About Philippines


The Philippines is one of the fastest growing economies in Southeast Asia and is projected to be the fastest growing economy in the region in the coming years. It is the fifth largest economy in ASEAN and the 16th largest economy in Asia.

Open regulation has allowed 100% foreign ownership in almost all sectors, with companies in the Special Economic Zone enjoying low tax rates. Low business costs and an abundance of resources in the Philippines have further attracted investors. Its credit ratings have been on a steady rise over the years.

The Philippines boasts one of the highest literacy rates in Asia and is the world's fourth largest English-speaking country, providing skilled labour to support increasing investment and entrepreneurial opportunities.

The country is one of the most aggressive adopters of renewable resources, with a significant budget allocated to wind energy and biomass.


Philippines Market Profile Infographic_small

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Corporate Treasury in the Philippines

The Philippines is one of the fastest-growing economies in South-east Asia. Here, we highlight some of the key benefits relevant to treasury and cash management.


Financial Market Development

  • The World Economic Forum ranks the Philippines 52nd in the world for financial market development in The Global Competitiveness Report 2017-2018.
  • It ranks the Philippines 35th in the world for the soundness of its banks, while it rates it relatively highly for ease of access to loans and financing through local equity markets.
  • The Philippines offers good business infrastructure, an educated, English-speaking, highly competent, cost-effective workforce and a sound legal environment.
  • The Philippines has foreign-exchange controls. Companies must seek approval from the central bank for purchases of foreign exchange above USD1 million.


Sophistication of Banking Systems

  • The Philippines has 43 universal and commercial banks, of which three are government-owned and 23 are branches or subsidiaries of foreign banks. A further 11 foreign banks have representative offices.
  • The Philippines's foreign-exchange market has an average daily turnover of USD3 billion (Bank for International Settlements triennial global survey 2016).
  • The Philippines' debt market mainly consists of short-term and long-term government bonds. The corporate bond market is small, although it is growing rapidly. Outstanding local currency bonds stood at PHP5.475 trillion at the end of 2017.


Regulatory Bodies

  • The banking industry is regulated by Bangko Sentral ng Pilipinas, the central bank of the Philippines. Regulations are in line with international standards. Bangko Sentral ng Pilipinas also regulates foreign-exchange controls.



  • The corporate income tax is 30%.
  • Resident companies are taxed on worldwide income. Foreign companies with permanent establishments in Philippines are generally taxed on income that is received or generated in Philippines.
  • A Philippines branch’s after-tax profits remitted or deemed remitted to its foreign head office are subject to an additional tax charged at 15% branch remittance tax (except for those activities registered with the Philippines Economic Zone Authority and other companies within special economic zones).
  • The standard rate for Value Added Tax (VAT) is charged at 12%, with certain transactions being zero-rated.
  • For non-resident companies, withholding tax rates are 15% or 30% on dividends and 20% on interest if no tax treaty is in place. Withholding tax ranges from 5% to 25% for dividends and 10% to 15% on interest where a treaty is in place and the non-resident company can provide the Certificate of Residence.
  • Documentary stamp duty is payable on a number of transactions, including certain debt instruments. Some of the instruments are subject to ad volarem whilst others are fixed in nature.
  • Interest income, depending on the source, is subject to a final tax of 10%, 15% or 20% and such interest income will not be included in the corporate income tax returns.
  • Allowable deductions for interest expenses are reduced by an amount equal to 33% of the interest income that is subject to final tax. There are no thin capitalisation rules in the Philippines.
  • Tax incentives are available for export companies and those located in special economic zones, including exemption from corporate income tax for specific periods of time if certain conditions are met.
  • Regional operating headquarters of multinational companies are subject to a reduced corporate income tax rate of 10% on their taxable income.
  • Regional or area headquarters of multinational companies that do not derive income from the Philippines and act as supervisory, communication and coordinating centres for their overseas-related companies are not subject to corporate income tax.
  • The Philippines has tax treaties with around 40 countries and territories.


