin Indonesia: Ministry of Manpower and Transmigration Philippines: National Conciliation and Mediation Board Thailand: Department of Labour Protection and Welfare Vietnam: Vietnam General Confederation of Labor

48. TIPI Philips Fairchild Analog Sanyo On Semi Rohm TOP CHIPMAKER 8 OUT OF THE WORLD’S TOP 20 CHIPMAKERS ARE OPERATING IN THE PHILIPPINES Samsung Source: SEIPI

49. TOP HDD PRODUCER FOUR OF THE LARGEST HDD PRODUCERS IN THE WORLD ARE IN THE PHILIPPINES NEC Toshiba Fujitsu Hitachi Source: SEIPI

50. THE WORLD’S TOP ELECTRONICS FIRMS • CEBU MITSUMI –manufactures • computer peripherals and components such • as CD-R, CD-RW, optical pick up • AMKOR – manufactures IC packaging with 400 • formats, from leadframe to BGA solutions • EPSON – one of the top 3 terminal printer production • base of global Epson group, producing its 10 millionth • printer • LEXMARK – produces 40 million printheads/year • CONTINENTAL – produces ABS, sensors • SUNPOWER – produces solar panels Source: SEIPI