Doing business in the Philippines? Here’s what you need to know

Philippines | BCBusiness

It’s a direct flight from Vancouver to the most English-speaking country in Asia

The GDP of the Philippines—an island country of 100 million in Southeast Asia—grew at a rapid pace last year: 7.2 per cent, with sectors such as business process outsourcing (which includes things like call centres and data entry for North American companies) growing at twice that rate. The young and growing workforce offers ample opportunities for Canadian companies, which exported over $600 million worth of goods and services to the Philippines in 2013.

Get Personal

“Personal relationships are important,” says Leo Valdes, president of the Philippines Canada Trade Council in Vancouver. “Business relationships tend to be high contact, and you have to learn at a personal level about who you’re dealing with.” That means a lot of small talk: “You’ll get a lot of questions about your family and where you live,” he says. “Most people in North America have a Filipino friend, so they understand the hospitality and warmth of the culture,” adds Michael Stephenson, founder of PayrollHero, an HR technology startup with head offices in Manila and Whistler, B.C.

Family Ties

Often, however, this relationship-driven way of doing business can obscure who is making decisions, says Stephenson. He points to the conundrum of the “hidden chairman,” where the most senior family member in a Filipino-owned company (most Filipino enterprises are privately held and family-owned) can have an 11th-hour veto on major decisions. “Often the biggest challenge is identifying who has final say above the CEO,” he says.

Tricky Business

Indeed, while recent governments have made strides tackling graft, the country ranked 105 out of 179 on Transparency International’s corruption ranking. Legal restrictions, regulatory inconsistency and a lack of transparency hinder foreign investment, according to the U.S. Commercial Service. The Philippines is a developing country with ports that suffer from decades of under-investment. Meanwhile, Manila’s roads and transit are struggling to meet the needs of a city of 11 million and growing. Stephenson says a typical employee spends 90 to 150 minutes commuting to work each day. Access to key utilities is also a challenge.