Benefits for Shared Service Centres

  • The Philippines is located in the heart of the fast-growing Southeast Asia region.
  • The country's low-cost, highly skilled and competent English-speaking workforce makes it a popular base for Shared Services Centres.
  • There are tax concessions for multinational companies that have their regional operating headquarters and Shared Services Centres in the Philippines, including no corporate income tax or VAT for companies that do not derive any income from the Philippines, while those that do, may qualify for a preferential tax rate of 10%.
  • The Philippines is a member of the Asian Payment Network, a common payment settlement platform within Asia Pacific.
  • Cash concentration is permitted between resident and non-resident companies but is not widely practiced due to cross-border transfer limits.
  • Notional pooling is not permitted in the Philippines.




Banking System

  • The Philippines' banking system is divided into subcategories:

    • Universal and commercial banks, which are the largest group in terms of resources and services on offer;
    • Thrift banks, which offer services that accumulate savings and deposits, such as loans, mortgages, microfinancing, etc;
    • Rural banks and co-operatives, which offer services that support rural communities.
  • In addition, there are non-banks with quasi-banking functions, which raise funds through 20 or more lenders for large investments and other receivables.
  • There are 632 banks, of which 43 are universal and commercial banks, 57 are thrift banks and 532 are rural banks and co-operatives. In addition, there are 26 foreign banks, of which six are foreign bank branches under the category universal and commercial banks, 15 are foreign bank branches under commercial banks only and two are foreign bank subsidiaries..
  • The largest four banks dominate in terms of total assets: BDO Union Bank Inc., Metropolitan Bank and Trust Co., state-run Land Bank of the Philippines and Bank of the Philippine Islands.
  • The government has undergone a liberalisation of its banking industry, resulting in a drop in the number of banks through consolidation and mergers.


Bank Accounts

  • Residents: May hold foreign currency accounts domestically and overseas. However, they are not permitted to hold domestic currency accounts overseas, although they are freely convertible to foreign currency within the provisions of the foreign exchange controls.
  • Non-residents: May hold foreign and domestic currency accounts on condition that:
    • Domestic currency accounts are used for foreign currency remittances, domestic currency income and/or income from assets held in the Philippines;

    • In order for domestic currency accounts to be freely convertible to foreign currency, funds are from tourists or balikbayan (returning Filipino citizens) that satisfy foreign-currency control rules.

  • Interest: Available to current accounts and short-term deposit accounts.


Legal and Regulatory

  • Bangko Sentral ng Pilipinas (BSP) oversees the banking sector and administers foreign-exchange controls. Payment and settlement systems are supervised by BSP’s Core Information Technology Sub-Group of the Supervision and Examination Sector.
  • A company is resident if it is incorporated in the Philippines or licensed to carry out business there.
  • The Philippines is a member of the Association of Southeast Asian Nations (ASEAN) and is therefore subject to its financial multilateral arrangements.
  • The PHP is only permitted for use in international transactions within the ASEAN.
  • There are anti-money-laundering and counterterrorism-financing regulations in place.
  • Authorisation is required to bring in to the country or to take out PHP50,000 (in pesos) or more, in cash or electronically.
  • Foreign currency equivalent to USD10,000 and above brought in or out of the Philippines has to be declared to Customs.
  • A financial intelligence unit has been set up, the Anti-Money Laundering Council (AMLC), which is a member of the Egmont Group.




Payment Systems


(Philippine Payment and Settlement System)

Philippines' Real-Time Gross Settlement (RTGS) system

  • Operated by the BSP through its Payments and Settlements Office (PSO).
  • Settles remittances by overseas nationals through PhilPaSS-REMIT.
  • 189 participants
  • Processes high-value and urgent PHP interbank transactions.
  • Activates final settlement of participants' net balances originating from the EPCS (see below).
  • Settles transactions in real time and with immediate finality.
  • Final settlement takes place across the participant banks' correspondent accounts held at the BSP.


