Can you make money in the Philippines?
Still celebrating hitting 1 Million views on Youtube, I will zero in on the question I gets asked the most: “Can you make money in the Philippines?” Check out the video below for the answer!
***ALSO: We want to hear from YOU! What kind of business do YOU want to do here in the Philippines? Go to the comments section and leave us your questions, ideas, concerns and we will answer them.
The Economy
The Economy of the Philippines is the world’s 34th largest economy by nominal GDP according to the 2017 estimate of the International Monetary Fund’s statistics, it is the 13th largest economy in Asia, and the 3rd largest economy in the ASEAN after Indonesia and Thailand.
The Philippines is one of the emerging markets and is the sixth richest in Southeast Asia by GDP per capita values, after the regional countries of Singapore, Brunei, Malaysia, Thailand, and Indonesia.
The Philippines is primarily considered a newly industrialized country, which has an economy in transition from one based on agriculture to one based more on services and manufacturing. As of 2017, GDP by purchasing power parity was estimated to be at $1.980 trillion.
Primary exports include semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, and fruits. Major trading partners include Japan, China, the United States, Singapore, South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and Thailand.
Tiger Cub Economies
The Philippines has been named as one of the Tiger Cub Economies together with Indonesia, and Thailand. It is currently one of Asia’s fastest-growing economies. However, major problems remain, mainly having to do with alleviating the wide income and growth disparities between the country’s different regions and socioeconomic classes, reducing corruption, and investing in the infrastructure necessary to ensure future growth.
The Philippine economy is projected to be the 5th largest in Asia and 16th biggest in the world by 2050. According to the PricewaterhouseCoopers, it estimates that it will be the 12th to 14th richest economy in the world by 2060.
While this opposes other reports from HSBC Holdings PLC, that by the year 2050, the Philippines will have been stated to surpass the economy of Indonesia due to its yearly higher GDP growth rate of 6.5% (Second, after China). However, economic statistics may still vary depending on the performance of the government every year.
The Philippine economy has been growing steadily over the decades and the International Monetary Fund in 2014 reported it as the 39th largest economy in the world. However its growth has been behind that of many of its Asian neighbors, the so-called Asian Tigers, and it is not a part of the Group of 20 nations. Instead, it is grouped in a second-tier for emerging markets or newly industrialized countries. Depending on the analyst, this second-tier can go by the name the Next Eleven or the Tiger Cub Economies.
In the years 2012 and 2013, the Philippines posted high GDP growth rates, reaching 6.8% in 2012 and 7.2% in 2013, the highest GDP growth rates in Asia for the first two quarters of 2013, followed by China and Indonesia.
Business in the Philippines
In 2008, the Philippines has surpassed India as the world leader in business process outsourcing. The majority of the top ten BPO firms of the United States operate in the Philippines. The industry generated 100,000 jobs, and total revenues were placed at $960 million for 2005. In 2012, BPO sector employment ballooned to over 700,000 people and is contributing to a growing middle class.
BPO facilities are located mainly in Metro Manila and Cebu City although other regional areas such as Baguio, Bacolod, Cagayan de Oro, Clark Freeport Zone, Dagupan, Davao City, Dumaguete, Lipa, Iloilo City, and Naga City, Camarines Sur are now being promoted and developed for BPO operations.
Call centers began in the Philippines as plain providers of email response and managing services and is now a major source of employment. Call center services include customer relations, ranging from travel services, technical support, education, customer care, financial services, online business to customer support, and online business-to-business support.
BPO in the Philippines
Business process outsourcing (BPO) is regarded as one of the fastest-growing industries in the world. The Philippines is also considered as a location of choice due to its many outsourcing benefits such as less expensive operational and labor costs, high proficiency in spoken English of a significant number of its people, and a highly educated labor pool.
In 2011, the business process outsourcing industry in the Philippines generated 700 thousand jobs, and some US$11 billion in revenue, 24 percent higher than in 2010. By 2016, the industry is projected to reach US$27.4 billion in revenue with employment generation to almost double at 1.3 million workers.
BPOs and the call center industry, in general, are also credited for the Philippines’ recent economic growth resulting in investment status upgrades from credit rating agencies such as Fitch and S&P.
With the Philippines being the 34th largest economy in the world, the country continues to be a promising prospect for the BPO Industry. Just in August 2014, the Philippines hit an all-time high for employment in the BPO industry. From 101,000 workers in 2004, the labor force in the industry has grown to over 930,000 in just the first quarter of 2014.
Career in BPO
Growth in the BPO industry continues to show significant improvements with an average annual expansion rate of 20%. Figures have shown that from $1.3 Billion in 2004, export revenues from the BPO sector has increased to over $13.1 Billion in 2013. The IT and Business Process Association of the Philippines (IBPAP) also projects that the sector will have an expected total revenue of $25 Billion in 2016.
This growth in the industry is further promoted by the Philippine government. The industry is highlighted by the Philippines Development Plan as among the 10 high potential and priority development areas. To further entice investors, government programs include different incentives such as tax holidays, tax exemptions, and simplified export and import procedures. Additionally, training is also available for BPO applicant.
Small Business
Whether you are looking for small business opportunities in the Philippines as an investor, manager, or just looking for something fun to build and grow during your retirement; the Philippines has a gigantic amount of small business opportunities for those who are prepared, and have a bit of common sense when it comes to doing business in a developing country.
There are a zillion ways to do business here in the Philippines, but you have to be smart, tough, resilient and you gotta want to have fun! So send us your questions and we’ll flesh out the best ways to make it here in this beautiful and exciting country.
Cheers!
Sean
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