THE PHILIPPINES REPORT

Compiled by:

The American Chamber of Commerce (AmCham) in Singapore 1 Scotts Road #23-03/04/05 Shaw Centre Singapore 228208

AND

The United States Chamber of Commerce 1615 H St NW Washington DC 20062-2000

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Copyright Standards

This document contains proprietary research, copyrighted materials, and literary property of the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, and AmCham Philippines. It is for the guidance of your company only, and is not to be copied, quoted, published, or divulged to others outside of your organization without the permission of the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, and AmCham Philippines. This document is of great value to the American Chamber of Commerce in Singapore, U.S. Chamber of Commerce, and AmCham Philippines. Accordingly, international and domestic laws and penalties guaranteeing patent, copyright, trademark, and trade secret protection secure the ideas, concepts, and recommendations related within this document. No changes may be made to this document without the permission of the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, and AmCham Philippines.

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TABLE OF CONTENTS

1. Introduction 4

Research Background & Objectives 4

Survey Methodology 4

Brief Outline of Results 5

2. Business Outlook 6

Current Business Climate 6

Importance of ASEAN Markets in Global Business 6

Trade and Investment in ASEAN 8

Business Direction and Movement in ASEAN 10

ASEAN Integration 11

ASEAN FTA’s 12

Profit Outlook 13

Workforce Expansion 13

Expatriate Satisfaction 14

3. Factors Impacting Business in the Philippines 15

Local Business Environment Factors 15

Major Strengths 15

Major Concerns 16

Other Local Business Environment Factors 16

International Schools 17

4. Conclusion 17

Appendices 18

(A) Sample Profile 18

Table A-1: Workforce and Turnover

Table A-2: ASEAN Turnover

Table A-3: Primary Responsibility

(B) Local Factors Impacting Business 20

Table B-1: Satisfaction with Factors

Table B-2: Satisfaction with Local Government

(C) Expansion in ASEAN over the Next Two Years 21

Table C-1: Top 3 Reasons for ASEAN Expansion

Table C-2: Top Reasons for ASEAN Importance over Next Two Years

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1. INTRODUCTION

Research Background & Objectives

The American Chamber of Commerce in Singapore (AmCham Singapore) and the United States Chamber of Commerce, in cooperation with other AmChams in the ASEAN region, conducted a study among U.S. companies based in seven Southeast Asian countries: Cambodia, Indonesia, Malaysia, Singapore, the Philippines, Thailand, and Vietnam. This study is now in its 11th year. The purpose of the study is to understand members’ outlook on business growth in Southeast Asia and their perceptions about a series of local factors. The members surveyed were senior executives, working with a company held by or with an American majority interest. For the first time in 2012, multiple senior executives from each company were surveyed. AmCham Singapore and the U.S. Chamber of Commerce developed a survey design using a web-based instrument. This report presents the feedback received from executives of U.S. companies in THE PHILIPPINES.

Survey Methodology

Survey Scope: Senior Executives of U.S. Companies based in the Philippines

Sample Size: A list of 238 AmCham members with e-mail contacts was provided by AmCham Philippines. Response rate was about 17% (40) at the end of the data collection period.

Data Collection Method: Web-based, self-administered survey. No enforcement on participation.

Data Collection Period: June 15, 2012 to July 3, 2012 Note: Percentages may not add up to 100% due to respondents choosing “I don’t know” or “Not applicable.”

Sample Profile (See Appendix A)

Most respondents (63%) are responsible for only the Philippines.

The percentage of respondent member companies in the services sector and manufacturing sector are 72% and 12%, respectively.

45% of respondents have a workforce between 50 and 500 employees.

The majority of respondents (68%) had a turnover of between $1 million and $50 million in the Philippines in 2012. Turnover in the Philippines accounted for less than 5% of global turnover for 62% of respondents, and between 5% and 25% of ASEAN turnover for 39% of respondents. Other ASEAN countries with significant turnover for the Philippines are Singapore (28%) and Thailand (13%).

