Business In The Philippines: Is It Easy To Start One Up In The Philippines?

How many times have I thought about putting up a business in the Philippines again to support my cost of living there in my retirement?

I can’t remember now. I even attempted a few times already in the past, but none of them prospered, even only to recoup my monetary investment.

Why have I thought of writing about starting a business in the Philippines and write about it, then?

Three things:

1) Summer is almost over and I’m starting to think of going back to the homeland again to escape winter,

2) A customer-friend chatted about it with me in one of our summer out-of-towns,

3) My colleague Dave wrote a very interesting post about it lately.

I am no stranger in running a business – whether in the Philippines or in Canada. Fact is, I never wanted myself working for someone else the rest of my life. And this is also what I instill in the minds of my children. Way different from what my father used tell me – find a well paying, good company to stay and retire in.

I am happy that I followed my gut about what I want for the future — that is to be my own boss. I always believed that it is the way to personal and financial freedom. It never was an an easy path but it’s all worth it.

When preparing for retirement or long-stay living in the Philippines, I believe that having our own business is also the way to enjoy being there. And that is what I’m preparing and still researching for up to now.

BUT… it should not be a business that caters to the locals in the Philippines. Because, believe it or not, we have failed to make our service offerings appeal to Filipino locals when we made our attempts.

Maybe it’s just us, but it seems Philippine-based locals cannot afford our products or services. Or even if our offer is something that they can already afford, they will always look for someone else who can give them the same service or product the cheapest possible.

I’ll give you an example, and this is a true story:

In our home based travel agency business, we have been offering airline tickets to first time immigrants, contract workers or tourist from the Philippines going to Canada or even the US, through our partner travel agency in Manila. We have been successfully selling this service to Filipinos here in Canada who have family in the Philippines and are coming to Canada as mentioned above. The relatives in Canada are the ones paying for the airfare.

But, if the passenger is coming from the Philippines and makes the payment there – we never made a single sale thru the years. Inquiries, yes, but never a sale.

Do not think that we could not match the offer of the local travel agents in Manila because where they get their tickets is also where we get ours. What I think the difference is, local travel travel agencies in Manila are willing to absorb a very small profit. To the local businesses, a $5 profit per sale is enough, but to us operating in Canada – is not. So, it would be business harakiri to compete with local Philippine travel agencies on our part.

Another concern of doing business in the Philippines is the red tape to satisfy the requirements of even the local municipality. I’ve had a very bad experience with the City of Balanga regarding registering my business there just because the owner of the address I’m renting has tax arrears with the city. Balanga City Hall wouldn’t want to approve my application because of that. Why the heck is the tax arrear of my landlord my problem?

Because I’m beginning to like the city and also because I am spending my residence in Balanga when I’m in the Philippines, I wanted Balanga to benefit from our business. But it seems like they don’t need our money. Suits me.

Still another problem I’ve encountered is finding the people to hire. It seems like all the good candidates are located in Manila and wouldn’t want to relocate even if the cost of living in Manila is very high. That, I could not understand. I don’t know what’s appealing in Metro-Manila that makes people want to live there.

Those are just some of the irks I have to go through when I tried setting up a business again in the Philippines. Or, again, maybe it’s just me. Some others may have been successful. I don’t know.

So, now, I don’t think much about starting a business in the Philippines again. I would rather have a business that caters to clients in Canada or the US, have an office in Canada, but could be run in the Philippines or anywhere in the world, rather than going through the hassles of setting-up office in the Philippines again.

Maybe others have a different experience than me and I would like to hear a different story, if only to change my thinking — so any comment is highly welcome.

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2 thoughts on “Business In The Philippines: Is It Easy To Start One Up In The Philippines?

  1. Very interesting article, Manuel. Your findings parallel mine in a great many ways. I thought many of my negative experiences were due to being a brash, noisy, inexperienced foreigner but after six years here in the Philippines I can see how many native Filipinos run into the exact same issues.

    The problem with a business license because the building owner doesn’t pay the taxes is so common and often incomprehensible to those outside the Philippines.

    Each little ‘functionary’ in city government has absolute power to deny applications going forward, and _boy_ do they like to use that power, just to show they have it.

    The idea of a new business helping the economy of the city is something very foreign to many here in the Philippines. Jealousy, envey and the ‘crab mentality’ are all too common, particularly toward business owned by foreigners or “Balikbayan Filipinos”.

    I’ve often heard Filipinos expressing the opinion that since Migrant Filipinos “escaped to the West”, they should stay there and not come back to lord themselves over us ‘real Filipinos’ who stayed here in the home country.

    Illogical? Yep. Reality of life and business in the Philippines? Yes, again.

  2. Hey Dave,

    Truth is, I get flashbacks of what has happened to me whenever I read a lot of your posts about business in the Philippines.

    I think what those people looking to live in the Philippines should pursue is to develop a portable kind of business, like what you espouse in a lot of your posts.

    If successful, like some are, it will not only benefit you while living in the Philippines but also if you so decide to live some other nation on earth.

    Manuel

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