business in the philippines essay

Doing business in the Philippines Report

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Introduction

There are some important issues that one needs to consider before embarking on a mission to do business in a given country. Such issues as social, economic, and political environment of a country would be worth of consideration by a prospective investor.

The current paper intends to explore the possibility of doing business in the Philippines. It will emphasize on the social, economic, and political situation in the Philippines.

In addition, the culture, language, customs and protocol of the Filipinos shall be addressed, as well as their business etiquette, business culture, negotiation techniques, and meeting protocols.

The Filipino culture is heavily influenced by forces outside the Asian region including Mexico, and the United States. The influence of Islam in the Philippines has been somewhat limited, unlike such other Asian countries as Indonesia and Malaysia (CIA-The World Factbook 2011).

Filipinos have embraced many western values under the auspices of the Roman Catholic Church that has a large following in the country. The Filipinos have a strong sense of dignity and personal pride.

Business Structures

Most companies in the Philippines are family controlled. Business structure is largely hierarchical with the owner-managers possessing a lot of power. However, western business practices are slowly being embraced (Communicaid 2009).

Having good contacts with the top management is crucial as they are responsible for making most decisions. When making initial business contacts with Filipino organizations, only the senior people in your organization should meet with senior representatives from the Filipino organizations as sending lower ranking officials would be considered an insult.

Management style

The Filipino culture is characterized by paternalistic management style due to the strongly hierarchical culture. On the other hand, it is important for managers to become acquainted with some of the strong Filipino attributes that underline personal relationships in the Philippines.

To start with, the Filipinos are wary of being embarrassed for their actions, or for failing to live up to society’s expectations (Communicaid 2009). To criticize an individual in public is frowned upon, as it amounts to an insult.

Filipinos are not very particular about time, and most business meetings start late. As such, western business representatives can get frustrated with the slow progress of meetings and negotiations. Small talk is common before the start of a business meeting and it is during this time that the relations-building process between the two parties is established (Barcelon 2011).

Filipinos are nonconfrontational because they strongly believe in getting along with others smoothly. They frown on any form of negative talk. Moreover, Filipinos rarely contradict other people openly.

Therefore, a meeting might appear to be moving smoothly even when there is no apparent progress. When establishing new business contacts, gifts are often welcome as they are a sign that negotiations have been concluded satisfactorily.

Filipinos strongly believe in team spirit. People make sacrifices for their fellow team-members and those who appear to criticize team-members are severely dealt with (Communicaid 2009).

It is important to treat every team member with respect and dignity because in case you insult one of the team members, the other team members could feel insulted as well.

Communication style

English is the business language in the Philippines and as such, communication is not a problem for most western business people. Because the Filipino communication style is heavily influenced by the country’s Asian roots, western business people are therefore advised to desist from using coded and diplomatic language as this could complicate communication (Nolan 1996).

Like most other Asian countries, Filipinos find it very hard to say ‘no’ as this could be interpreted as being unfriendly or confrontational. Overseas visitors should also be wary of the Filipino body language.

For example, the Filipino may smile as a way of hiding annoyance, embarrassment, or disagreement, and the western business people can take this as a sign of pleasure or agreement. Once an agreement has been reached, it is always advisable to wait for requests for information or a contract before proceeding.

Women in business

Although the Filipino culture acknowledges the role of women in business circles, they should not be seen to dominate their male counterparts. Gender bias in the Philippines is almost nonexistent.

Personal grooming is important in the Philippines, both at business and social gatherings. Filipinos have a tendency to judge somebody based on their appearance. During business meetings, it is always advisable for men to dress in a suit and tie, while women are expected to dress modestly (Taglaw 2007).

Formally evening wear is also acceptable at most of the good restaurants in manila, but one is always advised to check the dressing code well in advance

Many Filipino organizations are hierarchically structured.
The Filipinos strongly believe in saving face.
It is common for business meetings in the Philippines to start late.
Filipinos are nonconfrontational, but do not interpret their politeness as a sign of agreement.
Foreign business representatives need the assistance of local to help them wade through the bureaucracy hurdle.
Gifts are acceptable in business meetings as they signify agreement in negotiations.

Cultural, social, and economic climate

The Filipino culture is a blend of western and eastern cultures, with a strong influence by the Malay culture. Economically, the country’s nominal gross domestic product was estimated at $ 216.1 billion in 2011 (Barcelon 2011).

Poverty influences the country’s social climate. For example, nearly 30 % of the population lives below the poverty line.

Successful entertaining

Business entertainment is common in the Philippines. The arrangement for business lunches and dinners takes place over the phone and it is customary for the inviting party to pay (Torres 2006).

The informal atmosphere of business entertainment enables everybody to relax. Dress code differs widely, and tipping is also highly anticipated.

Facts and figures

The Philippines consists of more than 7,000 islands on the coastline of Southeast Asia. The Philippines has a population over100 million, most of who lie in the lower middle income category. In addition, the Philippines has a land area of approximately 298,171 sq km, and a life expectancy of 71.66 years (CIA-The World Factbook 2011).

Manila, the capital city, has a population of 11 million, and is also the largest city in the country. Other large cities in the Philippines include Cebu City, Davao, and Zamboanga. The country’s monetary unit is the Peso.

Doing business in the Philippines calls for an understanding of the social, economic and political climate in the country. The Filipino culture is characterized by paternalistic management with a strong hierarchical culture.

Many of the leading companies in the Philippines are family controlled. Business meetings start late, and the Filipinos strongly believe in team spirit. English is the business language in the Philippines, while gender bias in the Philippines is also almost nonexistent.

Reference List

Barcelon E. 2011, Doing business in the Philippines . Web.

CIA-The World Factbook 2011, Philippines. Web.

Communicaid 2009 , Doing Business in the Philippines | Philippine Social and Business Culture: A Philippine Overview. Web.

Nolan J. 1996, Philippines business: the portable encyclopedia for doing business with the Philippines , World Trade Press, California, USA.

Taglaw 2007, Doing business in the Philippines. Web.

Torres Q. 2006, Doing business in the Philippines. Web.

Immigrants Philippines: Why They Migrate to the United States?
"The Hispanization of the Philippines" by J. Phelan
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The role small businesses will play in the Philippines’ economic recovery

MANILA, Philippines — Big businesses may control the stock market, but it is the start-ups and small businesses, or what economists tout as important influencers for growth, that keep the economy moving. For one, small businesses pose competition to previously stale with their innovative concepts and products. And because they operate locally, they create job opportunities with preference for local individuals, driving new job growth in a local town or city. Small businesses also have more flexibility and can be started by almost anyone with grit and a cutting-edge idea, making them more sundry in form, function, culture, and potential.

The global health crisis has greatly impacted the economy, apparent in the tourism, airline, hospitality, and even in the retail industry’s operation slowdown. Supply chains trade have been disrupted and as some businesses came to a halt, over three million Filipino employees lost their jobs due to the relentless plague of the pandemic crisis, according to the Department of Labor and Employment.

The numbers have it

The Philippine Statistics Authority (PSA) reported that Gross Domestic Product (GDP) has contracted in the Philippines during the fourth quarter of 2020, yielding a -9.5% contraction across the entire year. This is a vast change from last year’s growth, which saw four successive quarters of 5% growth and above.

