Filipino Business Competitiveness in Comparison to Asian Countries
February 2013 Japan External Trade Organization (JETRO) Manila
CONTENTS 1. Profit Center 1.1 Estimated Operating Profit in 2012 1.2 Estimated Operating Profit in 2012 (More than 50% of Business is from Export Account)
2. Good Management 2.1 Difficulty in Recruiting General Staff 2.2 Number of Strikes/Lockouts 2.3 Trouble of Time-consuming Customs Procedures 2.4 Trouble of Time-consuming Administrative Procedures
3. Reasonable Salary 3.1 Salary Base up Rate (2012-2013) 3.2 Annual Salary for Manufacturing Staff 3.3 Annual Salary for Manufacturing Engineer 3.4 Annual Salary for Manufacturing Manager 3.5 Annual Salary for Non-Manufacturing Staff 3.6 Annual Salary for Non-Manufacturing Manager
4. Incentives Reason for Embarkation to each City
5. Business Challenges in the Philippines 5.1 Business Challenges in Asia 5.2 Business Development Plan in Next 1-2 Years
1. Profit Center
1.1 Estimated Operating Profit in 2012 India
20.3
41.2
38.5
Myanmar 45.0
40.0
15.0
China 57.2
23.7
19.1
Profit
Vietnam
Break Even
20.3
19.5
60.2
Loss
Thailand 10.5
72.5
17.0
Indonesia 11.7
74.4
13.9
Philippines 14.9
71.9
0%
20%
40%
60%
80%
Note: Survey was conducted on Oct‐Nov., 2012
13.2
100%
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
1.2 Estimated Operating Profit in 2012 (More than 50% of Business is from Export Account) India 55.3
15.8
54.6
20.1
28.9
China 25.3
Vietnam 58.3
Profit
20.1
21.5
Break Even
Thailand
23.0
13.5
63.5
Loss
Indonesia 69.8
Philippines
23.3
72.4
0%
20%
17.2
40%
60%
80%
7.0 10.3
100%
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
2. Good Management
2.1 Difficulty in Recruiting General Staff
China
35.5
Thailand
34.4
Myanmar
20.0
Vietnam
13.8
Indonesia
6.8
Philippines
4.3
Unit: %
0
10
20
30
40
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
2.2 Number of Strikes/Lockouts (Unit: Number ）
２００８
２００９
２０１０
２０１１
Philippines
５
４
８
２
Thailand
７
５
３
１４
Vietnam
７２０
２１８
４２２
８５７
India
４２１
３４５
３８２
３８９
（Source) Philippines：National Conciliation and Mediation Board Thailand：Department of Labour Protection and Welfare Vietnam：Ministry of Labor, War Invalids & Social Affairs India：Ministry of Labour & Employment, Labour Bureau
2.3. Trouble of Time‐consuming Customs Procedures Myanmar
55.6
Vietnam
53.9
Indonesia
48.5
China
43.5
Philippines
27.3
Thailand
24.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Unit: %
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
2.4 Trouble of Time‐consuming Administrative Procedures Myanmar
85.0
Vietnam
61.5
Indonesia
43.8
Philippines
34.5
Thailand
20.6
0
20
40
60
80
Unit: %
100
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
3. Reasonable Salary
3.1 Salary Base up Rate (2012‐2013) Against Previous Year Vietnam (215)
17.5
Indonesia (139)
17.0
India (231)
11.8
China (707)
9.4
Thailand (618)
6.5
Malaysia (176)
5.3
Philippines (97)
5.2
Note: Figures in ( ) indicates the number of companies who responded in this survey
Unit: %
0
5
10
15
20
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
3.2 Annual Salary for Manufacturing Staff China (396)
6,734
Thailand (317)
6,704
Malaysia (138)
5,942
Philippines (50)
4,581
India (75)
4,577
Indonesia (82)
4,551
Vietnam (133)
2,602
0
2000
4000
6000
US $ Note: Annual Salary means the total amount received per employee (base salary, allowance, social security, overtime, bonus, etc).