(Philippine Domestic-Dollar Transfer System)

Online RTGS system

  • Operated by the Philippine Central Depository (PCD) and the Philippine Clearing House Corporation (PCHC).
  • Citibank Philippines is the settlement bank.
  • High-value USD interbank transfers are done through the gross settlement real time (GSRT) system, operated by the PCD.
  • Low-value USD interbank transfers are done through the PDDTS' end-of-day (EOD) netting facility, operated by the PCHC.
  • PDDTS settles the USD part of the transaction and PhilPaSS settles the PHP part of the transaction for settlement through the BSP.
  • 46 participants.
  • Processes online domestic USD interbank transfers and third-party account-to-account USD transfers (no value threshold).
  • Interbank payments are processed and settled in real time.


(Electronic Peso Clearing and Settlement System)

Low-value interbank PHP transfer system

  • Operated by the PCHC.
  • 76 participants.
  • Interbank transactions are processed and settled with funds available next working day. Recipient bank may impose a fee.
  • Final settlement is done across participants' accounts held at the BSP through PhilPaSS.


(Electronic Check Clearing System)

Multilateral net settlement system

  • Operated by the PCHC.
  • System operates through 36 integrated clearing regions in the Greater Manila Area and 47 regional clearing units.
  • All financial institutions have to participate in the ECCS.
  • Processes cheque and paper-based payments next working day.
  • Processes MICR-encoded cheques electronically.
  • Cheques are physically exchanged at the same time as the electronic exchange of information.
  • Settlement is done across participants' accounts held at the BSP through PhilPaSS.


Automated cheque clearing system

  • Operated by PCHC.
  • 70 participants.
  • Processes truncated images of cheques or electronic payment information.
  • Settlement on next-day basis through PhilPaSS.
PESONet Electronic funds transfer credit payment system
  • Operated by BSP and launched in 2017.
  • 33 participants (BSP supervised financial institutions [BSFIs] ).
  • The first automated clearing house under the National Retail Payment System (NRPS) framework.
  • Processes credit transfers with participating institutions same day or upon clearing, 24/7.
InstaPay Real-time electronic fund transfer (EFT) system
  • Operated by BSP and launched in 2018 as part of the National Retail Payment System.
  • 20 participants.
  • Processes transactions of a maximum of PHP50,000 per day, with no limitation, in real time, 24/7.
  • No charge to recipient, but a cost may be incurred by sender.
  • Sender and recipient must have account with participating institutions


Payment Instruments


Credit Transfers

  • Available as paper-based or automated transfers, although automated transactions are not common.
  • High-value and urgent transfers are settled same day.
  • Low-value and non-urgent transfers are settled the next business day. They include payroll, supplier and third-party payments.


Direct Debits (auto debits)

  • Available for low-value, regular payments such as utility bills.
  • Settled and cleared in three business days.


Card Payments

  • Are increasing in popularity as form of cashless payment, although card payment facilities may be limited outside of the major cities and only a small proportion of the population are eligible for a credit or debit card.
  • The main card networks are Visa, MasterCard, Diners Club and American Express, which are serviced by a variety of card providers. All cards are Europay, MasterCard and Visa (EMV)-compliant.
  • ATM cards are linked to deposit accounts and are also used as debit cards. Popular reloadable prepaid cards, such as the EastWest Prepaid Card and YAZZ card, work like a Visa or Mastercard, and many can be linked to a customer’s PayPal account.
  • The main ATM/POS networks are BancNet, MegaLink, Expressnet, Nationlink and Encash.
  • The BSP has announced that all credit and debit cards should be EMV-compliant by June 2018. However, there are still cards in circulation that have yet to be replaced. The old magnetic strip cards can still be used at some ATM and POS terminals.
  • Multipurpose e-cards are used to pay utility bills and withdraw cash.
  • The widely-used Beep smart card is utilised on public transport and at toll booths and convenience stores in metro Manila.


Online Payments

  • The financial technology (fintech) sector is a growing area in the Philippines, with the value of fintech transactions estimated to grow at a rate of 19% annually over a four-year period.

