In this blog by The Airport Economist Tim visits Manila the big brash bright capital of the Philippines to see what business opportunities can be found in the new pin up economy of South East Asia.
I always like coming to Manila. It’s big, bright and brash and the Filipinas too are a bright bubbly gregarious people and as a business destination it can surprise. It’s probably because The Philippines is such a unique country in South East Asia. It is Roman Catholic, has Spanish and American as well as local (Tagalog) influences. It’s probably also because we know Filipinos wherever we go all over the world or we speak to them on the phone through the vast call centre and business processing industry. More Filipinas live outside the Philippines than at home (a bit like the Irish community) so remittances (money earned by Filipinas working abroad and sent home) is a major part of the Philippines economy.
The Philippines does also have a unique history in the Asia Pacific region too that makes it stand out. The Philippines was settled almost 67,000 years ago but its Asian Pacific location has also been affected by Spanish colonisation from 1565 (after Magellan sighted Samar Island in 1521) until 1898 in Spanish-American war. An early attempt at independence occurred but the US replaced the Spanish as colonists and the Philippines didn’t achieve full independence until after Japanese occupation in World War 2. Independence was followed by a long stretch of military rule by President Fernando Marcos in 1972 with the restoration of democracy in 1986. After some tough years in the 1990s, the new century has been better to the Philippines with the digital age and the rise telecommunications helping the Philippines gain a comparative advantage in call centre and business and professional services. More openness to foreign investment in the resources sector has helped along with great economic integration in the region through ASEAN, APEC and related Asia pacific partnerships. The Philippines strongly emphasises investment in people (human capital) for reasons of both economic development and business attractiveness.
The Philippines economy today is performing well in the Asian Century after the tough years of the 1990s. The GDP of the Philippines is almost US $300 billion making it the 40th largest economy in the world but given its large population of nearly 100 million people, it’s well down the list in terms of GDP per capita coming in at 127th.
Economic Growth is over 6 per cent, inflation under 2 per cent and Unemployment now 6.3 %. The Philippines exports mainly to Japan (22 per cent of total exports), USA (14%) and China (13%) and imports from China (15 %), USA (9%) and Japan (8%). The Asian Century has been good to the Philippines and it has also kept its strong traditional links to the USA.
But is The Philippines reliant on just call centres? Not at all. Many of its business processing centres are moving into highly skilled occupations in IT and business services, The Philippines health care sector is growing at home and abroad and mining and agriculture have been more open to foreign investment as compared to past regimes provided there is a commitment to sustainability.
For many years the Philippines worried about its population, but now with ageing societies in Asia, and more labour mobility due to advances in education, transport and technology, The Philippines is finding its human capital is becoming its greatest asset in the Asian century.
Here are Tim’s Tips for The Philippines
- You can’t get any more gregarious and lively people than in the Philippines. Join an Asian Society chapter (very active in the USA) or the local Business Chamber in your home city.
- The Philippines is predominantly Roman Catholic so be aware of religious icons and customs. It’s an especially fun place to be at Christmas time.
- Watch local regulations and customs and always make sure you know someone in your home embassy if you need help.
- Filipinas love singing and even at the office party someone will get up and sound like they’ve just won a talent quest like ‘the Voice’ or ‘American Idol’.
More articles for you:
- How to do business in China
- The Numbers Game: Where the Bolly Hell are you? Looking at India
- Japan: 60 second business etiquette tip
The Airport Economist TV show on how to do business in Qantas destinations in Asia and around the world is currently being shown on Qantas Domestic and International flights.
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