HSBC Treasury Management Profiles 2018 -

Current section, Introduction


The Philippines has benefited from robust and sustained economic growth in recent years on the back of strong exports and domestic demand, record-high cash remittances from Filipinos working abroad and high foreign direct investment (FDI) inflows. Remittances from overseas workers, which in 2017 totalled USD31.29 billion, a 5.3 per cent increase on 2016, are an important source of income for families and a key driver of private consumption. Personal remittances accounted for 10 per cent of GDP and 8.3 per cent of GNI in 2017. FDI across all sectors of the economy in the 11 months to November 2017 reached USD8.7 billion, encouraged by the government's implementation of national infrastructure projects (the government plans to spend PHP8.4 trillion on infrastructure until 2022) and by its economic reforms. The economy expanded 6.7 per cent in 2017, slightly below the 6.9 per cent recorded in 2016, making it one of the region's best-performing economies in 2017. The government is targeting GDP growth of 7 per cent to 8 per cent annually over the next six years although achieving this target depends largely on the government delivering on its infrastructure projects. Improving the business climate for investors is also seen as a top priority for the government. In the World Bank's Ease of Doing Business ranking, the Philippines is 99th out of 190 countries and in the World Economic Forum's Global Competitiveness Report 2016-17, the country ranked 137th out of 138 for the number of procedures required to set up a business.

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Legal and regulatory

  • Foreign exchange accounts can be held by residents both domestically and abroad. Resident domestic currency (PHP) accounts cannot be held aboard, but are convertible into foreign currency
  • Non-resident bank accounts are permitted in both foreign and domestic currency. Non-resident domestic currency accounts are convertible into foreign currency; however, restrictions apply
  • All transactions between residents and non-residents must be reported to the relevant government department on a quarterly basis for balance of payments purposes. Companies engaging in FDI in the Philippines must file applications for registration with the BSP within one year of the transfer of assets or inward remittances

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  • Resident companies are taxed on their worldwide income
  • Foreign companies and branches of foreign companies are taxed on their Philippine-sourced income only
  • The rate of corporate income tax is 30 per cent
  • Regional operating headquarters of multinational companies are taxed at 10 per cent
  • Dividends distributed by a Philippine company to a non-resident are taxed at a rate of 15 per cent, provided the country of the non-resident foreign corporation allows a tax credit of 15 per cent. Otherwise, the dividends are taxed at 30 per cent. Other payments to a non-resident may be subject to a final tax, eg management fees at 30 per cent

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Payment instruments and systems

  • Cash is the most important payment medium in the Philippines, particularly for low-value retail transactions. Cheques are the dominant cashless payment instrument for both retail and commercial transactions. Just 1 per cent of the 2.5 billion transactions that take place in the Philippines each month are electronic. Payment card use is rising. E-cards are hugely popular
  • The Philippines operates four national payment systems: PhilPaSS, an RTGS system; PDDTS, an online RTGS system; the EPCS, for low-value transfers; and the ECCS, for cheque payments. In November 2017, PESONet, the country’s first Automated Clearing House (ACH) under the National Retail Payment System, was launched. PESONet is envisioned as an electronic alternative to the paper-based cheque system

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Cash management

  • Notional pooling is not permitted. Domestic cash concentration is permitted
  • A range of collection services is available

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Electronic banking

  • Electronic banking is available in the Philippines. There is no bank-independent electronic banking standard
  • Internet and mobile banking services are provided by all of the country’s banks for both corporate and retail purposes. Mobile banking is commonly offered to companies without immediate access to bank branches. There are 27 banks offering mobile banking services and 49 offering a hybrid mobile and internet banking service

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To read the full report on Philippines and to discover more on these and other topics, including banking and trade, please click on the Download PDF option.


  • World Bank
  • Philippine Statistics Authority
  • Bangko Sentral ng Pilipinas
  • World Economic Forum

The materials contained on this page were assembled in May 2017 (unless otherwise dated).



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