Investment Immigration looks at the Philippine economy: Recently, the topic of the Asian Infrastructure Investment Bank (AIIB) has been heating up. According to an ADB research report, Asia will require $8 trillion in infrastructure funding over the next decade. Mainland China, eyeing this massive demand, has actively invited various countries to participate in this initiative. Although the Philippines, which was originally set to join the AIIB, withdrew, the country's national infrastructure remains a major business opportunity.
According to the World Economic Forum (WEF) "Global Competitiveness Report 2013," the Philippines ranked 96th out of 148 economies in various infrastructure categories, with construction quality ranking among the lowest (116th).
Consequently, the Philippine government is actively releasing policies to improve infrastructure, proposing Public-Private Partnership (PPP) projects. Based on concession agreements, the Philippine government hopes to establish partnership-based cooperation with private enterprises to jointly build urban infrastructure or provide public services. In 2014, the Philippine government invested 399 billion pesos (approximately $9.5 billion) to improve domestic public infrastructure systems such as roads and bridges.
The era of political instability in the Philippines is gradually fading, allowing the government to focus on public construction. In the past, the Philippines only invested about 3% of its GDP in infrastructure annually. Taking transportation as an example, out of 213,151 kilometers of roads nationwide, only 25.56% are properly paved.
Regarding telecommunications, infrastructure development was intermittent in the past due to political instability. As a result, Filipinos, whose mobile penetration rate approached 105% in 2014, prefer SMS services over mobile voice networks with inconsistent reception. In 2014, the total number of SMS messages sent daily in the Philippines reached nearly 2 billion, indicating that the Philippine mobile communications market is still young and growing.
A similar situation exists with broadband networks. Although the average Filipino spends as much as 174 minutes per day using mobile internet—32 minutes more than the global average of 142 minutes—the internet speed in the Philippines is among the most embarrassing, even compared to other lagging Southeast Asian countries, with an average speed of only 3.6 Mbps.
Furthermore, insufficient power supply is a major point of criticism. Energy shortages have kept electricity prices in the Philippines high. The average household in Metro Manila consumes nearly 400 kWh of electricity per month, and the pricing method is progressive based on consumption. If a household consumes 400 kWh per month, the average cost per unit is nearly 8 New Taiwan Dollars. If consumption exceeds 500 kWh, the cost per unit is around 8.5 New Taiwan Dollars. This represents a massive expense for the average Filipino family.
A vast domestic market and high economic growth are key incentives attracting investors to the Philippines.
