Many foreign companies choose to invest in the Philippines for two main reasons – skilled workforce and competitive labor costs. The Philippine Economic Zone Authority (PEZA) stated that companies prefer Filipino workers because they are easily trained, industrious, computer literate, can speak English well and are willing to work longer hours at a cheaper cost. “These are the main reasons why the Philippines continues to attract more foreign investors,” a PEZA representative added.

There’s a constant annual increase in the number of foreign companies setting-up business operations in the Philippines. A big percentage of the foreign direct investment (FDI) in the country is from the business process outsourcing (BPO) sector. This can also be attributed to the special incentives given to companies in the BPO sector when they set-up operations or branches in the Philippines.

The Foreign Investments Act of 1991 (RA 7042) governing foreign investments in the Philippines, liberalized economic policies and allowed market growth since its passage. PEZA, for one, grants BPO operations within PEZA zones or building some incentives including, but not limited to, reduced taxes and tax exemptions or reductions for information technology equipment purchases. Investing companies in the BPO sector are entitled to claim this incentive through the Board of Investments. 

In the first two quarters of this year, FDIs have increased by 189%, attributed to the burgeoning confidence of foreign investment companies to the country. Along with the increase in foreign investment, the Philippine government, working hand in hand with various stakeholders, is devoting more resources to improvements in the infrastructures for businesses; revisiting the rules and regulation of RA 7042 to further attract more investors; highlighting the strategic location of the Philippines for businesses development and the continuous effort to upgrade the skills of the Filipino workforce.