Doing Business in the Philippines – The Right Business Choice
| Posted by Gerry D in Business News on 2nd January 2007 |
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By Carina Roncesvalles
Doing business involves risks. And with risks involved, there is the natural necessity to be extra careful in taking every step towards taking a role in the business environment – whether through a single proprietorship, a family business, or a conglomerate.
Location, location, location. These are the key factors that spell the success or failure of a business venture. And in terms of location, the Philippines has always been on the map of viable business locations worldwide in almost all industries.
A humble country composed of 7, 107 islands is the Philippines lying at the heart of Southeast Asia. But more than just offering itself as a home, the Philippines has a lot offer to the smart businessmen.
Competitive labor force, government within reach of business ventures, regulatory framework supportive of private sector-led economic growth, and strategic location in Southeast Asia – these are the factors that make the Philippines a viable place for doing business.
Competitive labor force – the heart and soul of the business
The brilliant minds of Filipinos are always on the lookout for opportunities to be productive. With the high literacy rate in the country via the competitive academic institutions and the innate motivation to excel in the profession – looking for the right men and women to do the job is never difficult in the Philippines.
The English proficiency rate in the Philippines is also among the highest in the region. Thus, the Filipinos are very capable of communicating well with expatriates and foreign counterparts in the workplace.
The hands of men mold the future of every business venture. And the Philippines may very well be the right place where the successful businesses may be established. Filipino workers are highly-skilled. And just as priority is being given to college degrees that lead to different professions, technical and vocational courses are also at the helm. Blue collar jobs are not new to Filipinos who place high regard to being a key part of industries that are in need of highly skilled and motivated workers.
Millions of Filipinos have also invaded the international scene as migrant workers in various countries. Filipinos contribute not just to the development of the Philippine economy but to the economies of other countries as well.
Whether as managers, service providers or factory workers, Filipinos put premium to teamwork and loyalty – two traits that mirror the Filipino tradition of closely knit families, two traits that spell the difference in the workplace.
Government supportive of the private sector – the muscle of the business community
The Philippine government encourages more business activities in a bid to make the country globally competitive and at the same time make quality goods and services available to the people nationwide. This despite the perceived political noise hugging the headlines in the local and even in the international media.
The Medium Term Philippine Development Plan (MTPDP) 2004 to 2010, the government’s blueprint to lead the Philippines to global competitiveness places high regard to “Economic Growth and Job Creation.”
Economic growth and job creation are two sides of the same coin that a business venture holds.
In the MTPDP laid out by President Gloria Macapagal Arroyo, the following measures were enumerated as the basic strategies to enhance trade and investments, and thus improve the global competitiveness of Philippine enterprises:
- Making food plentiful at reasonable prices to make labor costs globally competitive;
- Reducing the cost of electricity through power sector reforms;
- Modernizing infrastructure and logistics to make transport and related costs efficient;
- Mobilizing and disseminating knowledge to make the workers and manufacturing processes more productive; and,
- Reducing red tape in all government agencies to reduce the cost of doing business.
The MTPDP also spelled out the following priority areas that merit incentive packages from the government: Information Technology and IT-enabled services; Automotive; Electronics; Mining; Healthcare; Tourism; Shipbuilding; Fashion Garments; Jewelry; and Agribusiness.
To further boost the viability of the Philippines as an investment site, the government also gives high priority to the improvement of the infrastructure system and communication facilities in the country. The Nautical Highway with Roll-on Roll-off vessels and ports stimulate trade and tourism activities in coastal communities. Regulatory reform measures to lower the connectivity costs and develop the human resource skills are always in the pipeline to provide cheaper and more accessible the digital infrastructure across the country in support of the ICT-related industries.
Regulatory framework – the backbone of the competitive business
The Philippine legislature is composed of two chambers – the Senate and the House of Representatives. The legislative process for the enactment of reform measures includes bills to encourage more investments in the country through fair regulatory practices, fair competition in industries, competitive wages for the workforce, and national budget that gives priority to quality education and improved infrastructure and communications systems.
The legislature also gives priority to the tax system to promote fair competition among key players in industries, and at the same time boost government revenues which would eventually improve the country’s stature in the international community, particularly in the credit agencies. Some of the recently enacted tax laws are the higher excise taxes on alcohol, cigarettes and tobacco products; and higher expanded value added tax.
In addition to the tax system, the incentive package for businesses is also under review to encourage more businesses in the new and important industries.
Strategic location in the region – the home of the successful business
The Philippines, an archipelago, sits in a land area of approximately 300,000 square kilometres. It is surrounded by the Pacific Ocean on the east, the Celebes (Sulawesi) Sea on the south, and South China Sea on the west and north. The country is divided into three geographical areas, namely, Luzon, Visayas and Mindanao.
The Philippines is a viable place for doing business. The country has the means to personify the business venture – competitive labor force to make the business stand out, supportive government to strengthen the enterprise, encouraging regulatory framework to put the company on solid ground and strategic location to pin success to the business venture.
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