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BRIEF OUTLINE OF RESULTS

BUSINESS OUTLOOK

ASEAN Economic Outlook:

92% of respondents maintain a positive or very positive outlook for the ASEAN region as an investment opportunity for their companies. Current Business Climate:

Respondents facing significant financing constraints decreased from 24% in 2011 to 18% in 2012.

Most respondents (80%) are not facing higher costs of borrowing in 2012. Importance of ASEAN Markets in Global Business:

63% of respondents report that ASEAN markets have increased in importance to their companies in the past two years.

The majority of respondents (58%) expect ASEAN importance to increase in the next two years. Business Direction and Movement in ASEAN:

83% of respondents expect to expand in ASEAN.

Profit Outlook:

73% expect a profit increase in 2012.

88% expect a profit increase in 2013. Workforce Expansion:

75% expect a workforce increase in 2012.

30% expect an increase of 20 to 50%.

Figure 1: Profit Outlook for 2013

Figure 2: Economic Outlook for Investment Opportunities in ASEAN

Figure 3: Location of Expansion in ASEAN

Major Strength (% Satisfied) Major Concerns (% Dissatisfied)

Sentiment towards the U.S. (83%) Corruption (73%)

Availability of trained personnel/efficient manpower (78%)

Laws and Regulations (43%)

Availability of low cost labor (73%) Ease of moving products through customs (43%)

Office lease costs (60%) Infrastructure (40%)

Personal security (58%)

Stable government and political system (53%)

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2. BUSINESS OUTLOOK

2.1 Current Business Climate Table 2.1 Financing Constraints and Costs of Borrowing 2009 2010 2011 2012 Is your company facing significant financing constraints?

Yes 39% 10% 24% 18%

No 61% 90% 76% 83%

Is your company facing higher costs of borrowing?

Yes 29% 8% 24% 20%

No 71% 92% 74% 80%

In 2012, there are fewer companies facing significant financing constraints (18%) and higher costs of

borrowing (20%) than there were in 2011 (both 24%).

These figures have fluctuated in the past 4 years without any consistent trends.

2.2 Importance of ASEAN Markets in Global Business Table 2.2.1 Importance of ASEAN over past two years

2009 2010 2011 2012

Have ASEAN markets become more important or less important, in terms of worldwide revenue, to your company in the past two years?

More Important 54% 51% 57% 63%

Remained the Same 42% 43% 37% 28%

Less Important 4% 4% 0% 8%

The majority of respondents (63%) stated that ASEAN markets have become more important to their company in the last two years in terms of worldwide revenue, reaching an all-time high.

8% of respondents believe that ASEAN markets have become less important in the last two years, whereas no respondents felt this way in 2011.

Table 2.2.2 Importance of ASEAN over next two years

2007 2008 2009 2010 2011 2012

Does your company feel that ASEAN markets will be more important, less important, or have the same importance for your company’s worldwide revenues in the next two years?

More Important 65% 69% 66% 67% 69% 58%

Remain the Same 33% 23% 30% 29% 27% 38%

Less Important 2% 8% 4% 2% 0% 5%

This is the first year that respondents are less positive about the next two years than the last two years.

Most respondents (58%) feel that ASEAN markets will be more important for their company’s worldwide revenues in the next two years, a significant decrease from previous years.

5% of respondents believe that ASEAN markets will be less important in the next two years, the first increase since 2008.

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Table 2.2.3 Reasons why ASEAN markets will be more important in worldwide operations and revenues in the next two years

2009 2010 2011 2012

Economic Recovery 89% 88% 76% 0%

Improvement in Infrastructure 53% 44% 48% 0%

Increased Availability of Trained Personnel 38% 24% 24% 4%

Favorable Government Policies 13% 24% 24% 4%

Limited Growth Opportunities in Other Regions 49% 59% 52% 22%

Stable Political Conditions 11% 12% 24% 9%

Change in Business Strategy 30% 24% 27% 44%

Other 2% 12% 21% 17% *In 2012, respondents were still allowed to choose three reasons, but data was tabulated to add up to 100%.

