HSBC Treasury Management Profiles 2018 -

Current section, Introduction

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.

To read the detailed report, please click on the Download PDF option

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

To read the detailed report, please click on the Download PDF option

Taxation

  • 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

To read the detailed report, please click on the Download PDF option

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

To read the detailed report, please click on the Download PDF option

Cash management

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

To read the detailed report, please click on the Download PDF option

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

To read the detailed report, please click on the Download PDF option

 

 


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.

Sources:

  • 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).

 

Disclaimer

This document has been produced by HSBC Bank plc and members of the HSBC Group (“HSBC”), together with their third-party contributor, WWCP Limited. We make no representations, warranties or guarantees (express or implied) that the information in this document is complete, accurate or up to date. We will not be liable for any liabilities arising under or in connection with the use of, or any reliance on, this document or the information contained within it. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. You should not act upon the information contained in this document without obtaining your own independent professional advice. The information contained in this document has not been independently verified by HSBC.

This document contains information relating to third parties. The information does not constitute any form of endorsement by these third parties of the products and/or services provided by HSBC or any form of cooperation between HSBC and the respective third parties.

Under no circumstances will HSBC or the third-party contributor be liable for (i) the accuracy or sufficiency of this document or of any information, statement, assumption or projection contained in this document or any other written or oral information provided in connection with the same, or (ii) any loss or damage (whether direct, indirect, consequential or other) arising out of reliance upon this document and the information contained within it.

HSBC and the third-party contributor do not undertake, and are under no obligation, to provide any additional information, to update this document, to correct any inaccuracies or to remedy any errors or omissions.

No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of HSBC and the third-party contributor. Any products or services to be provided by HSBC in connection with the information contained in this document shall be subject to the terms of separate legally binding documentation and nothing in this document constitutes an offer to provide any products or services.