21-B Rufino Pacific Tower, 6784
Ayala Avenue cor. Rufino St.,
Makati, Metro-Manila, Philippines
Philippines Business Culture & Workforce
Business matters in the Philippines are always best dealt with on a face-to-face basis in a warm and pleasant atmosphere. While many Western businesspersons thinks that time is gold and want to get to the point immediately, Filipinos like to be indirect, talk about mutual friends, family commonalities. Only after establishing a cordial atmosphere will people negotiate. No matter what the final result, the discussions should always end cheerfully. To a Filipino, cultivating a friend, establishing a valuable contact and developing personal rapport are what make business wheels turn. The Filipino way of doing business is an infusion of the East and West.
When setting up appointments in the Philippines, especially in government offices, it is most advantageous if a "go-between" or someone with previous connections to that office can make some form of introduction on behalf of the requesting party. Mid-morning or afternoon meetings are preferred, and a follow up call to confirm the meeting a day before is recommended in the Philippines.
After the requisite small talk following the introductions, typical business meetings then focus mainly on the agenda at hand. Specific conclusions are not necessarily achieved during the initial meeting, but Filipinos are usually amenable to follow up discussions or negotiations. A formal agreement or contract may take a longer time finalize compared to what Westerners are accustomed to.
Moreover, as in most Asian cultures, Filipinos prefer to avoid "loss of face" or public humiliation. Therefore, Filipino contacts appreciate an atmosphere of calm and restraint, avoid direct confrontation, and typically offer a polite reply coupled with a smile versus outright negative feedback of the other party's ideas. A "yes" may mean a lot of things, therefore one should be aware of the subtleties of a particular conversation in the Philippines.
Philippine business has its own etiquette. For example, as a show of respect, Filipinos usually address people by their titles (e.g., Architect Cruz, Attorney Jose, Dr. Romero) although the professional might request a more informal approach (e.g., addressing them by their nicknames) after the formal introduction.
When dealing with high-ranking Philippine government and military officials in the Philippines, it is best to address them by their formal titles (e.g., Secretary Flores, General Alfonso, Director Santos, Admiral Lopez, etc.)
Handing out business cards (preferably bearing your position or title) is standard procedure in the Philippines, although the manner in which the cards are exchanged tend to be rather informal as compared with other cultures. If a Filipino contact gives you a personal number (e.g., home or mobile) aside from what is indicated on the business card, it is usually an invitation to call, and is a good sign for establishing cordial relations. The U.S. businessperson traveling in the Philippines should avoid, as much as possible, personally grappling with the bureaucracy in the Philippines. Customs, for instance, requires many signatures to clear air cargo. The Filipino approach to the problem is to use staff capable of moving through the bureaucracy. Whether getting a driver's license or registering a car, the U.S. business executive will benefit by delegating the chore to a someone able to negotiate through a sea of desks, with a smile and a knack for delivering token gifts or keepsakes.
Observing office etiquette in the
Philippines is also important. When reprimanding employees, take
them aside and do it privately. Be as gentle as possible and always
make it a point to end the meeting with some show of personal
concern for his family to make him feel he is still part of the
team and that the criticism is not personal. Again, this is
consistent with avoiding "loss of face" in Filipino culture.
The person who invites customarily pays. A guest does not order the most expensive items on the menu, unless the host insists otherwise. It is also customary to have a drink before sitting at a dining table.
A pleasant atmosphere and a minimum of
formality is the tone. Business is not usually discussed until
after establishing a convivial ambiance, usually after soup or
appetizer. Dress is according to venue.
Philippines Business Climate
An open economy allows 100% foreign ownership in almost all sectors and supports a Build-Operate-Transfer (BOT) investment scheme that other Asian countries emulate. Government corporations in the Philippines are being privatized and the banking, insurance, shipping telecommunications and power industries have been deregulated. Incentive packages include the corporate income tax, reduced to a current 32%, with companies in the Special Economic Zones (PEZA) are subject to only 5% overall tax rates in the Philippines.
Multinationals looking for regional headquarters in the Philippines are entitled to incentives such as tax exemptions and tax and duty-free importation of specific equipment and materials.
Philippines Labor & Workforce
The Filipino workforce is one of the most compelling advantages the Philippines has over any other Asian country. With higher education priority, the literacy rate in the country is 94.6% - among the highest.
English is taught in all schools, making the Philippines the world's third largest English-speaking country. Every year, there are some 350,000 graduates enriching the professional pool.
Contact Kittelson & Carpo Consulting