2020’s GDP plunge in the Philippines is the largest on record since 1946, even topping the mid-1980s crash. Economic Planning Secretary Karl Chua states, “without a doubt, the pandemic and its adverse economic impact are testing the economy.” Yet, Chua likewise claims the nation is already seeing early signs of recovery with the easing of health restrictions and social protocols.

With the new year, the government is eyeing an economic rebound as stocks are seeing growth again in Manila, suggesting that larger companies may be experiencing a better recovery than small companies because of their easy access to credit and capital. Given that small and medium-sized enterprises (SMEs) account for 99% of registered businesses in the Philippines , along with providing 60% of the nation’s jobs, most workers and business owners are heavily affected by the current economic turbulence caused by lockdown measures.

Will Covid stand in the way of growth in 2021?

Despite being one of the fastest-growing economies in the world, the Philippines is still struggling to recuperate from recession. Some analysts believe the first quarter of 2021 will see continuous GDP contraction and a slow rise from the slump. With the recent arrival of the Covid-19 vaccines in the country and once lockdown measures are further loosened up for increase economic activity, everything will be looking up.

It may be a struggle to convince the public to take advantage of the government’s vaccination program following the Dengvaxia debate in November 2017, when the Department of Health suspended the school-based vaccination program after the controversy that at least 600 people, mostly children, died after obtaining a single dose of the Dengue vaccine, although not necessarily caused by the vaccine itself. Soon after, the Philippines have fallen to 70th place in countries’ confidence levels in vaccines. In fact, a poll conducted by Pulse Asia saw less than one third of the population are willing recipients of the Covid-19 vaccine.

But whether we believe it or not, the economy will expect a lot of promise only after a more comprehensive vaccination program is put in place as the government aims to vaccinate 70% of the Filipino population by the end of 2021, providing for ample herd immunity to reverse the risks for the remaining 30% who may refuse to be vaccinated. With a minimum faith and slow roll-out of the vaccines, President Rodrigo Duterte has expressed intent on spending almost 4.67 trillion pesos this year in order to drive growth, which would be over 400 billion more than in 2020. The World Bank has forecasted a 5.9% GDP growth rate in 2021 for the Philippines, which would be below 2019 levels.

The role of quick financing

Covid-19 has been reported to strongly affect 68% of SMEs in the Philippines, with only 13.4% slightly affected or not affected at all, while larger firms are more able to adapt to lockdown laws. Bigger supermarkets and groceries, for instance, remained open (it being an essential both for the population and economy) while traders operating in a smaller scale have either temporarily closed or filed for bankruptcy. Furthermore, bigger firms with significant cash reserves and those with strong credit ratings were more able to adapt business models that enabled them to sustain their business despite the limitations and changing restrictions. This is a contributing factor to the contraction of the Philippine economy, which relies on the activity of sole proprietors.

Another factor in the contracting Philippine economy is the limited credit supply. Carmen Reinhart, World Bank’s Vice President, has warned that a credit crunch is looming in the horizon. It is inevitable that when credit is in short supply from banks, businesses turn to alternative loan sources. One successful and popular method in the US, Europe, and Australia is quick-financing business loans .

Quick financing (also billed as alternative lending) is an automated way of lending money to SMEs. With automated scanning and quick interpretation of data, results can be produced in a matter of days, making credit scores, business plans, and lengthy meetings unnecessary. The Philippines is yet to embrace this alternative type of loan source.

Oracle’s Digital Demand studied over 5,000 consumers from multiple countries and found over 40% believed that non-banks are better equipped to assist SMEs with their monetary requirements. Alternative lenders, like quick-financing business loans, are predicted to play an increasingly influential role in the Philippines due to SMEs’ lack of access to traditional forms of credit.

However, a recent study examining 480 SMEs in Manila and Calabarzon showed that 40% of companies were lacking access to finance informal credit markets, proving there isn’t even a plan B for many businesses. This fact does not only hinder small businesses’ ability to pay their employees, but also limits their capacity for technological adaptation and advancement.

A seamless balance of quick-financing business loans and a capacity to quickly adapt to technological solutions this 2021 will provide better access to credit for SMEs and other start-up businesses and will pave the way, economists believe, for the recovery of the country’s economy. By offering innovative solutions to non-IT firms and accruing foreign investment, SMEs will continue to steer the economy to better this year—despite a time of unprecedented uncertainty—something that all Filipinos truly deserve.

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The Philippine economy under the pandemic: From Asian tiger to sick man again?

Subscribe to the center for asia policy studies bulletin, ronald u. mendoza ronald u. mendoza dean and professor, ateneo school of government - ateneo de manila university @profrum.

August 2, 2021

In 2019, the Philippines was one of the fastest growing economies in the world. It finally shed its “sick man of Asia” reputation obtained during the economic collapse towards the end of the Ferdinand Marcos regime in the mid-1980s. After decades of painstaking reform — not to mention paying back debts incurred under the dictatorship — the country’s economic renaissance took root in the decade prior to the pandemic. Posting over 6 percent average annual growth between 2010 and 2019 (computed from the Philippine Statistics Authority data on GDP growth rates at constant 2018 prices), the Philippines was touted as the next Asian tiger economy .

That was prior to COVID-19.

The rude awakening from the pandemic was that a services- and remittances-led growth model doesn’t do too well in a global disease outbreak. The Philippines’ economic growth faltered in 2020 — entering negative territory for the first time since 1999 — and the country experienced one of the deepest contractions in the Association of Southeast Asian Nations (ASEAN) that year (Figure 1).

Figure 1: GDP growth for selected ASEAN countries

And while the government forecasts a slight rebound in 2021, some analysts are concerned over an uncertain and weak recovery, due to the country’s protracted lockdown and inability to shift to a more efficient containment strategy. The Philippines has relied instead on draconian mobility restrictions across large sections of the country’s key cities and growth hubs every time a COVID-19 surge threatens to overwhelm the country’s health system.

What went wrong?

How does one of the fastest growing economies in Asia falter? It would be too simplistic to blame this all on the pandemic.

First, the Philippines’ economic model itself appears more vulnerable to disease outbreak. It is built around the mobility of people, yet tourism, services, and remittances-fed growth are all vulnerable to pandemic-induced lockdowns and consumer confidence decline. International travel plunged, tourism came to a grinding halt, and domestic lockdowns and mobility restrictions crippled the retail sector, restaurants, and hospitality industry. Fortunately, the country’s business process outsourcing (BPO) sector is demonstrating some resilience — yet its main markets have been hit heavily by the pandemic, forcing the sector to rapidly upskill and adjust to emerging opportunities under the new normal.

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Second, pandemic handling was also problematic. Lockdown is useful if it buys a country time to strengthen health systems and test-trace-treat systems. These are the building blocks of more efficient containment of the disease. However, if a country fails to strengthen these systems, then it squanders the time that lockdown affords it. This seems to be the case for the Philippines, which made global headlines for implementing one of the world’s longest lockdowns during the pandemic, yet failed to flatten its COVID-19 curve.

At the time of writing, the Philippines is again headed for another hard lockdown and it is still trying to graduate to a more efficient containment strategy amidst rising concerns over the delta variant which has spread across Southeast Asia . It seems stuck with on-again, off-again lockdowns, which are severely damaging to the economy, and will likely create negative expectations for future COVID-19 surges (Figure 2).

