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The Cebu Experience

Investment Promotion
www.cebuinvest.com

Cebu Investment Promotions Center

A presentation during the

Capability Building on Investment Promotion

20 November 2009 Tacloban City


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Why Investment Promotion To successfully attract foreign and local investments, we have to tool up for it. Therefore, the need to create an

INVESTMENT PROMOTIONS CENTER


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with very focused functions.


Cebu Investment Promotions Center

The Logic Behind the Creation of


AN INVESTMENT PROMOTIONS CENTER

The economic future of a place cannot be left to HAPPENSTANCE. Rather, it must be the result of a studied, deliberate & managed EFFORT.

The principal task of the IPC is the generation of Foreign and Local Direct Investments of the type & conditions that the IPC predetermines. Investment Promotions is a field of management. Ergo, it must be done systematically, methodically, professionally & in "ONE VOICE". 6/12/12
Cebu Investment Promotions Center

The Argument for SINGING IN ONE VOICE


N.B. Even before we start to sing in ONE VOICE, we must be singing the SAME SONG When we learn to sing the SAME SONG in ONE VOICE, we will assure ONE UNIFYING THEME in ONE PITCH & eliminate the discord that arises from CROSSED SIGNALS, MIXED SIGNALS & CONFLICTING SIGNALS. Center Cebu Investment Promotions

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CAPABILITY
BEFORE
OPPORTUNITY
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Cebu Investment Promotions Center

Designing an Investment Promotion Program can be likened to baking a cake.

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Cebu Investment Promotions Center

What is the first thing that you should do in baking a cake?

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Cebu Investment Promotions Center

Decide which cake to bake!

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Cebu Investment Promotions Center

Next Step: Provide the base

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Cebu Investment Promotions Center

Next Step: Provide ingredients and procedure

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Cebu Investment Promotions Center

Next Step: Put the icing

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Cebu Investment Promotions Center

Putting It Together

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Cebu Investment Promotions Center

Putting It Together: Investment Promotion


Icing: Amenities (medical, school, shopping facilities) Cake Ingredients: Hardware: Software: Infrastructure Bureaucracy Human Peopleware: resources

Base: Peace and order, etc.


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Cebu Investment Promotions Center

MUST ACTIVITIES IN INVESTMENT PROMOTIONS

1.

Planning to Define Focus 1.1. Agri/Aqua/Forestry Sector 1.2. Industry Sector 1.3. Services Sector Capability Building 2.1. Hardware - Physical Infrastructure 2.2. Software - Government and Private Sector Bureaucracy 2.3. Peopleware - Labor and Management 2.4. Community Amenities

2.

3.

Actual Investment Promotions 3.1. Promotional Collateral 3.2. Development of Presentation/Spiel 3.3. Development of Salesmen 3.4. Identification/determination of Target Markets 6/12/12

Cebu Investment Promotions Center

DEVELOPING THE STRATEGY DOCUMENT Industry Sectors to be targeted by the agency in the short term (1-2 yrs) and in the medium term (3-5 yrs)

Key geographic areas of focus Promotional approaches to be used to reach these firms, and reasons for choosing them Changes, if any, in the organization, functional responsibilities and staff responsibilities Cost of implementing the strategy and source of funding

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Cebu Investment Promotions Center

Understanding Foreign Direct Investments

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Cebu Investment Promotions Center

Why FDIs

Wealth in a country is generated by:


Entrepreneurial profit Purchasing power from quality employment

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Cebu Investment Promotions Center

Employment Statistics Philippines


No. Of Filipinos 45% in Labor Force 10% of Labor Force Unemploye d 50% of Labor Force Underemploye d
Definition of Underemployed : Cannot work 40 hrs./week, 52 weeks/year

75 M 34 M 3.4 M 17 M

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Cebu Investment Promotions Center

CEBU SCENARIO:
Lab or Force ( 45% of t alpop. ot )

Total C eb u P op u l on 3. M ati 0 1. M 35

C om p l etel U n em p l y oyed ( 10% of Labor Force)130, 000 U n d erem p l oyed ( 50% of Labor Force)670, 000

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Cebu Investment Promotions Center

C A P I L R EQ U I ED TO TA R P R O V I E FU LL D EM P LO Y M EN T
A ssu m p ti s: on a. O n l 50% of total u n em p l y oyed an d u n d erem p l oyed w an t fu l l em p l oym en t b . C ap i / tal Lab or R ati o: P 500, 000
Phils.: 10.2 M x P500,000 P5.1 Trillion Cebu : 400,000 x P500,000 C on cl si B : u P200on = =

Even i al Fi i i os w ere to ch i i f l lp n p n th ei l r ast cen tavo, th ere w i l n ot b e l en ou g h cap i tal to p rovi e fu l d l em p l oym en t for even 50% of al ou r l u n em p l oyed & u n d erem p l oyed .
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Cebu Investment Promotions Center

Thesis:
Cebu's prosperity today is due to a very large extent to its ability to attract Foreign Direct Investments (FDI's), particularly at the Mactan Export Processing Zone (MEPZ) and other economic zones. such sectors as The bullishness of

the shopping malls, the shipping companies...

