Doing Business in Philippines
With a multicultural and ethnically diverse population, the Philippines offers a vibrant and dynamic business environment.
Expats doing business in the Philippines will be operating in one of the largest markets in Southeast Asia; the country enjoys positive economic growth and has a highly skilled and educated work force. Its strategic location has made the Philippines a potential gateway for investors into the wider Asian region, and many multinational companies have offices there. Makati City, which forms part of Metro Manila, is the financial and business centre of the Philippines, and where most local and international organisations have their Filipino headquarters. The city also hosts numerous international embassies and therefore forms the diplomatic centre of the Philippines.
The main industries in the Philippines are electronic components and machinery, food and drink, clothing, footwear, tobacco, petroleum products, metals and minerals. Business outsourcing services, such as call centres, are also a booming sector.
Expats will find that the Philippines is not always an easy place to do business, as reflected in the country’s ranking in the World Bank’s Ease of Doing Business survey for 2075, where it came 99th out of 190 countries surveyed. Areas in which the country scored particularly poorly included starting a business (171), and protecting investors (137).
Business culture in the Philippines
The Filipino business culture is a mix of East and West. Although geographically part of Southeast Asia, the country has strong European and American ties that extend into everyday social interactions and its business culture. Filipino and English are the two main languages of business in the country, and although many business practices may be Westernised, Eastern traditions and cultural norms still play a central role.
Family is important in Filipino culture and many businesses are family owned, with a number of family members often working for the same company. Business relationships therefore equate to personal relationships and it’s important to network and build close interpersonal relationships with Filipino counterparts. Business structures in the Philippines are hierarchical and decisions are made mostly by the top-level executives. However, the group’s input is very important and it’s possible that initial negotiations and agreements may be concluded without even meeting the actual decision makers.
Filipinos are known for their friendliness and hospitality. This extends to the business environment. Filipinos place great emphasis on polite language and gentle conversation. When speaking, one’s tone should remain neutral and direct questions should be avoided. Business is best dealt with face to face. Only once polite conversation has been concluded should one negotiate business. Filipinos enjoy conversation about their friends and family, but topics such as politics, religion and corruption are best avoided.
Business communications can often be indirect, and expats should be aware of this to avoid miscommunication. A “yes” may not necessarily mean an agreement has been made. Moreover, physical gestures and their meanings are important. Filipinos often use their eyes, lips and hands to convey a wide range of messages. Raised eyebrows and a smile indicate a silent “hello” or a “yes” in answer to a question. Fixed eye contact between men is considered aggressive. The proper method to summon somebody is with a downward wave.
To Filipinos, the concept of saving face and maintaining self-esteem is important. Self-esteem should be preserved, and one should never criticise or argue with a Filipino associate publically. Public displays of anger, trying to prove someone wrong in front of others, or disrespect of one’s rank or position can cause loss of face. When in an embarrassing situation, the Filipino may generally laugh or try to change the subject to hide the awkwardness.
Expats should not be surprised if Filipino colleagues or friends ask very personal questions about their age, salary or how much something cost them to buy, or make frank comments regarding weight and appearance. Such questions come from curiosity and the comments are generally meant in a light-hearted manner.
Doing business in the Philippines: Fast facts
Business dress: Business dress in the Philippines is formal. Men usually wear suits or formal office apparel. Some men wear the traditional barong tagalog, a lightweight, long-sleeved shirt worn without a tie. Light suits and dresses are acceptable for women. Filipinos usually dress for the weather. Since it is a tropical country, light and loose clothing materials are advised during the hot summer.
Hours of business: Business hours are usually from 8am to 5pm, with a one-hour lunch break. Offices are generally closed on weekends, which fall on a Saturday and Sunday.
Language of business: Filipino and English are the two languages of business in the Philippines. Spanish is also spoken by many Filipinos, along with Arabic and Chinese.
Greeting: A handshake and a smile are the usual form of greeting. One should always greet the eldest or most senior person first.
Gifts: Gift giving is widely practised in Filipino business culture and is especially popular once a contract has been signed. Gifts should not be overly extravagant; popular gifts include flowers, sweets, perfume and spirits.
Gender equality: Women are treated equally in the Philippines and there are many successful women in Filipino business circles.
Dos and don’ts of business in the Philippines
Do treat Indonesian associates with respect and avoid offending anyone in public or during meetings.
Don’t be surprised if Filipino counterparts ask personal questions. These should be answered politely.
Do remember that Filipino business culture is personal, so personal relationships should be nurtured and respected.
Do consider giving a gift to a Filipino associates once a contract has been concluded. Gift giving is a popular practice in Filipino business culture.
Don’t make direct eye contact. It is considered rude to stare.
Don’t wag a finger at someone or curl a finger to summon someone, as these gestures are considered rude.