ONLINE FREELANCING IN THE PHILIPPINES

A Case Study

Presented to the Faculty of the

Expanded Tertiary Education Equivalency and accreditation Program

Capitol University

Cagayan de Oro City

In partial fulfilment of the requirements for the degree of

Bachelor of Science in Business Administration

Major in Human Resource Development and Management

MARVIN M. MEDIANTE

January 2019
 ACKNOWLEDGEMENT

This journey would not have been possible without the support of my

family, professors and mentors, and friends. To my family, thank you for

encouraging me in all of my pursuits and inspiring me to follow my dreams. I am

especially grateful to my parents, who supported me emotionally and financially. I

always knew that you believed in me and wanted the best for me. Thank you for

teaching me that my job in life was to learn, to be happy, and to know and

understand myself; only then could I know and understand others.

I would like to express my deep gratitude to all the course educators, my

research supervisors, and evaluators, for their patient guidance, enthusiastic

encouragement and useful critiques of this research work. I would also like to

thank Prof. Clifford Jose Garrido Roa for his advice and assistance in keeping my

progress on schedule. My grateful thanks are also extended to Dr. Aldrich

Palarca who have been supportive of me all throughout since from the start of

this course.

And above all to our Heavenly Father for His unconditional love and

blessings. And also, for giving me this opportunity to meet those mentioned

people who were really generous and helpful, and to finally create this paper.
 Glossary Of Terms

Freelancer/ freelance worker - a term commonly used for a person who is self-

employed and is not necessarily committed to a particular employer long-term.

Online freelancing is more or less the same with the addition that you offer your

service and look for customers basically online. This also means that now you

can offer your service worldwide.

Professional - A professional is a member of a profession or any person who

earns their living from a specified professional activity. The term also describes

the standards of education and training that prepare members of the profession

with the particular knowledge and skills necessary to perform their specific role

within that profession.

BPO- Business process outsourcing (BPO) is a subset of outsourcing that

involves the contracting of the operations and responsibilities of a specific

business process to a third-party service provider. Originally, this was associated

with manufacturing firms, such as Coca-Cola that outsourced large segments of

its supply chain.

Upwork.com- Upwork, formerly Elance-oDesk, is a global freelancing platform

where businesses and independent professionals connect and collaborate

remotely. In 2015, Elance-oDesk was rebranded as Upwork. It is based in

Mountain View and San Francisco, California. The full name is Upwork Global

Inc.
Table of Contents

Title page..…….………………………………………………...........................……..1

Acknowledgment……………………………………………………...........…………..2

Glossary of Terms..................................................................................................3

Table of Contents……………………………………………………............…………4

Introduction…………………………………………....…………...........………………5

Rationale of the Study…………………………………………...........……………….6

The Situation…………………………...………………….……………...........……….7

Statement of the problem…………………………………………………...........……8

Objectives……………………………………………………………………...........…..8

Areas of consideration………………………………………………………...........….9

How to Apply for Government Permits and Other Paperwork………...................12

Office Options for Freelancers.............................................................................14

Advantages of being a Filipino freelancer ………….........................................…14

Recommendations...............................................................................................20

Conclusions.........................................................................................................21
INTRODUCTION

Many see freelancing as a sideline gig which employees with regular 9 am

to 5 pm jobs do in order to supplement their income. While it still holds true in

many cases, freelancing is also gradually changing.

A freelancer is a person who sells work or service without any regular

salary, because he or she is as an “independent” contractor. Some do

freelancing full-time, others part-time, that is, to augment income one gets from a

regular paid job. A few register as consultants of a professional association that

offers the services of these consultants to a bigger market.

The flexible time, the opportunity to work wherever you want, having more

time for the family, and the personal satisfaction the industry is offering are just

some of the reasons why the workforce has that growing portion of freelancers,

portion that prefers being a freelancer full-time rather than a 9 am to 5 pm

employee.
Rationale of the Study

This study is believed to be useful to Government institutions, such as

Department of Information and Communications Technology, Department of

Labor and Employment, Bureau of Internal Revenue (BIR), employers (small-

sized, big-sized corporations), professionals and future professionals from the

Philippines by providing necessary information about online freelancing in the

Philippines and the pros and cons that come along with choosing to be an online

freelancer.

According to the recent Philippine Impact Sourcing Conference or

PISCON 2018 spearheaded by the Department of Information and

Communications Technology, we have over 1.5 million online freelancers in the

Philippines. If each freelancer were earning, let’s say, around five thousand

pesos per month, then we’re talking about several billions of pesos circulating in

the economy per month.