Changes in business strategy replaced economic recovery as the top reason for believing that ASEAN markets will be more important in the next two years. Respondents cited limited growth opportunities in other regions as the second most important reason for the ASEAN market’s growing importance.

No respondents cited economic recovery and improvements in infrastructure, which were top reasons in previous years.

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2.3 Trade and Investment in ASEAN Figure 2.3.1 Outlook on ASEAN as an investment opportunity

Figure 2.3.2 Trade and investment in ASEAN over the past two years

The majority of respondents have a positive or very positive outlook on the ASEAN region as an investment opportunity (96%).

Over the past two years, 73% of respondents indicated that their company has increased or significantly increased their level of trade and investment in the ASEAN region.

Neutral, 3%

Positive, 38%

Very Positive, 58%

Thinking about the ASEAN region, what is your outlook for the entire region as an investment opportunity for your company?

Increased Significantly, 33%

Increased, 40%

Remained the Same, 25%

Decreased, 3%

Level of trade and investment in the ASEAN region over the past two years:

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Figure 2.3.3 Trade and investment in ASEAN over the next 5 years

Table 2.3.1 Trade and investment percentage growth over next 5 years

By about what percentage do you believe trade and investment will grow in the ASEAN region over the next 5 years?

Percentage Growth 0-10% 11-20% 21-40% 41-100% Average

Percentage Respondents 31% 33% 15% 21% 26%

TOP THREE REASONS WHY YOUR COMPANY’S TRADE AND INVESTMENT WILL INCREASE IN THE ASEAN REGION:

Increasing Market Share (28%)

Availability of Trained Personnel/Efficient Manpower (21%)

Stable Government and Political System (18%)

The majority of respondents expect trade and investment in the ASEAN region to increase or increase significantly over the next 5 years (89%).

33% of respondents predicted the growth of trade and investment in ASEAN to be about 11-20% over the next 5 years. The average expected growth is 26%.

Respondents indicated that the top reason for their company increasing trade and investment in ASEAN is increasing market share (28%), followed by “availability of trained personnel/efficient manpower” (21%).

Increase Significantly,

28%

Increase, 61%

Remain the Same, 10%

Do you expect your company's activity to increase or decrease in the ASEAN region over the next 5 years?

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2.4 Business Direction and Movement in ASEAN Table 2.4.1 Expansion in the Philippines

2012

In The Philippines, does your company plan to expand or contract?

Expand Significantly 25%

Expand 58%

Remain the Same 18%

Contract 0%

Contract Significantly 0% Table 2.4.2 Reasons for expansion in The Philippines

Reasons why companies plan for business expansion in The Philippines

Economic Recovery 5%

Reasonable Production Costs 5%

Availability of Trained Personnel/Efficient Manpower 40%

Increasing Market Share 35%

Diversification of Customer Base 10%

Lack of Growth in Current Market/Countries 5%

The majority (83%) of respondents indicated that their companies plan to expand in the Philippines. None of the respondents expect to contract.

The top three reasons for expansion in the Philippines are availability of trained personnel/efficient manpower, increasing market share, and diversification of customer base. Data from past years can be found in Appendix C, Table C-1.

Table 2.4.3 Location of ASEAN Expansion

2009 2010 2011 2012

Into which specific ASEAN country or countries does your company plan to expand?

Brunei 0% 0% 0% 0%

Cambodia 0% 4% 4% 0%

Indonesia 8% 25% 21% 3%

Laos 3% 0% 0% 0%

Malaysia 8% 11% 7% 0%

Myanmar 0% 0% 0% 5%

Philippines 49% 43% 32% 49%

Singapore 3% 0% 11% 14%

Thailand 0% 7% 7% 11%

Vietnam 31% 11% 18% 19%

The Philippines continues to be the most popular country for expansion, increasing from 32% in 2011 to 49% in 2012.

Indonesia fell from its spot as the second most commonly cited country for ASEAN expansion (from 21% in 2011 to only 3% in 2012).

19% chose Vietnam as a country for ASEAN expansion, a slight increase from 18% in 2011.

