Philippine economy has been constantly striving for growth despite the increase of global uncertainties. The World Bank has published an update on the Philippine Economy and highlighted that the private consumption is the main growth driver in the first half of 2019. From the 5.3% of the same period in 2018, it has recovered to 5.8%. The growth observed were driven by moderating inflation, steady remittance inflows, an improving job market, and an increase in economic activity from election-related spending.
If you are residing in the Philippines, then you don’t have to go somewhere to make your dreams a reality. But if in case you are outside the country and skeptical about establishing your business in the Philippines, you might want to consider these nine reasons:
1. Strategic Business Location
Philippines is known as a top tourist country and is located at the heart of Asia. Home to one of the seven wonders of the world, the Philippines is expected to have more tourists coming in from all over the globe. This makes the country as one of the fast-growing regions of the Association of Southeast Nations (ASEAN).
The tourists and even the residents are willing to spend on key commodities and services. With a market of base of hundreds of millions of people, they are good prospects for your business.
2. Developing Infrastructures
With tourism as one of the major factors affecting the economic growth of the Philippines, the Philippine government is committed to building more transportation infrastructures like roads and bridges. Such a project is crucial for transporting the goods from the producers to the consumers.
Aside from transportation, communication is also gaining spotlight from the government. It is also important to give attention to this type of infrastructure as it provides international connectivity 24/7. Countries around the world are slowly shifting towards digital and making transactions through online channels, thus the Philippines also focuses on building up and improving its information and communication technology systems.
Both the transportation and communication infrastructures are significant in making businesses successful considering, as mentioned, that the country is strategically located at the heart of Asia.
3. Growing domestic and export markets
Philippines is the 13th among the countries with the highest population worldwide. It is a country with more than 100 million residents, thus providing a large consumer market that your business can tap into.
It is a tropical country, which means that there are products that can only be produced in the Philippines. These products are exported to markets such as Japan, the United States, Hong Kong, China and Singapore. Philippines is a great gateway to serving the markets outside and the adjacent countries.
With this, the debt-to-gross domestic product (GDP) ratio of the country is going down, from 68.5% in 2005 to 41.9% in 2018. Experts say that this ratio is expected to decrease further in the coming years.
4. Trade-oriented economy
The Philippines allows for a Build-Operate-Transfer (BOT) investment scheme that other Asian countries emulate. According to the Embassy of the Philippines in Netherlands website,
"Government corporations 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 are subject to only 5% overall tax rates. Multinationals looking for regional headquarters are entitled to incentives such as tax exemptions and tax and duty-free importation of specific equipment and materials."
The Philippine Economic Zone Authority (PEZA) is a government agency that can help you establish your business, and at the same time, you can benefit from the tax incentives it offers. All you need to do is to pass its accreditation.
5. Competitive workforce
Philippines possesses quality manpower and resources. It has a young, educated and globally competitive workforce. Filipinos are deemed as highly trainable labor force in Asia, making this as one of the strongest advantages of the country compared to neighboring countries.
It is noteworthy that Philippines is the third largest English-speaking country. The English language is taught in all schools and every year, there are an estimated 350,000 graduates adding to the professional sector of the country. Moreover, the country has the highest literacy rate at 97.95 percent among the Southeast Asian countries. This makes the Philippines above from other countries and attractive to foreign investors.
6. Low cost of living
Philippines provides a wide array of lifestyles that you can choose from. You may choose the lifestyle that you preferred. A lot of people would always reason out the cost of living as a major factor of their decision to stay in the country. They enjoy a new surroundings despite being miles away from their home country.
Starting your business in the Philippines may not cost you much more than you expect. With the low prices on food, amenities, establishments and residential communities, your budget can get you a long way. The country can offer you accessible and affordable luxuries ranging from business centers, housing, schools, hospitals, shopping malls, hotels and restaurants, beach resorts to recreation centers.
7. Hospitable Locals
As an archipelago located in southeast Asia, the Philippines is worldly renowned for its majestic white beaches which has been considered as the country’s top destination for tourists. Locals are also warm and hospitable. You can enjoy the warmth embrace and company of the Filipinos. This is very helpful for someone like you who will be doing business in the country in the sense that it can offer you a happy working place.
8. Tourism friendly
The country is abundant with tourist attractions. With the emergence of technology, unknown and exotic islands and beaches in the Philippines are easily discovered. A lot of tourists are motivated to visit and spend a vacation in the country.
As mentioned above, tourists are willing to pay for the key commodities. Since the country has a low cost of living, it is not difficult for tourists to afford a trip to the Philippines. A total of 3 million tourists have been recorded from the first two quarters of 2017 and the number is expected to go way higher in the years to come. The influx of tourists can be very beneficial for your business.
9. Unlimited Business Opportunities
The ASEAN Free Trade Area (AFTA)’s main objectives are to (1) create a single market and an international production base; (2) attract foreign direct investments; and (3) expand intra-ASEAN trade and investments. This trade bloc agreement by the Association of Southeast Asian Nation (ASEAN), which the Philippines is a part of, supports local trade and manufacturing in all ASEAN countries and facilitate economic integration with regional and international allies.
This agreement paves way to accessing international target markets. This provides more opportunity for your business to be accessible. The consumers of your products or services is no longer limited to the Philippines, but also to the neighboring countries.
The aforementioned reasons are not only limited to independent businesses. Franchising businesses also have an equal opportunity of being brought to the international trading scene. Here is a comprehensive guide for you to aid you in the process of acquiring a franchise business. The Philippines has a promising future in the business industry which can greatly affect its economic performance. Aside from that, you can also provide job opportunities for the Filipinos. It is like hitting two birds with one stone. You are able to help improve the country’s economic performance and help the Filipinos earn a living while you get to enjoy what you are doing, and you are as well earning.
Ultimate Guide to Franchising
Avoiding Scams, Making Smart Investments, and Better Decisions
The franchise industry is booming, and entrepreneurs are wondering about how this sector works. This ebook aims to help aspiring franchisees achieve their business goals.Learn more