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Speaking in the panel were Todd Schweitzer - CEO of Brankas, Clarence Bondoc - Business Development Lead of Brankas, Lanie O. Dormiendo, Officer-in-Charge Director for the International Investments Promotions Service (IIPS) of BOI, and Remedios “Medy” F. Lim - Officer-in-Charge of Services Division, Infrastructure, and Services Industries Service of the BOI.
Brankas - which currently operates in six countries - started its journey in the Philippines in 2019. BOI and other Philippine government agencies played a significant role in facilitating Brankas’ foothold in the country, giving the company a “pioneer tech” status and providing the right ecosystem to grow. Now fully established, Brankas works with multiple top tier financial institutions to enable Open Finance solutions and accelerate financial inclusion in the Philippines.
Brankas and BOI examined the current tech investment landscape in the Philippines in the webinar. Here are the three main takeaways:
Promising climate for investments
Lanie O. Dormiendo, BOI Officer-in-Charge for the International Investments Promotions Service (IIPS), shared how the Philippines remains attractive to investors, including tech companies, particularly because of the resilience it has shown before and during the pandemic.
Prior to the lockdowns, the country’s GDP growth stayed consistent at 6.6% from 2016 - 2019, citing a May 2020 report from The Economist, which ranked the Philippines 6th among emerging market economies (EMEs) and first among its Southeast Asian peers during the pandemic.
“We recognize that the global economic situation is still very challenging, but we are also happy to note the continuous business interest of foreign investors to the Philippines. BOI supports investors by providing due diligence assistance, business registration facilitation, and after-care service.”
- Lanie O. Dormiendo, BOI.
Incentives for investing companies
BOI Officer-In-Charge Division Chief Remedios Lim explained the benefits of Republic Act 11534 or Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act), offered to current and future investors in the country. Tech companies looking to invest in the Philippines can take advantage of a list of investors’ incentives such as income tax holidays (ITH), special corporate income tax, enhanced deductions, exemption on importation of capital equipment, raw materials, spare parts or accessories, VAT exemption on importation, and VAT zero-rating on local purchases.
“CREATE Act covers all investment promotion agencies (IPA) like the BOI, Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA), among others. This means all IPAs are adopting a uniform policy and offering a single menu of incentives that will provide options to firms to choose which IPA they opt to register.”
- Remedios “Medy” Lim, BOI.
A smooth journey
Brankas CEO, Todd Schweitzer, and Business Development Lead, Clarence Bondoc, shared insights on how the BOI helped throughout their initial stages and opened ways for Brankas to focus on developing products and services as a start-up in the market.
“We obtained pioneer tech status in the Philippines, which is a way for the government to endorse and provide incentives for technology companies that are bringing something new into the Philippines. It was a very smooth experience.”
- Todd Schweitzer, Brankas.
“These incentives eased those burdens. Instead of worrying about taxes or financial concerns, the incentives provide a conducive environment so that a start-up is able to focus on providing a good product to the market. Brankas’ tech status also further empowers Brankas to promote Open Finance in the Philippines.”
- Clarence Bondoc, Brankas.
The Philippines has been one of the most dynamic economies in Southeast Asia. The country has been seeing a steady growth in FDI (foreign direct investment), hitting $5bn in 2019 , according to data from the UN Conference on Trade and Development (UNCTAD) World Investment Report 2020. In fact, the last decade has seen FDI stock in the country rise from $20bn in 2010 to $88bn in 2019, signaling a growing trust.
Meanwhile, tech remains a key sector of interest for investors in the country. As of January 2021, the country has 73,91 million internet users and 82,3 million smartphone owners . However, underbanked and unbanked population rates remain high, with credit card penetration as low as 3% . BOI’s progressive incentive schemes are likely to catalyze the growth of the investment in the tech sector, allowing Open Finance technology providers like Brankas working to drive financial inclusion in the country.
Watch the full recording here to hear more about Brankas’ collaboration with the BOI in establishing operations in the Philippines. To learn more about incentives that come with the BOI registration, please review the BOI investor’s guidebook .