Myanmar grew from 0% in 2011 to 5% in 2012.

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Table 2.4.4 Diversification from China into ASEAN 2011 2012

Does your company plan to diversify some investments or business from China into ASEAN over the next two years?

Yes 11% 8%

No 59% 65%

Not Sure 30% 28%

Only 8% of respondents stated that their companies plan to diversify some investments or business from China into ASEAN over the next two years, a decrease from 11% in 2011.

2.5 ASEAN Integration Table 2.5.1 Importance of ASEAN Integration

2009 2010 2011 2012

Is ASEAN integration important to helping your company do business in the region? Yes 66% 67% 62% 50%

No 34% 33% 38% 30%

Not Sure “Not Sure” offered for the first time in 2012 20%

ASEAN integration continues to be important in 2012, with half of the respondents reporting that it is important to helping their companies do business in the region.

Table 2.5.2 ASEAN Regional Strategies

ASEAN is seeking to develop the region as a single market and production base. Does your company have an ASEAN regional strategy based on these goals?

Yes 8%

No 70%

Not Sure 23%

Almost all of respondents in the Philippines (93%) either do not have an ASEAN regional strategy based on these goals or are not sure if they have a strategy based on these goals.

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2.6 ASEAN FTA’s

Figure 2.6.1 Utilizing FTA’s

Figure 2.6.2 Importance of FTA’s

The ASEAN Free Trade Agreement with China can be utilized by the largest percentage of respondents

in the Philippines (38%). The ASEAN FTA with Korea can be utilized by the smallest percentage of

respondents in the Philippines (20%).

The Free Trade Agreement with China is the most important to those who can utilize it. 82% of

respondents consider it important or extremely important.

25% 25% 28% 30% 30%

33% 38% 28%35%

20%

0%

10%

20%

30%

40%

50%

60%

70%

Australia and New Zealand

China India Japan Korea

Can your company utilize the provisions of the agreement to export goods or services from ASEAN to each specified country, import from those countries into ASEAN, or expand investment from ASEAN into each

specified country?

Yes

No

14% 20%40%

18%

14%25%

33%

55% 43% 50%80%

33% 27% 29% 25%

0%

20%

40%

60%

80%

100%

120%

Australia and New Zealand

China India Japan Korea

How important is the agreement with each specified country to your company’s investment plans in ASEAN?

Unimportant Neutral Important Extremely Important

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2.7 Profit Outlook

Compared to 2011, do you expect your profits in ASEAN in 2012 and 2013 to increase, decrease, or remain the same?

Figure 2.7 ASEAN profit outlook

Year of Survey 2006 2007 2008 2009 2010 2011 2012

Profit Expectation

Current Year

Increase 64% 75% 57% 42% 72% 61% 73%

Remain 22% 20% 28% 36% 26% 28% 23%

Decrease 13% 5% 15% 21% 0% 7% 3%

Coming Year

Increase 74% 87% 75% 59% 76% 70% 88%

Remain 17% 10% 18% 30% 20% 26% 8%

Decrease 9% 3% 7% 10% 2% 0% 3%

Profit outlook are increasingly positive, with the majority of respondents (73%) expecting profits to increase in the current year, up from 2011’s figure of 61%. 88% expect profits to increase in the coming year, up from 70% in 2011.

2.8 Workforce Expansion Table 2.8.1 Workforce Expansion in 2012

Do you expect your company’s total number of employees to increase, decrease, or remain the same in 2012?

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Increase 33% 26% 48% 48% 56% 63% 57% 33% 73% 67% 75%

Same 55% 58% 40% 41% 35% 34% 39% 48% 24% 25% 20%

Decrease 12% 16% 12% 11% 2% 3% 4% 19% 3% 7% 5% Table 2.8.2 Percentage of Employee Increase

By what percentage will the number of employees increase?

