Investment Prospects for Doing Business in the PhilippinesThinking of doing business in the Philippines? Here are investment prospects for forign capitalists and overseas Filipinos rturning to stay for good.
Investment prospects in the Philippines for business-minded folks continue to exist and evolve in spite of the country's political and socio-economic woes. What are some of these money-making opportunities?
Booming niche markets for potential investors
- Business Process Outsourcing (BPO)
Thanks to the advent of internet communications technology (ICT), BPO capitalists sowed the Philippine business landscape with call/contact centers, medical transcription firms, and computer animation companies. Current BPO enterprises are also involved in software development, human resource management functions, accountancy, online content writing, website development, and graphic designing, among others. Based on a 1985 study by Rene Soriano, university professor Jorge Sibal, in his "Strengthening Offshoring in the Philippines: Issues and Concerns" (2006), notes that the move or establishment of these operations in the country "was to minimize production cost and maximize profits. Salaries in developing countries are 50% to 80% less than in the US."
A recent IBM report featured in a Philippine Daily Inquirer (PDI) article by Cynthia Balana and Lawrence de Guzman reveals that "the Philippines is now the world leader in business support functions", followed by India. Reasons for this achievement include English fluency and cheaper labor cost.
According to PDI columnist Tina Arceo-Dumlao, the Philippines is among the first countries in Asia that adopted franchising as a business strategy. In her April 2010 interview with Yvette Pardo-Orbeta, president of the Philippine Franchising Association (PFA), the country could evolve as the "franchise hub of Asia".
Franchises that offer goods and services to tourists, yuppies working in BPO firms, beauty and health buffs, and techies are projected to have an increased and sustained market share. These include convenience stores, fast food chains, generic drugstores, health spas, beauty parlors, clinics, and Internet cafés.
Pardo-Orbeta identifies that overseas Filipino workers (OFWs), professionals, retirees, and underpaid college graduates compose majority of franchise investors. She advises those intending to pursue this option to research first on the legitimacy of the business to avoid being scammed.
Investment prospects in Philippine Islands
- Medical Tourism and Retirement Villages
Joji Ilagan-Bian, an advocate for the development of Mindanao in southern Philippines, writes: "The aging population, especially in the developed world, presents a huge market as the senior citizens search for wellness services and retirement homes." Collaboration of sectors involved in health and travel services serves as the key in developing the medical tourism and retirement industries in the country.
In January 2010, the decade-long development of a 30-hectare complex into a medical tourism and retirement hub in the Visayas was launched. Felipe Celino discloses that said property will be home to The Health Centrum, the first "hospitel" (merging of "hospital" and "hotel") in the region. It will also have a "nursing and medical training school, housing for medical practitioners, a retirement village, residential subdivision, and commercial establishments."
Among the beneficiaries of these business opportunities then are existing practitioners and future graduates of medicine, nursing, public health, hotel and restaurant management that the country produces each year. Likewise, providers of tourism-related services, hospitals, ICT firms, schools, and skills development and training institutions stand to profit from these industries.
- Independent Film Productions
Having given birth to one of Asia's early film industries, the Philippines has seen the rise in the number of Filipino indie filmmakers who have received recognition from various international and local film festivals and award-giving bodies for the past decade. Digital and less expensive cameras, as well as amateur yet talented actors have contributed in lowering film production costs.
Word-of-mouth and promotion through new media formats have been effective in marketing good independent films. Nevertheless, partnerships between international and local film producers can further boost the Philippine movie industry.
Agencies to assist investorsDepending on the nature of the ownership, business registration is processed at the Department of Trade and Industry (DTI) for sole proprietorship and at the Securities and Exchange Commission (SEC) for corporations. Investors may also consult with representatives of these agencies for further details: the Philippine Board of Investments (BOI), the Philippine Retirement Authority (PRA), the Philippine Economic Zone Authority (PEZA), and the Department of Tourism (DOT).
Making the decision to do business in the PhilippinesBefore pursuing an investment prospect in the Philippines, it is necessary to ascertain one's financial resources and managing ability. Doing business in these islands entails not just money, but knowing one's motivations, the country's diverse cultures, its labor code provisions, and the government's economic policies. Likewise, it is necessary to be aware of the social and political realities that affect the business climate.
Once the decision is made to invest in the Philippines, conduct a feasibility study to determine the potential of the business. For foreign investors, having a Filipino business partner will certainly help deal with the procedures involved in legitimizing the business and marketing it. Learning a major Filipino language, most often Tagalog, can also help build rapport not just with fellow Filipino entrepreneurs, but with potential clients and employees as well.
SourcesArceo-Dumlao, Tina. 2010. "Optimism Returns to Franchising Sector". Philippine Daily Inquirer. April 16. (accessed February 2, 2011)
Balana, Cynthia D. and de Guzman, Lawrence. 2010. "It’s Official: PH Bests India as No. 1 in BPO". Philippine Daily Inquirer. December 4. (accessed February 2, 2011)
Celino, Felipe V. 2010. "Doctor Builds Hospital Cum Hotel in Capiz". Philippine Daily Inquirer. January 2. (accessed February 2, 2011)
Ilagan-Bian, Joji. 2008. "Medical tourism in beautiful Mindanao". Philippine Daily Inquirer. May 29. (accessed February 2, 2011)
Sibal, Jorge V. 2006. Strengthening Offshoring in the Philippines: Issues and Concerns. (accessed February 2, 2011)
Indang Village - The British Village in the Philippines
Century Properties. Investor's Guide to the Philippines.
Dolan, Ronald E. (ed., 1991). Philippines: A Country Study. Washington: GPO for the Library of Congress.
Written by Leann Zarah (firstname.lastname@example.org)
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