Is due to a very significant degree... To their confidence in CEBU's ability to attract investments & generate purchasing power from quality employment. Therefore,
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Cebu Investment We must PERPETUATE our WINNING Promotions Center

O u r Targ et W i l R eq u i l re

: 300 FD I s : 270 h ectares n et sp ace(338 h ectares g ross sp ace)

W i l G en erate l

$ 4. B i l on i an n u al 5 li n i crem en tal exp orts. n 115, 500 ad d i on al d i ti rect em p l oyees P 12 B i l on i an n u al li n p ayrol l

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Cebu Investment Promotions Center

W H Y FO R EI N D I EC T I V ES TM EN TS ? G R N

Because the priority task of government is to address the problem of unemployment in the shortest possible time; Because there is not enough local capital in the Philippines to provide employment opportunities for all unemployed and underemployed; Because as a general rule, FDIs not only pay quality wages but introduce work disciplines necessary to build the right labor infrastructure for the attainment of NIC status; Because FDIs bring in and continue introducing technology in both equipment and process, as well as research and development; Because FDIs secure marketing footholds for the Philippines in countries and sectors where they sell to;
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3 Broad Factors that Determine FDI Investment


1.

Policies of Host Countries Proactive Measures Countries Adopt to Promote and Facilitate Investment Characteristics of their Economies

2.

3.

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Cebu Investment Promotions Center

1. Policy Framework for FDI


HOST COUNTRY DETERMINANTS

economic, political and social stability rules regarding entry and operations standards of treatment of foreign affiliates policies on functioning and structure of markets (especially competition and M&A policies) international agreements on FDI privatization policy trade policy (tariffs and non-tariff barriers) tax policy

2. Business Facilitation Investment promotion (including image-building and investment-generating and investment-facilitation services) Investment incentives Hassle costs (related to corruption, administrative inefficiency, etc.) Source : Social amenities (international schools, quality of life, 6/12/12 1998 World Investment Report etc.) Published by UNCTAD Cebu Investment Promotions Center

Types of FDIs.
1.

Resource or Strategic Asset- Seeking - FDI in natural resources (minerals, raw materials, and agricultural products - FDI seeking low cost or specialised labor - Acquisitions and alliances to promote longterm corporate objectives

2.Efficiency Seeking - Rationalized or integrated operations (regionally/ globally) leading to cross-border product or process specialization
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Cebu Investment Promotions Center

Types of FDIs.
3.Market Seeking
- FDI into markets previously served by exports, or into closed markets protected by high import or other barriers - FDI by supplier companies following their customers overseas - FDI that aims to adapt products to local tastes and needs, and to use local resources

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Cebu Investment Promotions Center

INVESTMENT PROMOTIONS economic presentations on Cebu as an investment destination/business location. establishing linkages with promotional agencies. INVESTOR SERVICES economic briefings plant and site visits information & statistics networking

CI C' P s FU N C TI N S O

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Cebu Investment Promotions Center

POLICY ADVOCACY infrastructure support government bureaucracy (systems & procedures) government policy SUPPORTED BY: Database Management Production of Promotional & Information Collateral Internal Financial and Administrative Services Fund Sourcing

CI C' P s FU N C TI N S O

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Cebu Investment Promotions Center

CIPC / CEBU Foundation


Organizational Chart
Managing Director Board of Directors

Executive Committee

Executive Director

Admin. Staff

Promotions

Investor Services

Policy Advocacy/ Fund Sourcing

Infrastructure

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Cebu Investment Promotions Center

CEBU INVESTMENT PROMOTIONS CENTER Board of


Mr. Geronimo Sta. Ana Trustees Chairman Atty. Agusto Go Vice Chairman Consul Enrique Benedicto Member Engr. Rogelio Q. Lim Member Consul Sabino Dapat Member Dir. Asteria Caberte Member Mr. Joel Mari S. Yu Member/ Managing Director
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w w w . c e b u i n v e s t . c o m

History of CIPC

1994 Cebu Economic and Business Foundation, Inc. is registered with SEC; Cebu Investment Promotions Center is created with the very specific mandate to promote Cebu to foreign direct investors. Original Investment Plan focused on Light Manufacturing: Precision Assembly and Electronics.

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Cebu Investment Promotions Center

CIPC is the primary reason why there are foreign direct investments in Cebu. CIPC is acknowledged as the preeminent investment promotions agency in the country. It has transferred know-how & extended consultancy services in investment promotions to over 50 LGUs and national agencies all over the Philippines.

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Cebu Investment Promotions Center

CIPC is recognized by World Bank / MIGA as a leading Investment Promotions Agency in Southeast Asia. CIPC has created the best promotional material for Cebu and has the most extensive database on the economy of Cebu.

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Cebu Investment Promotions Center

CIPC is the only local investment promotions agency in the country mentioned in the book Marketing Asian Places by Philip Kottler, et al.

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Cebu Investment Promotions Center

THANK YOU VERY MUCH

ALBERTO T. GUMARAO Deputy Center Manager Cebu Investment Promotions Center (CIPC)

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