Year of Survey 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Workplace Expansion

0 to less than 5%

31% 38% 36% 28% 30% 38% 54% 39%

6% 7%

5 to less than 10%

41% 20%

10 to less than 15%

31% 43% 29% 40% 36% 27% 25% 35%

26% 23%

15 to less than 20% 21% 7%

20 to less than 50% 23% 10% 18% 16% 15% 24% 29% 15% 6% 30%

>50% 15% 10% 18% 12% 21% 10% 4% 12% 0% 13%

For the first time in 2011, 0-10% was further separated into 0-5% and 5-10%. 10-20% was separated into 10-15% and 15-20%.

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Most respondents (75%) expect the number of employees to grow, an increase from 67% in 2011. Out of these respondents, 43% expect an increase of 5% to 15%, and 30% expect an increase of 20% to 50%.

Among the respondents who expect the number of employees to decrease (5%), 50% expect a decrease of 20% to 50% and the other 50% expect a decrease of 50% to 70%.

2.9 Expatriate Satisfaction Table 2.9 Expatriate Satisfaction

Year of Survey 2009 2010 2011 2012

Does your company regularly receive requests from employees based in other locations to work in the Philippines?

Yes 24% 15% 21% 40%

No 76% 85% 79% 60%

Are your expatriate employees generally satisfied with their assignments in the Philippines?

Yes 85% 86% 93% 100%

No 15% 14% 7% 0%

Do your expatriate employees attempt to extend their time in the Philippines?

Yes 66% 70% 77% 79%

No 34% 30% 23% 21%

Overall expatriate employee satisfaction remains very high at 100%, an increase from 93% satisfaction in 2011.

The majority of respondents (60%) stated that their companies do not regularly receive requests from employees in other locations to work in the Philippines.

79% of respondents stated that expatriate employees attempt to extend their time in the Philippines, a slight increase from 77% in 2011.

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3. FACTORS IMPACTING BUSINESS IN THE PHILIPPINES Respondents were asked to rate their satisfaction with a series of local factors that could affect their business. The percentage of respondents who are satisfied or extremely satisfied with a given factor can be used to identify factors of strength. Conversely, the percentage of respondents dissatisfied or extremely dissatisfied with a particular factor can be used to identify areas held as concerns.

3.1 Local Business Environment Factors

Major Strengths (Responded “Satisfied” or “Extremely Satisfied” at a significant rate in the 2012 survey)

Table 3.1.1: Time Comparison of satisfaction with major strengths

Factors 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Availability of trained personnel 74% 73% 63% 67% 57% 62% 77% 70% 66% 78%

Sentiment towards the U.S. 69% 62% 73% 70% 76% 83%

Office lease costs 59% 60% 57% 63% 56% 60%

Availability of low cost labor 65% 71% 62% 67% 76% 62% 73%

Personal security 58%

Stable government and political system

53%

See Appendix B, Table B -1 for responses on all listed factors). *Empty boxes indicate areas that were not strengths for the year indicated. Responses bolded represent that year’s response with the highest rate of satisfaction.

Satisfaction with international sentiment towards the U.S. is at its highest point (83%) since this survey began, and it is also the factor with the highest 2012 satisfaction rate for the Philippines.

Satisfaction increased for all of the top strengths. The availability of trained personnel increased from 66% to 78%, sentiment towards the U.S. increased from 76% to 83%, office lease costs increased from 56% to 60%, and the availability of low cost labor increased from 62% to 73%.

Major Concerns (Responded “Dissatisfied” or “Extremely Dissatisfied” at a considerable rate)

Table 3.1.2: Time Comparison of dissatisfaction with major concerns

Factors 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Corruption 91% 91% 88% 77% 72% 84% 88% 84% 79% 73%

Infrastructure 69% 69% 68% 50% 55% 54% 49% 46% 51% 40%

Laws and regulations 47% 48% 62% 43%

Ease of moving products through customs

43%

(See Appendix B, Table B-1 for responses on all listed factors). *Empty boxes indicate areas that are not concerns for the year indicated. Responses bolded represent that year’s response with the highest rate of dissatisfaction.

Respondents in the Philippines do not consider tax structure and local protectionism to be major concerns

in 2012.

Laws and regulations became less of a concern for respondents in 2012, with only a 43% rate of dissatisfaction.