According to Kimberly Tabuga, in a study done for the UP School of Labor

and Industrial Relations, the Philippines is No. 3 in the world, after the United

States and India, in online freelancing. Tabuga gave 1.5 million as the estimated

number of Filipino online freelancers based on a study by one global researcher.

In comparison, the United States had 57.3 million freelancers in 2017.

Accordingly, the majority of the American workers would be doing freelancing by

2027.
The Situation

Online freelancing in the Philippines has been booming in the past few

years and it’s not hard to understand why. Make no mistake, the Philippines has

a big pool of world-class talent. The Internet has also opened up many freelance

opportunities, such as Web designing, copy editing and writing, providing

customer service, doing e-marketing, consulting, engineering and architecture,

data analytics, accounting, IT networking and so on. The above estimate for the

Philippines is huge because the researcher apparently included a big number of

those working in the call center/BPO sector, which, officially, has generated a

million jobs. However, the 2016 registry of Upwork, America’s leading agency

matching freelancers and clients online, had listed over 300,000 Filipino

freelancers.

It is mentioned (Tabuga) that OnlineJobs.ph, the Philippine version of

Upwork, has now 250,000 members. As a result, thousands of young

professionals turn to freelancing and make their services available to the

international clientele. The only problem is the lack of good opportunities that will

fully utilize or fairly compensate them. Filipino jobseekers are also required to

fight tooth and nail for competitive positions despite the fact that they could end

up being underpaid and overworked.

Statement of the problem:

This study seeks to answer the following questions:

1. What is the present status of online freelancing in the Philippines?

2. How can online freelancing help the Philippines professionals?

3. How can an individual prepare to become a full-time online

freelancer in the Philippines?

4. What are the legal implications of working as an online freelancer in

the Philippines?

5. How to value and protect yourself as a professional online

freelancer?

Objectives

This study is conducted:

1. To identify the present situation of online freelancing in the

Philippines

2. To identify opportunities for professionals in freelancing

3. To provide solutions for becoming an inline freelancer in the

Philippines
AREAS OF CONSIDERATION

The young and digitally adept Philippine freelance market encompasses

around 2% of the population and is expected to grow further, according to a new

study by PayPal. It also noted that the Philippines has one of the highest

freelancers per capita of the 22 countries surveyed, at around 2% of the

population. This means that the country has an estimated 1.5 million freelancers,

with women having the slight edge at around 65% of that figure. The main gigs

are data entry/internet research at 34% of those surveyed, virtual assistance at

13%, and customer service at 8%.

So how one can become an online freelance

Starting your career as a freelance professional can be as simple as

getting your own laptop and attracting clients. But, once the question of invoicing,

coordinating schedules, and meeting deadlines start pouring in, you need to be

adequately prepared to avoid undue delays or work disruptions.

Have your tools ready before you start working with clients. It will help you

focus on the actual task of working instead of juggling all the paperwork

requiredfrom the get-go.

How to Apply for Government Permits and Other Paperwork

Being an independent freelancer does not exclude you from performing

your duties as a law-abiding citizen. Just like regular employees, you need to pay

your taxes, register your business, and file your returns.As a self-employed

business owner, otherwise known as a sole proprietor, you also need to issue

invoices, maintain a book of accounts, and other responsibilities. Unlike an

employee, though, you’ll need to do these tasks yourself in the absence of an HR

department to do it on your behalf.

Office Options for Freelancers

Flexibility is one of the perks of freelancing, and this extends not just to

your work hours, but to your place of work as well. You can set up an office at

home, go to your favorite cafe with your laptop, or find a coworking space nearby

to start working. All you need is a reliable Wi-Fi and your laptop to get started.

Advantages of being a Filipino freelancer

 Flexibility

Online freelancing allows professionals to create their own working schedule.

Most of these freelancers enjoy the privilege of working at home unsupervised.

This is a big deal for Filipinos given the burgeoning traffic problems in urban

locations where most of the white-collar jobs are.

 According to a global evaluation done by Waze, Metro Manila—the capital

city of the Philippines—has the worst traffic in the world. Home-based

freelancers, on the other hand, are safe from the everyday stresses of

commuting.

In addition to their choice of workplace, a lot of freelancers also have full

control of their time. This gives them the flexibility to take on multiple projects or

maintain a full-time job as they do freelance work on the side. Work-at-home

parents, in particular, enjoy this privilege since they can spend more time with

their family.

Interestingly, some foreign employers may encounter more stay-at-home

Filipino moms in freelancing marketplaces. By freelancing, these women can

balance home life while providing financial support for their families. Research
conducted by Fast Company states that 53% of all full-time freelancers are

women.