Figure 2 clarifies how the Philippine government resorted to stricter lockdowns to temper each surge in COVID-19 in the country so far.

Figure 2: Community quarantine regimes during the COVID-19 pandemic, Philippine National Capital Region (NCR ), March 2020 to June 2021

If the delta variant and other possible variants are near-term threats, then the lack of efficient containment can be expected to force the country back to draconian mobility restrictions as a last resort. Meanwhile, only two months of social transfers ( ayuda ) were provided by the central government during 16 months of lockdown by mid-2021. All this puts more pressure on an already weary population reeling from deep recession, job displacement, and long-term risks on human development . Low social transfers support in the midst of joblessness and rising hunger is also likely to weaken compliance with mobility restriction policies.

Third, the Philippines suffered from delays in its vaccination rollout which was initially hobbled by implementation and supply issues, and later affected by lingering vaccine hesitancy . These are all likely to delay recovery in the Philippines.

By now there are many clear lessons both from the Philippine experience and from emerging international best practices. In order to mount a more successful economic recovery, the Philippines must address the following key policy issues:

Build a more efficient containment strategy particularly against the threat of possible new variants principally by strengthening the test-trace-treat system. Based on lessons from other countries, test-trace-treat systems usually also involve comprehensive mass-testing strategies to better inform both the public and private sectors on the true state of infections among the population. In addition, integrated mobility databases (not fragmented city-based ones) also capacitate more effective and timely tracing. This kind of detailed and timely data allows for government and the private sector to better coordinate on nuanced containment strategies that target areas and communities that need help due to outbreak risk. And unlike a generalized lockdown, this targeted and data-informed strategy could allow other parts of the economy to remain more open than otherwise.
Strengthen the sufficiency and transparency of direct social protection in order to give immediate relief to poor and low-income households already severely impacted by the mishandling of the pandemic. This requires a rebalancing of the budget in favor of education, health, and social protection spending, in lieu of an over-emphasis on build-build-build infrastructure projects. This is also an opportunity to enhance the social protection system to create a safety net and concurrent database that covers not just the poor but also the vulnerable low- and lower-middle- income population. The chief concern here would be to introduce social protection innovations that prevent middle income Filipinos from sliding into poverty during a pandemic or other crisis.
Ramp-up vaccination to cover at least 70 percent of the population as soon as possible, and enlist the further support of the private sector and civil society in order to keep improving vaccine rollout. An effective communications campaign needs to be launched to counteract vaccine hesitancy, building on trustworthy institutions (like academia, the Catholic Church, civil society and certain private sector partners) in order to better protect the population against the threat of delta or another variant affecting the Philippines. It will also help if parts of government could stop the politically-motivated fearmongering on vaccines, as had occurred with the dengue fever vaccine, Dengvaxia, which continues to sow doubts and fears among parts of the population .
Create a build-back-better strategy anchored on universal and inclusive healthcare. Among other things, such a strategy should a) acknowledge the critically important role of the private sector and civil society in pandemic response and healthcare sector cooperation, and b) underpin pandemic response around lasting investments in institutions and technology that enhance contact tracing (e-platforms), testing (labs), and universal healthcare with lower out-of-pocket costs and higher inclusivity. The latter requires a more inclusive, well-funded, and better-governed health insurance system.

As much of ASEAN reels from the spread of the delta variant, it is critical that the Philippines takes these steps to help allay concerns over the country’s preparedness to handle new variants emerging, while also recalibrating expectations in favor of resuscitating its economy. Only then can the Philippines avoid becoming the sick man of Asia again, and return to the rapid and steady growth of the pre-pandemic decade.

The Entrepreneurial Spirit in the Philippines: A Call to Empower the Youth

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Doing Business in the Philippines

The Philippine government continues to work towards fully reopening the economy, and is ready for more foreign direct investments, as recent consecutive reforms in Philippine business laws have made doing business in the country easier.

Among these initiatives are landmark legislations such as the passage of the CREATE Act, the amendments to the Foreign Investment Act, Retail Trade Liberalization Act, and the Public Service Act, as well as the approval of the 2022 Strategic Investment Priority Plan (SIPP).

The Doing Business in the Philippines handbook aims to equip both local and foreign entrepreneurs with a practical guide to navigating the ever-evolving business landscape in the Philippines. It provides information on the requirements needed when setting up and operating a business in the Philippines, including incentives under special registrations, taxation, employment, IP, dispute resolution, and industry-specific regulations.

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Philippines in the 21st century: business opportunities and strategic marketing implications.

EDUARDO P. GARROVILLAS

Marketing Department and faculty of MBA Graduate School, Jose Rizal University, Philippines

Professor and Chair of Marketing Department and faculty of MBA Graduate School.

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This is a descriptive-exploratory study of the Philippines — a vibrant emerging market of Asia. It contains a mosaic of the country's features — a dash of history, sociopolitical and cultural information, economic indicators, affiliation with the ASEAN and WTO, investment opportunities, and strategic marketing implications. Under the lens of innovation and imagination, the attributes and endowments of this country speak eloquently of the untapped business opportunities, let alone its rich natural and human resources. This chapter serves as a guide for business investors, marketers, and international business managers and scholars.

Philippines economic outlook 2022

Companies doing business in the Philippines are assessing the implications of COVID-19 on the country’s economy. They are likely to find that three shifts introduced during the pandemic will persist into the future: economic activity will be digitally enabled but also hyperlocal; the wealth gap is widening, and new consumer segments have emerged; and the pandemic is likely to result in a greener and more sustainable economy.

Meanwhile, the consensus view shows the Philippines economy recovering by the fourth quarter of 2022 under a muted scenario, even taking the Omicron wave into account (Exhibit 1).

The economic outlook varies by industry; companies in the consumer and retail sector are likely to see a muted recovery through 2022 (Exhibit 2), but consumer demand for essentials remains strong, while some discretionary spending is likely to rebound in line with other countries in the region. The consumer behaviors learned during the pandemic—digital migration, value hunting, and the homebody economy—may stick.

The travel and hospitality sectors are poised to surpass 2019 growth in 2022, although headwinds could stall tourism recovery until 2024. In the interim, companies can take targeted actions to reinvent themselves and grow out of the pandemic. In financial services, the banking sector could take up to five years to recover from its 2020 drop in return on equity (Exhibit 3). Among Filipino consumers, active use of digital banking and e-wallet services has increased significantly.

The healthcare sector is expected to grow through 2022, while pharmaceutical manufacturing is likely to remain steady. Certain consumer behaviors—digital-care adoption, focus on preventive care and wellness, and interest in value for the money—are likely to stick after the pandemic.

Likewise, the energy and power sector is expected to expand through 2022. Finally, the outlooks for IT business process outsourcing (BPO) and remittances from overseas Filipino workers, a resilient lifeline for the Philippine economy, remain strong (Exhibit 4).

Jon Canto is an associate partner in McKinsey’s Manila office, where Kristine Romano is a partner.

The authors wish to thank Johann Co, Ryan Delos Reyes, Justine Eligio, Jazmin Jabines, Miguel Morales, Danice Parel, Patrick Roasa, and Carlos Syquia for their contributions to this article.