Dissatisfaction with infrastructure decreased, with less than a majority of respondents (40%) selecting dissatisfied or extremely dissatisfied, compared with 51% in 2011.

Dissatisfaction with “corruption” decreased slightly from 79% in 2011 to 73% this year, though it remains the leading concern.

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3.2 Other Local Business Environment Factors

Government Institutions

With regards to local government institutions, respondents are most satisfied with the Central Bank (48%) and the Ministry of Finance (46%).

The institutions with the highest dissatisfaction rates are customs (51%) and taxation/revenue (37%). See appendix Table A-2 for more details.

Importing Goods Table 3.2 Importing Goods into the Philippines

Is importing goods into the Philippines a significant problem for your company?

Yes 31%

No 69%

3.3 International Schools

Table 3.3: International schools

2009 2010 2011 2012

Will the ability to find adequate space at international educational institutions in the Philippines be a significant problem in the next 1-3 years?

Yes 17% 48% 42% 20%

No 84% 52% 58% 65%

Do you feel that the government of the Philippines is actively pursuing solutions to correct the space constraint at international educational institutions?

Yes 8% 10% 25% 0%

No 92% 90% 75% 56%

Will the lack of adequate space at international educational institutions in the Philippines affect your company’s decision to hire more local employees over foreign employees?

Yes 58% 40% 25% 11%

No 42% 60% 75% 56% *The option “Not Sure” was available for the first time in 2012.

The option “not sure” was offered for the first time in 2012. However, a majority of respondents still answered either “yes” or “no” for each question.

The majority of respondents (65%) do not believe that the ability to find adequate space at international educational institutions in the Philippines will be a significant problem in the next 1-3 years.

Most respondents (56%) do not feel that the government in the Philippines is actively pursuing solutions to correct the space constraint at international educational institutions. No respondents answered “yes” for this question.

The majority of respondents (56%) do not believe that the lack of adequate space at international educational institutions in the Philippines will affect their company’s decision to hire more local employees over foreign employees.

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4. CONCLUSION

Positive Outlook With 92% of respondents satisfied in 2012, outlook on the ASEAN region as an investment opportunity continues to stay extremely positive. 89% of respondents intend to expand their business coming years, and the primary reasons for this are increasing market share, availability of trained personnel, and a stable political system. Profit outlook for both 2012 and 2013 is largely positive. 73% expect an increase in 2012 and 88% do in 2013. These positive profit numbers reflect well on plans for workforce expansion as 75% of respondents planned on hiring new workers. ASEAN The ASEAN region continues to grow in importance because of the availability of change in business strategy and lack of opportunities for expansion elsewhere. Regional free trade agreements continue to be important to businesses in the Philippines and the China agreement, used by 38% of respondents, is the most popular. Respondents are looking to expand within ASEAN due to the availability of trained personnel, efficient manpower, and increased market share. 83% of respondents expect to expand in the coming two years with nearly half of them planning to focus on the Philippines. Location Specific The business climate improved in 2012 for the Philippines with roughly a fifth of respondents facing significant financing constraints and higher costs of borrowing, down from a quarter in 2011. Currently respondents experience a high level of satisfaction in the areas of labor cost, availability of trained personnel, and sentiment towards the United States. Housing and office costs, though rising, are also a source of satisfaction. Corruption was by far the greatest drawback for the Philippines leaving three quarters of the respondents dissatisfied, of which roughly half were extremely dissatisfied. The quality of infrastructure varies by region and also got mixed reviews. Although employees do not tend to request to work in the Philippines, that percentage is rising and expatriate employee satisfaction in the Philippines is at an all time high in 2012. This may partially be attributed to the fact that space constraints in international schools for expatriate workers have become less of an issue in recent years. 79% of employees ask to extend their time in the Philippines.

