Question

In 1000 words, highlight the potential opportunities, risks and challenges of doing business in the Philippines. Issues to consider and/or include:

A. Brief overview of the country and demographics
B. The political and legal environment. political stability? Legal issues?
C. The economic environment. Stability? Growing economy? Hard hit by this recession?
D. Cultural issues.
E. Any other important issues.

Answer 1

Overview of the country and it's demographics :-

The population density of phillipines is high but the distribution is uneven with Manila having highest density of population and Northern Luzon with the lowest density of population . The country's birth rate is significantly higher than the world average due high rate of illegitimate births because of teenage pregnancies , high rate of prostitution, less advancement of sex education , and general tendencies to not support use of contraceptive measures .

More than 30% of the population is under 15 years of age , 60% between 15 to 60 years of age and less than 10% above 60 years of age . About two fifth of the total population lives in rural areas .

Political and legal environment :-

The trade union movement is well established in Philippines . Farmers and tenants are completely organised. Women are well represented in workforce and any discrimination in employment is well protected by its constitution. The Bureau of Labour Relations settles the disputes between labour and management and National Labour Relations Commission hears appeals .

The major source of government revenue is taxation, credits , extraordinary income including the transfer from special funds , income taxes , taxes on domestic good and services and international trade .

The legislation is enacted by the Central government along with delegation of some powers to Local Government.

Economic environment :-

The major portion of Philippines economy is supported by agriculture .It's economy is based on free enterprise and non governmental entities. Agriculture , forestry and fishing forms the major source of income employing nearly one third of the work force . Agriculture alone contributes to one seventh of the GDP.

Phillipines also witneses considerable amount of emigration who are mainly skilled or unskilled labourers and professionals who take temporary overseas assignment in Middle East and South East Asia .

Phillipines is one of the largest producer of Coconut and it's products . It's exports mainly includes coconuts , rice , sugarcane , abaca and corn

Philippines is a growing economy which was affected by recession but survived through it and is under a state of economic revival .

Cultural issues :-

The Philippines has an amusing lifestyle with diverse cultural influences with Spanish , American and South East Asian culture . For a Filipino Amor Propio , Hiya , utang na loob , euphemisms are a part of their culture. These are the sense of social proprietary that instigates the Filipino to conform to Society's standards where Hiya implies shame and utang no loob is debt of gratitude. It must be noted most Filipinos are high context communicators .

Opputunities , risks and challenges of doing business in Phillipines :-

Due to high unemployment rate , cheap labour is the greatest opputunity for Philippines. As the Philippines economy is still developing there are several untapped areas for global investors that could fetch them high rates of return. As it is mainly an agricultural based economy, the availability of raw materials at cheap rates is very easy . Due to high density of population , processed food markets and global fast food brands can earn up-to millions of dollars per year .

The major challenges of working in Phillipines include poor infrastructure. The under investment in its infrastructure creates a disadvantage for global companies to invest there . It has poor transportation and communication system along with stringent laws of construction permits, registry process , protection of minority investors and enforcement of contracts .Corruption and weak banking system is another reason which discourage global companies to invest in Philippines