Doing Business in Philippines

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With a multicultural and ethnically diverse population influenced by American, Spanish, Malay and Chinese traditions,
the Philippines offers a vibrant and dynamic business environment.

Expats doing business in the Philippines will be operating in one of the
largest markets in Southeast Asia; the country enjoys positive economic growth and has a highly skilled and
educated work force. Its strategic location has made the Philippines a potential gateway for investors into the wider
Asian region, and many multinational companies have offices there. Makati City, which forms part of Metro Manila, is
the financial and business centre of the Philippines, and where most local and international organisations have their
Filipino headquarters. The city also hosts numerous international embassies and therefore forms the diplomatic
centre of the Philippines.

The main industries in the Philippines include electronic components and machinery, food and drink, clothing,
footwear, tobacco, petroleum products, and metals and minerals. Business outsourcing services, such as call
centres, are also a booming sector.

Expats will find that the Philippines is not always an easy place to do business, as reflected in the countrys ranking in
the World Banks Ease of Doing Business survey for 2012, where it came 130th out of 185 countries surveyed. Areas
in which the country scored particularly poorly included starting a business (161st), resolving solvency (165th) and
paying taxes (143rd).

Business culture in the Philippines

The Filipino business culture is a confluence of East and West. Although geographically part of Southeast Asia, the
country has strong European and American ties, which extend not only into everyday social interactions, but also into
the countrys business culture. Filipino and English are the two main languages of business in the country, and
although many business practices may be Westernised, Eastern traditions and cultural norms still play a central role.

Family is important in Filipino culture and many businesses are still family owned, with a number of family members
often working for the same company. Business relationships therefore equate to personal relationships and its
important to network and build close interpersonal relationships with Filipino counterparts. Business structures in the
Philippines are hierarchical and decisions are mostly made by the top-level executives. However, the groups input is
very important and its possible that initial negotiations and agreements may be concluded without even meeting the
actual decision makers.

Filipinos are known for their friendliness and hospitality. This extends to the business environment. Filipinos place
great emphasis on polite language and gentle conversation. When speaking, ones tone should remain neutral and
direct questions should be avoided. Business is best dealt with face to face. Only once polite conversation has been
concluded should one begin to negotiate on the business front. Filipinos enjoy conversation about their friends and
family, but topics such as politics, religion and corruption should be avoided.

Business communications can often be indirect, and expats should be aware of this to avoid miscommunications. A
yes may not necessarily mean an agreement has been made. Moreover, physical gestures and their meanings are
important. Filipinos often use their eyes, lips and hands to convey a wide range of messages. Raised eyebrows and a
smile indicate a silent hello or a yes in answer to a question. Fixed eye contact between men is considered an
aggressive gesture. The proper method to summon somebody is with a downward wave.

To Filipinos, the concept of saving face and maintaining self-esteem is important. Self-esteem should be preserved,
and one should never criticise or argue with a Filipino associate publically. Public displays of anger, trying to prove
someone wrong in front of others, or disrespect of ones rank or position can cause loss of face. When in an
embarrassing situation, the Filipino may generally laugh or try to change the subject to hide the awkwardness. Do not
be surprised if Filipino colleagues or friends ask very personal questions such as your age, your salary, or how much
something cost you to buy, or make frank comments regarding your weight and appearance. Such questions come
from pure curiosity and the comments are generally meant in a light-hearted manner. Expats should not be offended.

Doing business in the Philippines: Fast facts

Business dress: Business dress in the Philippines is formal. Men usually wear suits or formal office apparel. Some
men wear the traditional barong tagalog, a lightweight, long-sleeved shirt worn without a tie. Light suits and dresses
are acceptable for women. Filipinos usually dress for the weather. Since it is a tropical country, light and loose
clothing materials are advised during the hot summer months.

Hours of business: Business hours are usually from 8am to 5pm, with a one-hour lunch break. Offices are generally
closed on weekends, which fall on a Saturday and Sunday.

Language of business: Filipino and English are the two languages of business in the Philippines. Spanish is also
spoken by many Filipinos, along with Arabic and Chinese.

Greeting: A handshake and a smile are the usual form of greeting. One should always greet the eldest or most
senior person first.

Gifts: Gift giving is widely practiced in Filipino business culture, and is especially popular once a contract has been
signed. Gifts should not be overly extravagant; popular gifts include flowers, sweets, perfume and spirits.

Gender equality: Women are treated equally in the Philippines and there are many successful women in Filipino
business circles.

Dos and donts of business in the Philippines

DO always treat your Indonesian associates with respect and avoid offending anyone in public or during meetings.
DONT be surprised if your Filipino counterparts ask personal questions. These should be answered politely.
DO remember that Filipino business culture is personal, so personal relationships should be nurtured and respected.
DO consider giving a gift to your Filipino associates once a contract has been concluded. Gift giving is a popular
practice in Filipino business culture.
DONT make direct eye contact. It is considered rude to stare.
DONT wag your finger at someone or curl your finger to summon someone as these gestures are considered rude.