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Ease of Doing Business in the Philippines

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In maintaining its role as one of the key players in the global economic landscape, the Philippines has proven its resilience against a backdrop of challenging economic conditions and rising geopolitical tensions.

Aside from its rich natural resources, the Philippines’ deep pool of highly trained and educated talent attracts investors across a variety of industries. This is most evident in the Philippines’ Information Technology and Business Process Management (IT-BPM) sector which continues to be one of the best-performing and employment generating area of the Philippine economy.

The Philippines has proven its resilience against a backdrop of challenging economic conditions and rising geopolitical tensions.

How to Be Successful in Business in the Philippines

Last Updated – Jan 22, 2024 @ 10:43 am

Starting your own business is a shot in the dark. It will push you out of your comfort zone, and challenge you in ways you never thought were possible. But despite the hardships that come with creating your own business, a lot of Filipinos are still doing it.

In 2020, the Department of Trade and Industries tallied a staggering 839,444 business registrations between January and early November. This signals a 32% jump from 2019 1 .

What’s more surprising is that according to the Philippine Statistics Authority, a whopping 99.51% of the 957, 620 business enterprises in the country are MSMEs. 2

Unfortunately, all these businesses don’t see the end of the tunnel. Over 70% of businesses in the country closed due to the pandemic, and this number is not unique to the Philippines. 3

In the US, 20% of small businesses fail within their first year. The number climbs to 50% in the fifth year, and after a decade, only a third of these businesses remain operating. 4

Considering these numbers, the inherent risks that come with starting your own business are truly not for the faint of heart. To help protect your interest, you must know the most common culprits that cause businesses to fail. This way, you can expect and prevent the obstacles that may come in the future. This article will help you increase your chance of achieving entrepreneurial success.

Common Reasons Why Businesses Fail in the Philippines

A lot of entrepreneurs get uncomfortable when they are forced to talk or learn about failure. However, ignoring the most pressing reasons why businesses fail will only get you in trouble.

Considering the alarming rate of businesses closing in their first decade, you need to study this section well.

Problems with cash flow

Without cash, it would be impossible for your business to run. All establishments need cash flow so they can float through various sales cycles – high or low.

An empty bank account is one of the major reasons why a lot of great businesses fail because the sad reality is, cash is truly king in the world of business, and not everyone can turn to lenders when cash is strapped.

No market fit or insufficient demand

You can’t possibly create a business without being sure that there is a demand for your product or service. Before launching, make sure you have concrete data on your customer profile and existing competition.

More than that, you also need to have your Unique Selling Proposition or USP. All these are invaluable to help you make better decisions that translate into sales.

If your business is riding on a trend, always be ready to adapt when the trend naturally fizzles out.

Run out of capital or funds

This is by far one of the major reasons why a lot of businesses that show potential close in their first few years.

A lot of entrepreneurs underestimate how expensive it is to run a business , especially since you want to meet all internal and external expenses such as rent, staff salary, equipment, and raw materials.

When you don’t have access to capital , whether it’s in the form of debt finance or personal savings , your business will lack the fuel it needs to survive.

Did not have the right team or employees

You’ll be surprised at how the right people can help your business thrive. When you don’t prioritize your recruitment process, you will end up hiring unreliable staff that will simply drag your business down.

Keep in mind that all entrepreneurs should be good leaders. They must foster a healthy, happy, and loyal team that is motivated to push the company forward.

Edged out by the competition

If there is already too much competition in your industry, and you’re late to the game, it’s like putting your one foot in the grave.

Starting your business and cementing your brand reputation is hard enough, but if you have to fight an uphill battle due to intense market saturation, you’ll end up draining your resources.

Related: Complete Guide to Business Development

9 Steps for Building a Successful Business in the Philippines

Starting your business venture and seeing it grow is one of the most rewarding things in the world. While the process may seem hard and intimidating, it can be boiled down to 9 simple steps.

1. Define exactly what you want to achieve

When it comes to starting your business venture, you first need to ask yourself what your goals are. Make sure that you are setting SMART goals from the beginning. SMART means:

S pecific M easureable A chievable R esult-Driven T ime-bound

It is important to ask yourself three vital questions when setting up your goals . What does your business idea look like in the next 5 years?

What can you do now to test your long-term goals? And lastly, what is the major and enduring purpose of your business?

So instead of writing you want to have a successful business in a few years as a goal, specify it to “earn Php100,000 per month in two years.”

Related: How to Improve your Business

2. Develop an entrepreneur’s mindset

There is no doubt that being an entrepreneur is one of the most exciting things you can be. But how do entrepreneurs think and behave?

First, they spend time with successful people. If you want to be the best, you need to surround yourself with the best. Become part of a group where you can learn and share ideas. These people should also support you and motivate you to make the best entrepreneurial decisions.

More than that, you also need to practice your ability to make quick decisions and stay focused even when everything around you is not working well.

Related: Essential Business Skills

3. Identify your Product Market Fit (PMF): Address a real market need

Product Market Fit is a scenario where your target customers are purchasing, using, and telling their peers about your products in numbers that are enough to sustain your profitability.

When you skip this process, you’ll miss out on a great product that can satisfy the market.

Before developing any product, make sure you have the feasibility study to back up that enough people are willing to pay for it.

Also Read: How to Validate your Business Idea

4. Create a business plan that outlines everything from launch to operation

Your business plan will serve as the steering wheel of your business venture from the day you launch it, to the day it grows. A great business plan will guide you on what you need to do in every stage of your business.

Thankfully, making a business plan for the next 5 years is not as hard as you think. Instead of treating it as a one-time document, picture it as an ongoing project that is made up of mini-plans that cover sales, marketing , operations, pricing, and other aspects of your business.

5. Prepare everything you’ll need to launch your business

Before launching your business idea, you need to do your assignment. This involves researching your industry, finding out about your competition, and mapping out your financial plan .

This sounds like a lot of work but if you forgo this duty, you’ll end up being unprepared to take on the market. When you feel like you need to do a thousand things at once, do not hesitate to outsource .

If you can’t afford to hire help, delay your launch until you have settled everything. Here’s a checklist of what you should know before launching your business venture:

Vision and mission
Financial plan
Tax obligations
Business plan
Business processes

6. Set up strong systems & workflows

Can you imagine how long it would take for a fast-food chain to serve your burger if they did not have a clear business process and workflow ?

Setting up these things will enable you to communicate better with your employees, and get things done more effectively. This leads to better customer satisfaction.

7. Build a great team

Great businesses have high-performing teams that can communicate well with each other. As an entrepreneur, your goal should be to cultivate a strong team and encourage employees to work with each other towards the same goal.

A great team is goal-oriented, committed to their roles, has diverse experiences, and is open to learning. When teams have these qualities, as well as a shared set of goals and values, they can help the business grow.

To ensure that your team works together seamlessly and performs to the best of their abilities, you need to demonstrate great leadership skills .

8. Keep detailed records

Without keeping a detailed record of your transactions, you will be running your business venture through guesswork.

It is recommended to follow this step so you know exactly where your business stands, as well as the challenges you will be facing. This way, you can create the right business strategies to overcome certain challenges.