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APPENDICES APPENDIX A: Sample Profile

Table A-1: Workforce and Turnover

Survey Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Scope of Responsibility

Only one country 38% 37% 43% 55% 42% 42% 52% 51% 66% 63% Multiple countries 62% 63% 57% 45% 58% 58% 48% 49% 34% 38%

Size of Current Workforce in Region

Below 50 employees 38% 43% 36% 38% 38% 32% 28% 26% 19% 25% 50 to <500 employees 43% 39% 33% 42% 39% 40% 46% 52% 53% 45% 500 to <1000 employees 7% 9% 18% 13% 10% 16% 13% 8% 9% 13% 1000 to <1500 employees 5% 4% 7% 6% 3% 6% 2% 0% 2% 5% 1500 to <2000 employees 5% 2% 2% 0% 3% 2% 2% 2% 0% 3% 2000 employees or above 2% 4% 5% 2% 7% 3% 7% 12% 17% 10%

Company’s Past Year Turnover in the Philippines (USD)

Below $1 million 14% 24% 11% 15% 12% 12% 6% 8% 9% 10% $1 to <$50 million 62% 55% 60% 53% 53% 60% 49% 52% 50% 68% $50 to <$100 million 12% 10% 11% 11% 24% 10% 17% 17% 11% 5% $100 to <$500 million 9% 8% 16% 13% 9% 15% 10% 15% 14% 10% $500 to <$1 billion 2% 2% 4% 2% 3% 2% 7% 4% 7% 0% $1 billion or above 2% 2% 0% 2% 0% 2% 0% 2% 5% 0%

Past Year’s Turnover As Percentage of Company’s Global Turnover

Below 5% 67% 72% 51% 63% 62% 5 to <25% 22% 15% 28% 21% 13% 25 to <50% 3% 3% 9% 7% 10% 50 to <75% 7% 0% 4% 0% 3% 75 to <100% 5% 2% 2% 5% 100% 5% 6% 7% 8%

Table A-2:ASEAN Turnover

2009 2010 2011 2012

Past Year’s Turnover as Percentage of Company’s Total ASEAN Turnover

Below 5% 22% 17% 26% 31%

5 to less than 25% 53% 46% 42% 39%

25 to less than 50% 7% 15% 9% 10%

50 to less than 75% 2% 4% 2% 3%

75 to less than 100% 7% 4% 7% 5%

100% 10% 13% 14% 13%

ASEAN Country That Holds the Next Largest Turnover for Company

Vietnam 3% 0% 3% 0%

Cambodia 0% 0% 0% 0%

Indonesia 12% 10% 8% 10%

Laos 0% 0%

Malaysia 9% 12% 8% 8%

Thailand 24% 29% 36% 13%

Philippines 22% 27% 19% 21%

Singapore 29% 22% 25% 28%

Brunei 0%

Myanmar 0%

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Table A-3: Primary Responsibility

Primary Activity 2009 2010 2011 2012

Services Accounting 0% 0% 0% 3%

Architecture and Engineering Services 4% 0% 2% 13%

Banking 4% 2% 2% 0%

Consulting 3% 4% 2% 0%

Education 1% 0% 0% 3%

Healthcare 0% 2% 4% 0%

HR Services 4% 2% 2% 3%

Insurance Brokers 3% 2% 0% 3%

Legal 0% 0% 0% 0%

Marketing & Communications Services 1% 0% 6% 3%

Other Financial Services 6% 2% 0% 3%

Software, IT, Telecommunications Services 7% 6% 8% 5%

Transportation & Logistics 3% 2% 4% 5%

Wholesale & Retail 4% 4% 4% 5%

Business Process Outsourcing/ Shares Services

10% 6% 23%

Other 3% 4% 4% 3%

Total Services 43% 40% 44% 72%

Manufacturing Consumer Goods 9% 10% 15% 3%

Electronics 0% 4% 4% 0%

Food & Food Products 3% 6% 4% 3%

Oil & Petrochemical 1% 4% 4% 0%

Pharmaceuticals/Medical 1% 4% 0% 3%

Machinery & Equipment 0% 0% 0% 0%

Other 12% 6% 15% 3%

Total Manufacturing 26% 34% 42% 12%

Other 28% 27% 12% 23%

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APPENDIX B: Local Factors Impacting Business

