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 third largest economy in ASEAN and the 13th 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 third largest English-speaking country, providing  skilled labour to support the 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.

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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 48th in the world for financial market development in The Global Competitiveness Report 2015-2016.
  • It ranks the Philippines 47th 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 has 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 USD 1 million.


Sophistication of Banking Systems

  • The Philippines has 42 universal and commercial banks, of which three are government-owned and 24 are branches or subsidiaries of foreign banks.
  • The Philippines's foreign-exchange market has an average daily turnover of USD 3 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.


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 (CIT) rate is 30%.
  • Domestic companies are taxed on their worldwide income. Foreign companies are taxed on income derived in the Philippines. Profits remitted abroad by a branch office are taxed at 15%, although this rate is reduced under some tax treaties.
  • Standard VAT is 12%.
  • Withholding tax is charged to resident companies at 0% on dividends and 7.5% to 20% on interest. For non-resident companies rates are 15% or 30% on dividends and 30% on interest if no tax treaty is in place, while they range from 15% to 25% for dividends and 5% to 25% on interest where a treaty is in place.
  • Documentary stamp duty is payable on a number of transactions, including certain debt instruments. Rates range from PHP 0.5 per PHP 200 to PHP 20 per PHP 5,000.
  • Interest income is subject to a final tax of 7.5%, 10% or 20%. Deductions for interest expenses are reduced by 33% of the interest income that is subject to final tax.
  • Tax incentives are available for export enterprises, including exemption from CIT for four to six years if certain conditions are met.
  • Regional operating headquarters of multinational companies pay reduced CIT of 10% on their taxable income.
  • 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 South-east 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 CIT or VAT for companies that do not derive an income from the Philippines, while those that do may qualify for a preferential tax rate of 10%.
  • It 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 599 banks, of which 42 are universal and commercial banks, 59 are thrift banks and 498 are rural banks and co-operatives. In addition, there are nine representative offices of foreign banks and six branches of foreign banks.
  • The largest four banks 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, dominate, holding more than 90% of total assets.
  • The government has undergone the 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.
  • 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 of international transactions from within the ASEAN.
  • There are anti-money-laundering and counterterrorism-financing regulations in place.
  • Amounts over USD 10,000 brought in or out of the Philippines have 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.
  • Settles remittances by overseas nationals through PhilPaSS-REMIT.
  • 91 participants (18 participants in PhilPaSS-REMIT).
  • Processes high-value and urgent PHP interbank transactions.
  • Activates final settlement of participants' net balances originating from the EPCS.
  • 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 Manila is the settlement bank.
  • High-value USD interbank transfers are done through the RTGS system, operated by the PCD.
  • Low-value USD interbank transfers are done through the PDDTS' end-of-day 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.
  • 40 participants, including 39 commercial banks and one thrift bank.
  • 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.
  • 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.

National Retail Payment System (NRPS)

Electronic retail payment system

  • Operated by BSP.
  • Centralises ATM, mobile phone and POS networks.
  • Due to be launched in 2017.
  • Processes transactions in real time.


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 (autodebits)

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



  • Cheques are 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.


Card Payments

  • Increasing in popularity as form of cashless payment.
  • The main brands in circulation are Visa, MasterCard, BanKard, BPI Express Card, Unicard, Diners Club and American Express. All cards are Europay, MasterCard and Visa (EMV)-compliant.
  • ATM cards are linked to deposit accounts and are also used as debit cards.
  • The main ATM/POS networks are BancNet, MegaLink, Expressnet, Nationlink and Encash.
  • There are 18,557 ATMs and 151,985 POS terminals (2016). The BSP scheduled 1 January 2017 for all ATM and POS terminals to be EMV-compliant, however, there are still cards in circulation that have yet to be replaced. The old magnetic strip cards can still be used at ATM and POS terminals. 


Other payment schemes

  • Fifty-eight banks offer reloadable prepaid cards (electronic wallets).
  • Multipurpose e-cards are used to pay utility bills and withdraw cash.
  • The Beep card is utilised on public transport in Manila and is widely used.




Recent developments


Online Payment Gateway Planned

The Department of Finance is setting up an online payment gateway to enable people to make secure payments to the government. The PHPay system, which can be used to pay tax and other fees to government agencies, is part of a drive to cut red tape and improve the ease of doing business in the country. The Bureau of Customs also plans to use government digital platform to enable simple import and export procedures to be done online.

Read more about the development here


New Smartphone Remittance Service

Mynt, the FinTech arm of Globe Telecom, has partnered up with global remittance firm MoneyGram to enable Filipinos working abroad to send money to their families through their smartphone. The service will be available through its GCash mobile wallet and will enable overseas workers in more than 200 countries to send money from 350,000 MoneyGram agents. Their families will be able to access the money free of charge through the GCash app once they receive a reference number from the sender. The service will take as little as 10 minutes.

Read more about the development here


Government E-commerce Platform Launched

The Department of Trade and Industry and the Department of Science and Technology have joined forces to launch the Philippines first government e-commerce platform. The Platform,, aims to help micro, small and medium-sized enterprises expand their market reach online. It will be provided through Negosyo Centers, which also offer registry assistance, advisory services and business evaluation for small businesses.

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: IMF World Economic Outlook database, October 2016; CIA World Factbook; Trading Economics; PwC

Please note that the information contained in this document, assembled based on information available and accurate as at July 2017, is of a general nature only and is subject to change whether for economic, political, social or other reasons.


Last updated on 20 May 2018