  • The BSP has adopted a ‘regulatory sandbox’ approach to the development of the fintech industry to allow start-ups the opportunity to operate.

  • The BSP launched the National Retail Payment System (NRPS) in 2015 to provide the policy and regulatory framework to support the development of a national electronic payment network.

  • The digitisation of the payment system has been hindered by low smartphone, internet and bank account penetration and lack of technical and financial infrastructure. The NRPS programme aims to address these obstacles, setting a target to increase electronic payments from 1% to 20% of total payments by 2020.

  • In the growing e-commerce sector, PayPal is one of the leading payment gateway providers in the country, followed by AsiaPay and Dragonpay.

  • Digital and mobile wallets are also increasing in popularity as a more secure payment medium and transfer system compared with cash and cards. The two most popular mobile wallets are GCash and PayMaya, which both offer QR codes and integrated payment services through Facebook Messenger.


    Digital Currencies

    Cryptocurrency is accepted as legal tender in the Philippines but only if it is registered with the BSP. Bitcoin has been registered and is becoming popular, especially for transferring remittances from overseas.

  • The BSP has awarded licenses to bitcoin companies to operate within specific economic zones, although the exchange to virtual currency has to be done offshore.


Cash, Cheques and Money Orders

  • Cash is still the most common form of payment (comprising 96% of total payments in 2017, according to digital financial provider Ayannah).
  • Cheques are still the most common form of cashless payment for retail and commercial transactions.
  • MICR-encoded cheques are cleared through ECCS and final settlement is done through PhilPaSS. In Greater Manila, settlement is next day and outside of this area, is up to seven working days.
  • Money orders, for both domestic and international remittances, can be arranged through PHLPost as well as vendors like Western Union and MoneyGram.



Philippines Market Profile Infographic

1 (Progressive) max rate for incomes over PHP8 million


Recent developments


New Cryptocurrency Rules

New cryptocurrency regulations have been launched in the Philippines to increase protection for consumers. The Cagayan Economic Zone Authority (CEZA) has approved the Digital Asset Token Offering (DATO) regulations covering the acquisition of crypto assets. Under the rules, all DATOs must be accompanied by proper documents detailing the issuer, project and any accompanying advice or certification by experts. Tokens must also be listed on the licensed Offshore Virtual Currency Exchange. CEZA will act as the regulatory authority, with the Asia Blockchain and Crypto Association helping to enforce the rules.

Read more about the development here


DTI Calls for Official e-Commerce Data

The Department of Trade and Industry (DTI) does not have a clear picture on the progress of its five-year Philippine e-Commerce Roadmap 2016-2020 due to a lack of data. The main objective of the initiative is for online business activities to contribute 25% to GDP by 2020, up from 10% in 2015. But a lack of support from other government agencies and the absence of official industry data means the DTI does not have a full picture on its implementation. The department is calling for the government to develop its own official e-commerce measuring tool.

Read more about the development here


Fintechs Not Threatening Traditional Banks

Fintechs do not currently pose a threat to banks in the Philippines due to their focus on payments, rather than other financial services such as loans, but banks should seek opportunities in this area, according to Bangko Sentral ng Pilipinas Deputy Governor Chuchi G Fonacier. He said 44% of fintechs in the Philippines offered innovative solutions for the payment and settlement of transactions. Data from the central bank’s Core Information Technology Specialized Group also showed that 16 out of the country’s 60 fintech firms still had ties with banks or other supervised financial firms.

Read more about the development here



This Market Profile is brought to you by DBS. Get in touch with us for further insights on doing treasury in The Philippines and take advantage of our innovative solutions to empower your business. Click here to find out more.



Sources: The World Economic Forum The Global Competitiveness Report 2017-2018; IMF; Bank for International Settlements; US Department of Commerce; Bangko Sentral ng Pilipinas; Asian Development Bank; PwC

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only. The information is assembled based on information available and accurate as at Apr 2019.

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Last updated on 13 Apr 2019