9. Provide excellent customer service

It takes more than an awesome business idea and capital to ensure business success. You also need to ace your customer service .

A study by NewVoiceMedia revealed that 51% of customers will not do business again with a company after a bad service experience. 1

Considering this, meeting your customer’s satisfaction is mandatory if you want to enjoy more sales opportunities in the future.

8 Tips for Achieving Success in Any Business

There is no clear recipe for success, especially in business. Before you bring your business idea to life, you need to be armed with tips that will increase your chances of being successful.

1. Have a clear vision of what you’re trying to achieve

When it comes to running a business, you need to have two clear visions: short-term and long-term. Your short-term vision will help you get through day to day operations.

On the other hand, your long-term vision will be the driving force that will help you navigate the long and arduous journey of running your business.

2. Find out what makes your product, service, or brand unique

No matter what industry you belong to, you are probably dealing with intense competition. Your USP will help set you apart from other businesses that offer the same products and services as you.

If you don’t figure out what your USP is, you’ll simply blend into the background.

Your USP can be many things. It can solve a problem, take away your customer’s pain point, or satisfy a need. For instance, there are many shampoo products customers can choose from today.

If you want to be unique, you can sell shampoo bars made from wholesome ingredients to limit plastic waste.

3. Learn how to market effectively

When starting a business, you can’t expect to have thousands of customers by simply telling your relatives and friends that you launched a product.

You need to dive deep and develop effective marketing strategies to get the word out about your business.

With marketing, you will reach and connect with your target customers, and set the pace for how your business will run.

Failing to understand the importance of traditional and digital marketing means you will lose out to your competition, and miss out on targeting opportunities.

4. Know your competition

You may think there’s no need to learn about your competition because you’re not a competitive person, but finding out who your competition is, what they are offering, and how much their services are will help you make your brand stand out more.

When you know your competition, you can price your products competitively, respond to marketing campaigns with your unique initiatives, and have the upper hand when it comes to bringing relevant information to your customers.

5. Find Opportunities

Once you launch your business, you may think there is no need for you to study the market anymore. However, examining the current market condition will help you find more opportunities for sales.

Finding opportunities involves working on an existing concept and improving it.

For instance, if you noticed that most of your customers are using mobile, you can leverage the power of mobile-optimized websites to get you more leads and conversions.

6. Stay focused on your goals

Staying focused is one of the most valuable qualities of any business owner. However, how can you maintain your focus if you have to worry about your marketing, sales, expenses, and managing your staff all at once?

Writing your goal always helps. Make sure to keep your goal list visible so you will always be reminded of the reason why you are working.

Aside from that, set milestones. It can be extremely frustrating to not see results when you are only focusing on your long-term goal. By ticking off small tasks, you will stay more motivated.

7. Have a plan for growth

In the previous section, we tackled the importance of a business plan not only for your day-to-day operation but also for your growth.

Your business growth plan outlines your strategy. This can be something as simple as phrases and bullet points, or an in-depth document. After executing your plans, track your progress, and adapt based on your findings.

Growth is vital for the long-term sustainability of your business. It does not only help you get new sales, but also acquire new assets, attract better talent, and offer more useful products.

8. Build relationships with customers & other businesses

Forging relationships is mandatory for business owners, especially with your customers. Your target marketing will be more comfortable with your brand if they feel valued.

Keep in mind that repeat customers are more profitable than new ones, so take time to nurture them by asking them for feedback, showing genuine interest in their experiences, and encouraging them to converse with you.

Your customers are not the only ones you should build relationships with.

You must also make sure you develop a good relationship with other businesses . To do this, routinely communicate with your suppliers , offer help, and ask for feedback.

What Successful Businesses have in Common

It can be demotivating to think that the odds of your business lasting for more than a decade are slim based on evidence. To help you get a better picture of what you should work on, we’ve rounded up the characteristics successful businesses have in common.

1. A Strong USP

Competition is tough – that may not come as a surprise to you. But if you don’t find a way to ace your competition and stand out, your customers won’t patronize your products. Therefore, business success would be out of the picture.

Whether it’s hiring the best staff , offering great customer service, selling the lowest-priced items, or finding unique raw materials, there are countless wants to make your business shine from your competition.

2. Efficient Businesses & Operational Processes

When you don’t prioritize streamlining your business and operational processes, you will simply be wasting effort, time, and money.

So how can you develop your business and operational processes?

First, examine your current processes. If your teams are wasting their time and resources on things that do not matter in the long run, chances are, it needs a drastic improvement. Do not be afraid to ask your team managers and employees for suggestions.

Additionally, automate as many tasks as you can. This way, you can decrease the risk for error, and finish tasks at a faster rate.

Related: Best AI Tools for Business

3. Well-maintained Accounting

Improving accounting & bookkeeping processes in your business will not only lead to better efficiency but also loss prevention and higher revenue.

Whether you run a small business or a huge corporation, you should streamline accounting processes, but how exactly can you do this?

First, automate repetitive tasks. Technology is your friend, and all departments of your business can benefit from it, even accounting.

If you don’t have time to do accounting yourself, or cannot afford to hire a full-time accountant, you can outsource this service . Having a reliable accountant on your team will help you gain valuable insight into your growth.

4. Excellent Marketing Tactics

If you look at all successful entrepreneurs in different industries, you will notice that they have a heavy focus on marketing.

Marketing goes beyond spending thousands of pesos on Facebook and Instagram ads. It also involves planning how you can make a connection with your target customers.

Even if you don’t have a huge budget for marketing, that is not an excuse to skip it. Instead, it’s a reason to work harder to create more valuable content for your customers.

5. A Well-Built & Effective Team

Just because you posted a vacant position on a local job board does not mean the best talent will immediately knock on your door.

As observed in the top businesses in the country, they value their employees by giving them competitive salaries and benefits.

When the team is well compensated and experiences the benefits of work-life balance, employees will work better towards achieving their goals.

6. Focuses on the Customer

If you don’t want to be another faceless brand, you need to be fully committed to making your customers happy.

The most profitable business is not afraid to do the leg work in keeping in touch with their customers. Their target market is always at the center of all their initiatives and development processes.

7. Gets helpful insight from advisors and mentors

Even if you have decades of experience in running a profitable business, you still need the help of trusted advisors and mentors to help you make more informed decisions.

When you have a successful entrepreneur on your side, someone can challenge your vision. They are also the best ones to ask if you are at a crossroads on how to run your business.

8. Resilient & Adaptable

The pandemic has taught millions of Filipinos that adapting to unexpected situations is integral for survival. For instance, many restaurants now offer al fresco dining and delivery options to increase orders.

If you want to become a successful entrepreneur, you need to be prepared to pivot from your current strategy and try new things. This can include launching a new product, changing your raw materials, or expanding your list of offers.

NewVoiceMedia

About MJ de Castro

MJ de Castro is the lead personal finance columnist at Grit PH.

MJ started her career as a writer for her local government’s City Information Office. Later on, she became a news anchor on PTV Davao del Norte.

Wanting to break free from the shackles of her 9-to-5 career to live by the beach, she pursued remote work. Over the years, she has developed a wide specialization on health, financial literacy, entrepreneurship, branding, and travel.

Now, she juggles writing professionally, her business centering on women’s menstrual health, and surfing.