8000
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
3.3 Annual Salary for Manufacturing Engineer Malaysia (128)
14,451
Thailand (305)
12,520 11,321 10,839
China (363) India (76) Indonesia (73)
US $
8,629 7,636 5,441
Philippines (49) Vietnam (118) 0
5000
10000
15000
20000
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
3.4 Annual Salary for Manufacturing Manager Malaysia (128)
30,083
Thailand (309)
27,204
India (88)
22,091
China (372)
19,761
Indonesia (77)
18,147
Philippines (47)
17,498
Vietnam (113)
12,245
0
5000
10000
15000
20000
25000
30000
US $
35000
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
3.5 Annual Salary for Non‐Manufacturing Staff Thailand (211)
13,464
China (243)
13,278
Malaysia (60)
13,255
India (116)
9,536
Philippines (37)
7,888
Indonesia (53)
7,492
Vietnam (64)
6,755
0
5000
10000
US $
15000
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
3.6 Annual Salary for Non‐Manufacturing Manager Malaysia (59)
31,217
China (214)
29,165
Thailand (191)
28,448
India (107)
24,796
Indonesia (43)
22,621
Philippine (36)
20,169
Vietnam (53)
16,422
0
5000
US $
10000 15000 20000 25000 30000 35000
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
4. Incentives
Reason for Embarkation to each City Incentives Free Trade Policy Wellmaintained Traffic Infrastructure Market Volume Request from Assembler Cheap Labor Cost
Jakarta
Manila
Bangkok
Hanoi
2000's
3.1% 2.8% 0.0% 2.8%
26.9% 26.1% 3.0% 2.9%
21.4% 8.1% 3.6% 5.4%
21.1% 14.5% 0.0% 3.6%
1990's
25.0%
12.7%
5.4%
7.9%
2000's
22.2% 9.4% 11.1% 9.4% 5.6% 0.0% 0.0%
4.3% 16.8% 27.5% 2.5% 1.4% 5.1% 7.2%
2.7% 26.8% 21.6% 8.9% 5.4% 1.8% 5.4%
5.5% 15.8% 18.2% 15.8% 10.9% 5.3% 1.8%
1990's 2000's 1990's
1990's 2000's 1990's 2000's 1900's 2000's
Source: Survey of ERIA, 2007 15
5. Business Challenges in the Philippines
Myanmar
India
Power shortage 100.00 or blackout
Wage increase
Time consuming administrative 85.00 procedures
Difficulty in local procurement of raw materials & parts
Wage increase
80.00
Shortages of land/offices, rising 75.00 land prices/rent Quality of employees
Vietnam 71.10
66.40
Wage Increase
Indonesia 81.50
Difficulty in local procurement of 74.50 raw materials and parts
Wage increase
Thailand 82.20
Wage increase
China 77.90
Competitor's Competitor's market shares 59.00 market shares 57.20 are growing are growing
Wage increase
84.40
Lack of employee performance/ 55.50 employee awareness for localization
Malaysia
Philippines
Wage 70.70 increase
Difficulty in local procurement of raw 67.70 materials and parts
No more Lack of employee room for performance/ 55.80 employee awareness 59.50 cost‐ for localization cutting
Lack of employee Lack of employee Time consuming Competitor's Quality of performance/empl performance/em administrative 61.50 oyee awareness 55.70 ployee awareness 55.00 market shares 53.40 50.40 employees procedures are growing for localization for localization
Power shortage or blackout
Lack of employee Competitor's performance/empl market shares 63.50 oyee awareness 60.50 are growing for localization
Difficulty in recruiting executive staff
53.40
Difficulty in No more recruiting 50.30 room for cost‐ 50.90 executive staff cutting
Underdeveloped Underdeveloped Major clients Time‐consuming legal systems and legal systems and 70.00 60.90 58.70 53.40 requesting for 50.10 unclear legal unclear legal tax procedures lower prices system operation system operation
Quality of employees
50.40
Lack of employee Time‐consuming Difficulty in Time consuming performance/ 65.00 administrative 55.90 56.30 recruiting middle 51.10 employee awareness tax procedures management staff procedures for localization Difficulty in Complicated Difficulty in local Quality of procurement of raw customs clearance 55.60 recruiting 54.70 50.00 employees materials and parts procedures executive staff Inadequate logistics 60.00 infrastructures Underdeveloped legal system and unclear legal system operation
Time‐consuming Complicated customs 52.50 customs clearance 53.90 procedures procedures
Quality of employees
52.20
Competitor's Increase in market shares are 57.90 51.60 procurement costs growing Lack of employee Complicated performance/empl customs clearance 55.60 oyee awareness for 50.00 procedures localization
Difficulty in recruiting middle management staff Difficulty in 55.00 recruiting executive staff Time consuming tax procedures
Restrictions on 50.00 foreign remittance
Difficulty in quality control
51.50
5.1 Business Challenges in Asia (Rated by Japanese Expatriates in each country) • Items described herein are considered major and serious issues/challenges by the managers of the Japanese firms in each country. • Only the items with 50% or higher survey response were included. • Specific answers are being shown for similar questions with the response rate of 50% or higher. • The survey was conducted from October 9 to November 15, 2012.
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) Dec. 2012/JETRO
5.2 Business Development Plan in Next 1‐2 Years India 15.1
83.6
1.3 Expansion
Indonesia 77.3
21.0
Vietnam
1.7 0.4
32.1
65.9
1.6
Thailand
0.4
64.2
33.4
China
4.0
42.0
Downsizing
1.9 1.8
52.3
Remaining
Relocating to other Country or Withdrawal
Philippines 50.0
48.2
0%
20%
40%
60%
1.8
80%
100%
(Source): Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) ,Dec. 2012/JETRO
