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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. The 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 Niño, the climatic system which wreaks periodic havoc upon the Philippines, then worsened the situation still further.
Although the Philippines was one of the countries most affected by the 1997 Asian financial crisis, it has since recovered fairly well. Current annual growth is 4.5 per cent, while industrial production has picked up by six per cent after several years of decline. Foreign aid, including a US$100 million subvention from the USA in 2002, has helped the country’s finances – a blessing at a time when the budget deficit has been growing quickly. The main blackspot is unemployment, which has grown steadily during the last few years and now stands at 11 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 has a trade surplus with most of its major trading partners, including the USA, the UK and The Netherlands.
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. Prior appointments are necessary and it is customary to exchange business cards. 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 one has 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 Philippine Chamber of Commerce and Industry, 14th Floor Multinational Bancorporation Centre, 6805 Ayala Avenue, Makati City, Philippines (tel: (2) 844 5713; fax: (2) 843 4102; email: pcci@philcham.com; website: www.philcham.com).
Conferences/Conventions: Many establishments belong to the Philippine Convention and Visitors Corporation (PCVC). It has offices in New York, Sydney and Tokyo. For further general information, contact the PCVC (see Contact Addresses section).
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