Education: Ateneo de Davao University (AB Mass Communication) Focus: Personal Finance, Personal Development, Entrepreneurship, & Marketing

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This article also features in The Report: Philippines 2021 . Read more about this report and view purchase options in our online store.

The Report: Philippines 2021

The Philippines is one of the world’s fastest-growing nations. Although economic activity slowed during the 2020 Covid-19 pandemic period, stimulus measures, imminent public sector policies and a larger budget are expected to create jobs, generate growth and help kick-start the country’s recovery during 2021.

Country Profile

Financial services, industry & agri-business, transport & infrastructure, construction & real estate, digital economy.

Legal Framework

The Republic of the Philippines reaches from Taiwan in the north to Indonesia in the south. It is the fourth-largest country in South-east Asia after Indonesia, Myanmar and Thailand. Bordered by the South China Sea – also known locally as the West Philippine Sea – in the west and the Sulu and Celebes seas in the south, the Philippines is home to some 175 ethnolinguistic groups across thousands of islands. In January 2020 the Philippines reported the first Covid-19 case outside of China. Authorities enforced one of the world’s longest, most stringent lockdowns in response, starting in mid-March – with a range of restrictions still effective at the end of the year. A wide-ranging stimulus package was passed in March, followed by a second in September, to help mitigate the economic impact of the crisis and aid the health response. This chapter contains an interview with President Rodrigo Roa Duterte.

The Philippines’ financial services sector entered the Covid-19 pandemic on a solid footing, thanks to decades of regulatory reform to address the vulnerabilities exposed by the 1997-98 Asian financial crisis. Strong capital buffers, high levels of provisioning and near-universal public health cover insulated the country from many of the impacts that other markets continue to wrestle with. While geographic spread and socio-economic disparities remain structural barriers, increasingly tech-focused growth strategies are improving both bottom lines and financial inclusion among the population in measurable ways. The country has experienced a boom in digital banking as a result of the Covid-19 pandemic, with several digital-only banks announcing plans to enter the market, legacy banks rapidly upgrading their online offerings and the central bank eyeing ambitious digital banking targets. This chapter contains interviews with Benjamin E Diokno, Governor, Bangko Sentral ng Pilipinas; Kelvin Ang, CEO, AIA Philam Life; and Sanjiv Vohra, President and CEO, Security Bank.

Industry has made a sustained contribution to the Philippines’ economy in recent years, accounting for roughly 30% of GDP between 2017 and 2019, with sector growth driven predominately by manufacturing. Expansion was constrained in 2020 as Covid-19 response measures impeded manufacturing activity and reduced the global demand for industrial products. Meanwhile, agriculture comprised 9-10% of GDP from 2017-19 and is a crucial source of employment. Increased emphasis has been placed on transforming traditional farming into a dynamic agri-business sector – which will be key to the country’s economic rebound. After a difficult 2020 it will be necessary to address ongoing challenges – including high production and electricity costs, inadequate infrastructure and limited basic industries – to enable long-term manufacturing growth. Supporting businesses in the adoption of the Fourth Industrial Revolution, or the application of new digital and automated technologies to enhance production processes and service delivery, will further boost resilience. This chapter contains interviews with Ramon M Lopez, Secretary of Trade and Industry; William Dar, Secretary of Agriculture; and Christopher Po, Executive Chairman, Century Pacific Food.

Tourism played a central role in the Philippines’ economic development in the years leading to 2020, and an increasing emphasis on sustainability underscores the sector’s importance for the coming years. While the popular island of Boracay has long drawn tourists, local authorities continue work to diversify destinations through the creation of tourism enterprise zones. These endeavours, as well as those aimed at widening source markets, have laid the groundwork for an expanded yet more tailored offering. Although the 2020 Covid-19 pandemic heavily impacted tourism, Philippine policymakers and stakeholders are looking to adapt the sector’s offering and prioritise domestic tourism to support the national recovery. Enhanced health and safety measures have been implemented to align hotels, tourism sites and other services with the demands of the new normal. Meanwhile, a shift towards digitalisation and the use of technology to upskill the workforce are readying the sector for the future. This chapter contains an interview with Aileen Clemente, Chairman and President, Rajah Travel.

Transport operations and infrastructure development in the Philippines were acutely impacted by the Covid-19 pandemic as lockdowns stalled construction projects, movement restrictions prohibited travel even within communities, and a ban on international arrivals in March limited aviation services for the rest of 2020. As the country’s response to Covid-19 began to take shape in the first half of 2020, it soon became clear that transport and infrastructure spending would be protected as a key driver of economic continuity and recovery. In an April outline of the socio-economic response, Carlos Dominguez, the secretary of finance, stated that the government would press on with President Rodrigo Duterte’s flagship Build, Build, Build infrastructure programme to generate economic activity and create employment. As early as May 2020 the Department of Transportation announced that, despite ongoing lockdowns in Luzon, it would resume work on 13 big-ticket projects – albeit with certain limitations. This chapter contains interviews with Tony Fernandes, CEO, AirAsia Group; and Rubén Camba, South-east Asia Director, Acciona.

Philippine authorities have worked to develop the digital economy in recent years, prioritising strengthened internet service provision and a more competitive telecoms market. The country saw an increased reliance on online services and digital technologies, such as e-commerce, during the its extended lockdown period in response to the Covid-19 pandemic. This increased the impetus for players across the value chain to strengthen ICT infrastructure, fast-track the digitalisation of business processes and prepare to upskill the workforce for the new normal. Meanwhile, the versatility of the business process outsourcing industry during the quarantine period, alongside an expanding start-up ecosystem and the entry of a third telco in 2021, signals potential for the digital economy to enhance the post-pandemic recovery. Measures to accelerate digital development look set to improve the ease of doing business, create a more attractive destination for investment, and ultimately facilitate more inclusive and sustainable economic growth. This chapter contains interviews with Marc Carrel-Billiard, Global Senior Managing Director and Technology Innovation Lead, Accenture Labs; and Simoun Ung, President and CEO, OmniPay.

The Philippines’ universal health care (UHC) system is now operative, after President Rodrigo Duterte signed the bill into law in February 2019 and Francisco Duque III, the secretary of health, signed the implementing rules and regulations in October that year. This set the stage for 2020 to be the first year of UHC, strengthened by collaboration and the expertise of the private sector. Limited financing and a shortage of medical personnel remain legacy constraints on the system, with wide-ranging strategies to tackle both communicable diseases and non-communicable diseases among the growing population. Although the Covid-19 pandemic placed further pressure on health care infrastructure, the government forged ahead with its goal, deploying resources to priority areas as funds and capacity allowed. The private sector stepped up to fill some of the remaining gaps, and greater levels of cooperation between public and private actors are expected as UHC gains momentum. This chapters contains an interview with Eugenio Ramos, President and CEO, The Medical City.

This chapter examines the legal system of the Philippines, focusing largely on the stipulations of Bayanihan 1 and 2, which were passed into law in March and September 2020, respectively, to address the economic and health impacts of the Covid-19 pandemic. The chapter also outlines new guidelines on remote participation, corporate donations, corporate debt vehicles and draft guidelines for the licensing of digital banks, alongside various other changes to tax laws and regulations, labour-related laws and regulations, and regulations for the filing and submission of securities deposits that were implemented during the pandemic period. This chapter contains an interview with Raoul Angangco, Partner, Villaraza & Angangco Law.

