Top tips for doing business in the Philippines

Published on March 17th, 2023

Top tips for doing business in the Philippines blog image

The Philippines is a Southeast Asian country located in the Western Pacific. The country is known for its vibrant culture, beaches, and friendly people. The Philippines is also an attractive destination for businesses due to its low labor costs and English-speaking workforce. If you’re thinking of doing business in the Philippines, here are a few tips to help you get started. 

Business culture in the Philippines

Doing business in the Philippines has its own unique set of challenges and opportunities. First and foremost, it’s important to understand the country’s culture and how it affects business. The Philippines is a deeply religious country, with over 80% of the population being Catholic. This can impact everything from business negotiations to workplace dynamics.  

The business culture in the Philippines is generally risk-averse and often takes an “it’s up to God anyway” approach when it comes to decision-making. This means that decisions are not made quickly or lightly, as there is much consideration given to the consequences of any action. As such, Filipino businesses typically focus on long-term strategies rather than short-term, high-risk ventures.  

Filipino business owners seek to build relationships of trust and loyalty, as well as take a conservative approach to manage finances and operations. This kind of culture promotes stability and sustainability in the long run, even if it means foregoing some potential opportunities in the present. Filipinos also have a strong sense of faith and often attribute success (and failure) to divine intervention. This further reinforces the risk-averse approach to decision-making in the Philippines. 

In addition, family plays a significant role in Filipino culture, and businesses are often structured around family relationships.  In the Philippines, family is viewed as a source of strength and support, which plays an important role in business dynamics. Family values are highly respected and taken into consideration when it comes to decision-making since those decisions will ultimately affect not only the employees but also the families they go home to. Therefore, the presence of family-oriented values in the business world has had a positive influence on Filipino businesses. 

Families are also closely linked to one another in the Philippines, and it is not uncommon for multiple generations of a single family to work together at the same company. This close relationship between families helps create an atmosphere of trust within an organization, as employees trust one another more deeply and are more willing to collaborate and help each other reach success. Furthermore, this close family connection often leads to stronger bonds between co-workers and higher levels of employee engagement. 

Understanding these cultural nuances is essential for doing business successfully in the Philippines. Additionally, the country’s legal system can be complex and bureaucratic, so it’s important to seek out experienced local help when setting up a business. With a better understanding of the country’s culture and doing business in the Philippines, foreign businesses can be well-positioned to take advantage of the many opportunities that exist here. 

How to do business in the Philippines 

There are a few things you need to know, before starting a business here. First, doing business in the Philippines is not for the faint of heart. The country has a complex bureaucracy, and navigating it can be a challenge. However, if you’re prepared to put in the work, doing business in the Philippines can be very rewarding.  

The country is full of opportunities, and there is a large market for many products and services. Achieving success in any venture demands a thorough knowledge of the local market and cultivating relationships with those who have influence in that specific area. With a little effort, doing business in the Philippines can be a great way to grow your company. 

Tips for doing business in the Philippines 

1. Learn about the culture – the concept of “hiya” 

The first step to doing business in any country is to learn about the local culture. In the Philippines, it’s important to be aware of the concept of “hiya.” Hiya is best described as a sense of shame or propriety. It dictates how people behave and can influence business dealings. For example, Filipinos may avoid giving direct criticism or saying no for fear of causing hiya. As a result, negotiations may take longer as both parties try to find a solution that doesn’t cause hiya. Understanding and respecting hiya will go a long way in building relationships with Filipino businesses. 

2. Choose your location carefully  

The Philippines is made up of more than 7,000 islands, so it’s important to choose the right location for your business. The three main island groups are Luzon, Visayas, and Mindanao. Luzon is the largest and most populous island group. It’s home to Manila, the capital city, as well as many large businesses and industries. The Visayas is comprised of several small to medium-sized islands and is known for its tourist destinations such as Boracay Island. Mindanao is the southernmost island group and is less developed than the other two island groups. However, it’s been earmarked for future economic growth so it may be worth considering for businesses looking to get ahead of the competition. 

3. Hire a local partner  

If you’re not familiar with doing business in the Philippines, it may be wise to hire a local partner who can help you navigate the cultural landscape and make introductions to key contacts. A good partner will also be able to help you obtain any permits or licenses required to do business in the country. When choosing a partner, be sure to conduct due diligence and choose someone you can trust. 

4. Remember the country has a hierarchical culture 

It is important to remember that the Philippines has a hierarchical culture. This means that people tend to defer to those in positions of authority, and decisions are often made by those at the top of the hierarchy. For instance, titles are very important, and decisions are often made by those in positions of authority. As a result, it is important to establish a good relationship with your boss or the head of your company before trying to do business in the Philippines. If you can get on their good side, you will be more likely to be successful. 

5. Consider communication style 

It is also important to be aware of communication styles in the Philippines. Filipinos generally have a more relaxed and informal communication style. For example, direct eye contact is considered respectful, and it is important to speak in a clear and direct manner.  

6. Respect the importance of family 

Another important cultural consideration is the importance of family. In the Philippines, family ties are strong and often take precedence over work commitments. As a result, it is not uncommon for employees to take time off to deal with family matters. It is important to be understanding of this and to avoid putting pressure on employees to choose work over family. 

Finally, it is worth doing some research into the legal system before doing business in the Philippines. The country has a complex legal system which can be difficult for foreigners to navigate. It is always advisable to seek professional help when setting up a business or making any major decisions. By following these tips, you can maximize your chances of success when doing business in the Philippines. 

Doing business in the Philippines – Summary

In summary, the business culture in the Philippines is one based on trust, loyalty, and a conservative approach to decision-making that puts a high emphasis on stability and sustainability over short-term gains. The faith of the Filipino people also contributes to this risk-averse dimension, as many view success and failure as ultimately being in God’s hands.  

As evidenced by the Philippines’ commitment to upholding traditional values and the emphasis placed on personal relationships in business, culture is an important factor for success. Companies that prioritize understanding the country’s cultural norms and engaging with local stakeholders can reap long-term rewards from this dynamic market. 

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