 English Fluency

Being one of the “best English speaking countries in Asia”, it’s no surprise

that content writing and customer service are some of the most active freelancing

avenues for Filipinos. Today, some of the high-demand industries for Filipino

freelancers include content writing, technical support, customer service, data

entry, and translation. There is a growing demand for home-based English tutors

in the country as well.

According to data cited on TechInAsia, the top three skills being listed by

Filipino freelancers include data entry (30.89%), Excel (13.89%), and copy typing

(11.77%).

English fluency also means better communication with the international

clientele, which is one of the reasons why Filipinos can stand out from the global

pool of talent. Being competent in English also encourages more Filipinos to

seek online work, which is why the Philippines is ranked 5th in the international

rankings based on the growing number of accounts in Freelancer.com.

 Bigger Earnings

Freelancers based in the US or Western Europe may have income just as

high as full-time employees—if not higher. That’s part of the reason why many

foreign companies opt to work with Filipino freelancers, who are still capable of

delivering competitive work at mother-tongue level. Despite being paid less than

a US or UK-based freelancer, Filipino freelancers can still earn significantly more

income than the average Filipino hired employee can.

For example, over 20% of Filipino freelance writers are getting paid $11-$15

per 500-word article. That means they can earn roughly Php 30,000 per month

for a workload of 10 articles in a 5-day workweek.

A programmer from Cavite earned P7.5 million in 2013, or a whopping

average of P20,547 a day, while a writer from Gingoog City, Misamis Oriental

earned P2.6 million last year.

How did they did do it? The programmer and writer are just two of the one

million Filipinos who found work on Elance and oDesk, now Upwork.

According to the 2015 Freelancer Income Survey conducted by Payoneer, the

field of IT & programming has the highest level of income satisfaction for

freelancers. Despite this fact, the field of freelance writing is more prevalent due

to lower barriers to entry. Incidentally, freelance writers have one of the lowest
income satisfaction level. On the flip side, they are usually required to work less

hours than fields such as programming, graphic design, engineering, and

consulting.

 Increasing Demand

Aside from flexibility, the increasing demand for freelancers is one of the key

advantages of the industry. Some of the main reasons behind this include

corporate downsizing, the rise of startups, and the growth of platforms that

connect enterprises with independent contractors.

“The Philippines can become a hiring country soon, with its ‘working hard’

culture that easily attracts employers around the world,” says Elyssa Christine

Lopez of Entrepreneur Philippines.

 The Role of Freelancing Platforms

Of course, finding work as a freelancer is not necessarily easy, though it is

less tedious than finding “real” work from a local employer. Thanks to freelancing

platforms like PeoplePerHour, Upwork and Fiverr, it is easier for professionals to

tap into the demand for their skills. Whether you’re looking for content writing or

graphic design jobs, all you need to do is create an account and look for job

openings based on keywords.46% of freelancers work through online

marketplaces like those mentioned above. As of last year, there are more than

1.4 million Filipinos registered at Upwork alone. Freelancer.com, another

freelancing platform, clocks in with over 730,000 Filipino professionals.

 In comparison, 28% of freelancers work with clients through direct means

(email, phone, in-house, etc.) while 15% are recruited via professional

networking sites like LinkedIn.

Many Filipinos also rely on local websites like Raket.ph to find short-term

freelancing gigs. One advantage of this route is that freelancers can get to know

their clients on a personal level.

Recommendations

Being a freelancer is not just about the chance to work from home in your

jammies, scouting for the best coworking spaces, or holing up in your

neighborhood “coffice” with the fastest Wi-Fi. It’s a lot like owning a small

business, and as such, you need to treat it like a one-person company with only

you running the show.

Since freelancing in the Philippines is a business, and you do not have an

employer to settle your taxes anymore, be responsible enough to settle your

obligations. Aside from this, pay your monthly contribution to your health

insurance and social security services.

One mistake a freelancer usually commits is that he tends to sell his

services at the lowest rate, thinking he will lose clients if he insists on higher

ones. According to an article published by Rappler, you need to know how much

your services are worth, so the client knows the current rates in the industry. This

will do a lot for the future of freelancing as other freelancers will be affected by

low rates too.

Conclusions

With a world that grows more and more connected every day, freelancing

continues to be a flourishing industry in the Philippines. Aside from honing your

skills, you also need to leverage the right tools and seek the best opportunities to

succeed as a freelancer. Below, a snoop into Upwork’s customers that have put

as a filter “Filipino” in December 2018:

So yes, online freelancers from the Philippines are wanted and very much

appreciated.

Their talents are what keep their business going!