When it comes to doing business in the Far East, companies tend to focus on China. Hardly surprising given it is home to the world’s largest population, second largest economy and an emerging affluent class.
But there are many other countries in the region with opportunities for business growth which are often overlooked, among them the Philippines.
With a population of around a hundred million and an economy projected to be the fifth largest in Asia and 16th biggest in the world by 2050, its economic potential is huge.
Economics aside, there are various other reasons why you should consider expanding your business into this vibrant and fascinating country.
Strong Western influence
Compared to most other countries in the Far East, the Philippines is heavily Westernised due to centuries of Spanish and American colonialism, although proximity to China, Japan and Indonesia also makes the country a rich cultural smorgasbord.
It regularly ranks high in global surveys for gender equality (it is one of the few Asian countries to have had a female president). And studies have also shown that tolerance of LGBT people is among the highest in Asia. Catholicism, a legacy of Spanish colonialism, is the main religion and is practised by 80% of the population.
The country also shares the US's love of basketball, with boxing, tennis, football, billiards and volleyball also popular sports.
The power of OFWs
Around ten million of the Philippines’ population work overseas (known as Overseas Filipino Workers, or OFWs) in a wide variety of industries, from the medical profession to shipping to domestic work.
Countries as far apart as Australia, China and Saudi Arabia have substantial Filipino populations, with around four million living in the US and 144,000 in the UK. This gives Filipinos a higher level of intercultural awareness than most Asian countries and increases their foreign language competencies.
It’s also a huge boost to the Philippines economy. In 2018, remittances (earnings sent home by OFWs) came to $31 billion – nearly 10% of the country’s GDP.
Unlike most countries in the region, English, though not the national language, is considered an official language for communication and instruction in the Philippines. Most educated Filipinos speak it conversationally, and at cinemas Hollywood movies are rarely subtitled or dubbed.
According to the 2000 census, 52 million people in the Philippines speak English, making it the fifth largest English-speaking nation on Earth behind the US, India, Pakistan, and the UK.
It’s hardly surprising, then, that the Philippines is a favourite location of western businesses who outsource their call centres.
As for the main language in the Philippines, this is Tagalog which uses the Latin alphabet and is heavily infused with Spanish. “Kumusta?”, for example, meaning “How are you?”, derives from the Spanish “Comó estás?”.
Taglish, as the name suggests, is a hybrid language whereby Tagalog words are replaced or spliced with English ones and is discouraged by linguistic purists.
As the Philippines is a country made up of thousands of islands it’s hardly surprising that there are many other native languages (between 120 and 187 languages and dialects) and few are mutually intelligible.
Therefore for any business expanding into the Philippines, the two languages to focus on are Tagalog and English, with a Filipino native translating and localising any written English content to ensure it is relevant, culturally appropriate and adheres to local regulations and legal requirements.
The Philippines' newly industrialised economy has huge growth potential. It has already attracted a number of large multinational corporations looking to reduce costs and take advantage of competitive domestic wages and a highly educated, tech-savvy workforce.
Global companies such as Toyota, HSBC, Proctor and Gamble and IBM have all launched operations in the Philippines due to its strategic location in southeast Asia. And Swedish furniture giant IKEA will open its world’s largest store in Metro Manila, in 2020. The store has even launched a pre-opening website targeted at Filipino customers (albeit in English only) to drum up interest ahead of the launch.
However, there are some drawbacks to doing business in the Philippines.
The World Bank and International Finance Corporation (IFC) rank the Philippines in 138th place (out of 185 economies) for ease of doing business, highlighting the importance of local knowledge.
With a population that embraces new technology and a burgeoning digital economy, e-Commerce is taking off – online shoppers in the country are predicted to reach 53.8m by 2222 – but starting a physical business, rather than an online one, requires patience.
Enforcing a contract takes an average of 842 days (2.3 years) to complete and consists of 37 procedures. Taxation is complicated and registering property can also be costly, as are construction permits.
But we can help
Wolfestone offers Tagalog (Filipino) language translations for legal documents, websites, medical reports and a lot more.
Click here if you want to find out more about the languages we offer.