Table B-1: Satisfaction with factors

Total Satisfied

Extremely Satisfied

Satisfied Neutral Dissatisfied Extremely

Dissatisfied Total

Dissatisfied Infrastructure 40% 0% 40% 20% 28% 13% 40%

Availability of raw materials

40% 3% 38% 13% 13% 3% 15%

Availability of low cost labor

73% 25% 48% 18% 5% 0% 5%

Availability of trained personnel

78% 28% 50% 10% 13% 0% 13%

Office lease costs 60% 8% 53% 15% 18% 5% 23%

Housing costs 48% 5% 43% 18% 25% 3% 28%

Laws & regulations 33% 3% 30% 23% 35% 8% 43%

Corruption 10% 3% 8% 15% 43% 30% 73%

Local protectionism 23% 0% 23% 43% 18% 8% 25%

Tax structure 38% 10% 28% 30% 18% 10% 28%

Personal security 58% 5% 53% 20% 15% 5% 20%

Stable government and political system

53% 3% 50% 25% 20% 3% 23%

New business incentives by government

45% 8% 38% 25% 15% 10% 25%

Sentiment towards the U.S.

83% 30% 53% 10% 5% 3% 8%

Free movement of goods within the region

30% 3% 28% 23% 28% 0% 28%

Ease of moving products through customs

23% 8% 15% 23% 28% 15% 43%

Table B-2: Satisfaction with local government institutions

Total Satisfied

Extremely Satisfied

Satisfied Neutral Dissatisfied Extremely

Dissatisfied Total

Dissatisfied

Agency to promote/develop investment

50% 20% 30% 25% 10% 0% 10%

Customs 23% 3% 20% 25% 33% 15% 48%

Immigration 48% 3% 45% 23% 18% 8% 25%

Taxation/Revenue 30% 3% 28% 28% 23% 18% 40%

Central Bank 39% 5% 33% 36% 5% 0% 5%

Ministry of Finance 28% 0% 28% 40% 8% 3% 10% Percentages may not add to 100 because “Not Applicable” and “Don’t Know” were possible responses.

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APPENDIX C: Expansion in ASEAN over the Next Two Years

Table C-1: Top 3 Reasons for ASEAN Expansion

Year of Survey 2007 2008 2009 2010 2011 2012

Reasons for Expansion

Economic recovery 61% 52% 38% 53% 41% 5%

Potential for business growth 61% 52% 84% 84% 85% 0%

Increasing market share 57% 75% 49% 53% 49% 35%

Reasonable production cost 39% 39% 27% 26% 20% 5%

Diversity of customer base 34% 41% 18% 21% 27% 10%

Lack of growth in current market/countries 9% 7% 7% 5% 10% 5%

Availability of trained personnel/efficient manpower 48% 39% 40% 26% 20% 40%

Availability of raw materials 3% 10% 0%

High level of personal security 0% 0% 0%

Low level of corruption 0% 2% 0%

Adequate laws and regulations to protect business 3% 0% 0%

Adequate laws and regulations to encourage foreign investment

5% 7% 0%

Stable government and political system 8% 10% 0%

Low level of local protectionism 0% 2% 0%

Weak competition in market/countries 0% 5% 0%

Other 5% 5% 0% Empty boxes indicate that no comparative data is available for those years.

Table C-2: Top Reasons for ASEAN Importance over Next Two Years

Year of Survey 2007 2008 2009 2010 2011 2012

Reason

Economic recovery 80% 49% 89% 88% 76% 0%

Limited growth opportunities in other regions 33% 53% 49% 59% 52% 22%

Improvement in Infrastructure 48% 60% 53% 44% 48% 0%

Increased availability of trained personnel 38% 42% 38% 24% 24% 4%

Favorable government policies 10% 23% 13% 24% 24% 4%

Stable political conditions 13% 14% 11% 12% 24% 9%

Change in business strategy 23% 30% 24% 27% 44%

Other 21% 17

Empty boxes indicate that no comparative data is available for those years. In 2012, data was tabulated to add up to 100%.