This chapter contains selected listings of some of the top hotels in Metro Manila and Baguio, helpful tips for business and leisure travellers, and other useful suggestions for travel to the Philippines. This chapter contains an interview with Bárbara Apráiz de Encío, Executive Director, Spanish Chamber of Commerce.

There are no articles in this chapter. To view the table of contents, please open click the "View in online reader" link above.

Articles & Viewpoints

President Rodrigo Roa Duterte

On facilitating economic rebound and reducing financial inequality

Carlos Dominguez, Secretary of Finance: Interview

On fiscal policies and tax reforms to facilitate economic recovery from the pandemic

Benjamin E Diokno, Governor, Bangko Sentral ng Pilipinas (BSP)

On guiding the economy through a global crisis

Ramon M Lopez, Secretary of Trade and Industry

On increasing competitiveness and investment inflows

Christopher Po, Executive Chairman, Century Pacific Food

On adapting to shifts in consumer behaviour

Marc Carrel-Billiard, Global Senior Managing Director and Technology Innovation Lead, Accenture Labs

On leveraging technology and narrowing the digitalisation gap

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Understanding Business Culture In The Philippines

How does a business meeting in the Philippines lead to closing the deal? Business relations grow strong slow and steady. Yet, persuading a partner requires more than persistence. It starts with understanding their culture and background. How and when to approach a partner and not sound offensive? How do you recognize the key people who…

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How and when to approach a partner and not sound offensive? How do you recognize the key people who are worth influencing? Can you negotiate? And, how to do it all by following the right etiquette?

In this article, we show three stages of engaging with your future business partner. How to prepare for a meeting, how to leave a good impression during the meeting and how to close the deal.

Key Influences of Business Culture in the Philippines

The Philippines business culture is a blend of different western and eastern influences. The Catholic church also plays a major role.

The society is hierarchically structured as elsewhere in Asia. For example, “keeping a face” is very important to Filipinos. In business, avoiding both conflict, disagreement and public contradiction comes by default.

Being friendly does not necessarily mean that the negotiations are going well. They may want to avoid or silence an argument.

How to Prepare for a Business Meeting in the Philippines

Use your personal connections to get a high-level meeting.

The more (important) connections you have the easier it will be to do business in the Philippines. Business takes time. The best way to arrange high-level meetings is by a personal introduction by a common contact.

Know the Family Hierarchy in the Philippine Business Culture

Business culture in the Philippines sees that family-run businesses have a strong hierarchy. Key family members control how the company operates.

Note that foreigners are often hired as middle managers. They apply the decisions made by senior management. Maintaining a good relationship with middle managers will benefit you in the future. They will soon start working daily with you. Thus, do not spend too much time selling to people that don’t have the power to take your deal forward.

Don’t count on starting from lower level employees and building your way to the top. This rarely works and you should instead put your efforts to getting connected to the real decision makers right away.

Be on Time But Expect Your Partners to Be Late

Meetings in the Philippines often start later than agreed. Foreigners may find this unusual, although it is common in the local scenery. In fact, the more senior your business partner, the more likely they are late.

That does not mean that you can be late. In fact, you should never be late yourself. If your meeting takes places in one of the bigger cities then expect the traffic to be horrible. Plan to arrive at the meeting place an hour in advance and don’t expect to have more than 2-3 meetings in one day unless they are located nearby.

Learn When to Offer a Gift to Your Partner

There are two times when a business gift or treat is appropriate. The first gift during an early stage of developing relations. The second as a conclusion of satisfactory negotiations.

Get to Know the Local Etiquette

Avoid jokes about religion. Don’t directly confront people during a meeting, even if they said something you strongly disagree with. Remember the “keeping the face” aspect – let people keep their public reputation even if they made a mistake.

Avoid excessive eye contact as this may come across as being overly aggressive.

Communicate Clearly

Start off with a clear introduction to what you plan on discussing during the meeting. Despite your expectations, don’t rely on the participants’ individual initiative and communication.

English is the Philippine business language . But avoid making assumptions about partner’s behavior coming from the flawless language. Their communication style as well as talking in riddles is a strong hint of Asian roots. Therefore, it’s not rare that the non-natives find Philippine body language misleading.

Even if an offer is on the table, do not force an immediate answer. Your partner will find it very hard to say no. If partner offers you a confirmation, view it with caution. They may offer this to avoid conflict during the meeting but will withdraw after. Your role is to follow-up giving them a chance not to lose face on the spot.

You know a deal is a deal when a “yes” is accompanied by a written confirmation. If your partner tries to ignore discussions about the specifics of the deal then it’s a sign that most likely the “yes” you heard was just to please you and the negotiations are not actually successful yet.

Choose the Right Attire for a Business Meeting

Locals take good care of their appearances during both social and business occasions. Thus, it is important for you to also meet partners looking well-groomed.

Your appearance gives partner the first idea whether you are worthy to do business with. Make sure you look the part.

Men should wear a suit and tie, women should wear modest business attire. Of course assuming that’s a standard in your industry. Don’t go to a business meeting wearing shorts or casual wear, no matter how hot the weather might feel for you.

Leave a Good Impression During the Meeting

Exchange business cards.

Hand your business card using both hands. Put the received business cards on the table for the entire meeting and show interest in them. This also helps you to remember your partner’s name which you should be using several times during the meeting. Never put the business card directly to your pocket as it shows disrespect.

Build rapport with small talk

Greet the eldest or most important members first, following the hierarchy. Small talk is a very common method to build relations. Even if you wish to get straight to business, do not skip the small talk. It is a natural part of the business culture in the Philippines and thus vital for you to engage in.

However, don’t treat small talk as a random chat before you get to the real business talk. Use this time to display your likability, genuine interest in the subject and most importantly – to gather intelligence about your prospective business partner.

Avoid faking your interest in some subject just because you think your partner would like it. People can sense whether you’re sincere or not.

How to Negotiate in the Philippines

Bargaining is common amongst entrepreneurs in the Philippines. Negotiations are effective if you have the skills. Push the deal in a direction that benefits you most but make sure to cover the interests of both.

Although, it’s important to know where to stop. Don’t shout or impose anger at your partner if negotiations aren’t going like you expect. Note that negotiations may take longer than planned. The pace of doing business in the Philippines is relatively slow. Be ready to constantly re-assure that you, your company and your product are valuable without being overly pushy.

Negotiating a Lower Price

Filipinos may refuse bargaining if they are the ones buying. Then it’s mostly “take-it-or-leave-it”. Sometimes they also say that their funds are limited. When they decide to negotiate further, you likely need to improve your initial offer. Prepare that in advance and leave some room for negotiations.

It is common that they remind you of your competition to receive a lower price. If you do not give in, they will continue negotiations. They need the upper hand and wish to see if they can convince you. If you cannot accept their price demands, they will push credit terms and delivery dates.

Negotiating a Higher Price

If Filipinos are selling, they are likely reminding you of the demand on the market for this purchase. It is often that they invite several customers to discuss the deal together and then bargain at the same time.

Entertaining Your Prospective Business Partners

You may achieve a lot of progress in a relaxed dining atmosphere instead of a formal meeting room. Note that a few drinks before dinner are also not unusual in the Philippines.

Common entertainment locations are bars, restaurants, and hotel lounges. Don’t be surprised to find yourself at a karaoke bar. Partners sharing a meal is a common and important part of developing relations.

Note that business is almost never the first topic during dinner. The point of arranging a dinner is making people feel more comfortable with each other.

The inviting party is usually paying. Restaurants in the Philippines commonly add a service charge to their bill but a tip is not included. Depending on the service you receive, consider adding around 5%-15% tip.

Reach Emerhub via the form below for further tips on doing business in the Philippines. Our team will assist you with visa submission as well as help you set up a company .

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Ease of doing business in the Philippines

H ow difficult is it to do business in the Philippines in comparison to other economies? One way to answer this complex question is to look at the annual ease of doing business ranking issued by the World Bank in its Doing Business 2020 report.

This index ranks almost all of the world’s economies according to how easy it is to do business. It is based on a study of laws, regulations and practices in a given country, taking into account the following factors: starting a business; dealing with construction permits; getting electricity; registering property; getting credit; protecting minority investors, paying taxes, trading across borders; enforcing contracts; and resolving insolvency.

In other words, the rankings are used as an indicator of the simplicity of business laws and regulations, and the level of protection for businessmen and their property rights. As such, the rankings are often cited by legislators as a catalyst for the issuance of new laws and regulations to facilitate ease of doing business.

In the Doing Business 2020 report, the Philippines ranked 95 th out of 190 economies. Although this ranking was a significant improvement from last year’s performance, the Philippines still ranks last among the founding members of the Association of Southeast Asian Nations. Singapore is ranked second, Malaysia 12 th , Thailand 21 st , and Indonesia is in 73 rd place.

According to the World Bank, it takes an average of 13 procedures to start a business, nine procedures to register property, and 22 procedures to build a physical establishment in the Philippines. Once the business has been set up, the company makes 13 annual tax payments. If a contract is broken and a business needs to resolve a dispute with its customers or suppliers, it takes an average of 962 days to resolve an issue through our courts.

These inefficiencies have long been sought to be corrected by different congresses. Fortunately, the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 was signed and became effective on 17 June 2018. The Implementing Rules and Regulations (IRR) were passed on 17 July 2019.

The IRR seeks to provide simple and straightforward regulations for entrepreneurs, micro, small and medium-sized businesses and ordinary citizens:

All government agencies and offices in the Executive Department, including local government units (LGUs) and government-owned or controlled corporations that issue licences, clearances, or permits (LCPs) to business entities, are covered.
Each agency/office must submit a Citizen’s Charter, which outlines a comprehensive checklist of requirements, step-by-step procedures, and a schedule of fees.
There are prescribed processing times for LCPs – a maximum of three working days for simple applications, seven working days for complex applications, and 20 working days for applications that require technical evaluations and other conditions, subject to qualifications.
Each agency/LGU must adopt a zero-contact policy where interactions between applicants and government employees are limited. Electronic submission of requests and requirements is preferred.
Upon lapse of the processing time, the submission of complete documents and payment of all fees, the LCP is automatically deemed approved or extended.
The IRR prescribes penalties for: (1) refusal to accept applications/requests and to act on them despite complete submission of documents and payment of fees; (2) failure to give written notice of disapproval; (3) imposition of additional irrelevant requirements or costs; (4) failure to render service during regular working hours and within prescribed processing times; (5) failure or refusal to issue receipts; and (6) colluding with fixers. The penalties range from administrative liability and six months suspension to criminal liability, dismissal and perpetual disqualification to hold public office, imprisonment for up to six years and a fine of not more than US$40,000.
A Unified Business Application Form will be used in processing new applications and renewals. This consolidates all the information for an application such as local taxes and clearances, sanitary permits, zoning clearances and the like. In the same vein, there are streamlined procedures for securing fire safety clearances.
The IRR establishes a National Policy on Anti-Red Tape and Ease of Doing Business. This refers to a comprehensive business registration and regulatory management policy to improve competitiveness and ease bureaucratic and regulatory burdens on businessmen. It also adopts a whole-of-government approach, where agencies focus on providing integrated and streamlined public services.
Finally, the IRR creates an Anti-Red Tape Authority and Advisory Council. Essentially, these bodies implement the IRR and craft policies on business registration and regulatory management.

Any significant improvement in the ease of doing business in the Philippines requires a whole-of-country effort. The efforts by legislators, government agencies and private corporations are a welcome start to improving the business climate. Hopefully, these efforts will significantly reduce the entry barriers to businesses, which, ultimately, will lead to economic efficiencies for the benefit of the ordinary Filipino.

Paula P Plaza is an associate in the Litigation and Dispute Resolution Department of ACCRALAW Offices.

Contact details: Tel: +63 (2) 830-8000 Email: ppplaza@ accralaw .com

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Over the past decade, the Philippine development story has attracted international attention as it transformed from being the “Sick Man of Asia” to “Asia’s Rising Tiger”. However, the country’s strong growth momentum was abruptly interrupted by the COVID-19 pandemic, which continues to cast a huge shadow over its development outlook. With the country now at the crossroads, this paper reflects on and draws lessons for economic development and policy by examining the country’s three main economic episodes over the post-independence era: (a) the period of moderately strong growth from 1946 to the late 1970s, (b) the tumultuous crisis years from the late 1970s to the early 1990s, and (c) the period from the early 1990s to the 2019 when it rejoined the dynamic East Asian mainstream. Through comparative analysis, the paper also seeks to understand the country’s development dynamics and political economy. We conclude by highlighting elements of a recovery and reform agenda in the post-pandemic era.

Key Words: Philippines, economic development, economic history, political economy, institutions, COVID-19, ASEAN, comparative analysis

JEL codes: E02, I0, N15, O10, O43, O53, P52

Updated: 30 June 2024 / Responsible Officer: Crawford Engagement / Page Contact: CAP Web Team

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Home / Essay Samples / World / Asia / Philippines

Philippines Essay Examples

Research paper on how and why the philippines should save its endangered languages.

Must everything dying be saved? The ideas and discussions that surround this question have become truly more relevant in this day and age, especially in terms of languages. Many linguists are fervent in their works to document, preserve, and protect dying languages; or more aptly...

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Resiliency and Adaptability: Key Traits of the Filipino Spirit

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Philippine Tourism in the Pandemic: Balancing Safety and Promotion

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The Toxic Side of Filipino Hospitality: "Pakikisama" Culture

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The Living Legacy of Banaue Rice Terraces: a Cultural Marvel

The Philippines is composed of many islands. It is rich in natural resources, diverse cultures, and beautiful tourist spots within the islands. Many tourists visit the country to immerse their selves to these beautiful places. One of the most visited places in the country are...

What Can I Say to Describe Philippines

The Philippines is a very beautiful country, an archipelago with a total of more than 7,000 islands. In the describe Philippines essay I am going to answer some questions about this country, its culture, history and more. Yes, I agree with the differentiation between the...

Breaking Free from Colonial Mentality: Restoring Filipino Culture

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Effects of Globalization in the Philippines

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