‘Best time to do business in PH is now’ — Marcos

NEW YORK, USA — President Ferdinand “Bongbong” Marcos Jr. told American investors here that the Philippines is a wise investment choice and that now is the best time to do business with the country.

Marcos said this as he graced the Philippine Economic Briefing in New York City on Thursday morning, September 22 (New York time).

In his speech, the President invited strategic investors in the United States to invest in the Philippines, citing the country’s “economic resurgence” following the Covid-19 pandemic.

How "Hiya" Can Make or Break Your Business in the Philippines

The Philippines is geographically and culturally unique. Its placement between the Pacific and Indian Oceans make it perfect for shipping. This has led to major cultural blending. The Philippines has had its share of influences, including Spanish and American. As a result, the Philippine population is one of the most distinct in the Asia-Pacific region.

Some traits and attitudes of Filipinos share that same complexity. It’s important to understand the value system and communication style when visiting the archipelago nation. Doing so will verse you in the regional culture, and make travel and small business dealings much easier.

It’s important to understand the value system and communication style when visiting the archipelago nation.

The Philippine trait hiya can pose a particular challenge to visitors unaware of the local culture. We want to help broaden the scope of your small business, and international dealings are a sure-fire way to do that. With that in mind, we’re going to help you understand Philippine hiya and how it can make or break your business dealings. Whether you’re looking for a supplier or just taking in the sights, learning about Philippine culture is crucial.

What is Hiya?

In Philippine culture, hiya is generally defined and translated to mean “shyness” or “shame.” Hiya is also related to “pride” and is connected to self-esteem or self-image. It occurs in many instances, such as not being able to pay a bill, provide for one’s family, or being generally unreliable. The feeling is akin to embarrassment, and is avoided at all costs.

Yet, the fear of this form of hiya may be just as important as its actual occurrence. If a person feels slighted, it may be considered a feeling of hiya, even though it’s only perceived. For example, bringing a gift of food to a business lunch or dinner can be viewed as a slight against the host, as if they were unable to provide for their guests. This is also referred to as “losing face,” or losing respectability among peers. This form of hiya may be the most commonly known, and most feared form.

In Philippine culture, hiya is generally defined and translated to mean 'shyness' or 'shame.'

So, what does hiya have to do with small businesses and international trade?

Putting your potential partners into such a situation will greatly affect your success. This will all depend on the situation, but a good method is to avoid anything that may imply your Philippine partner is lesser, unreliable, or unable to perform a task. The above example of giving a gift of food is a great illustration of what we mean.

As well, especially in a business deal, hiya is directly related to pakikisama.

Pakikisama

Don’t worry, this one isn’t as complex as hiya. Pakikisama is the concept of a smooth relationship, and being non-confrontational. It’s important for Philippine business people to conduct a negotiation without conflict, and is related to saving face.

The best advice we can give to avoid conflict in Philippine business is to take things slow.

Generally, Philippine suppliers will do anything they can to avoid saying no. Refusal creates conflict in a negotiation, and causes one or both sides to lose face. This will generally put a halt to further negotiations, even if you get a “yes” out of them. Yes often means “perhaps,” and shouldn’t be taken seriously.

Avoiding conflict altogether is your best bet. Like with hiya, avoid any situation where your Philippine partner refuses an offer or displays excessive emotion. For example, “lowballing” or “highballing” aren’t useful tactics in Philippine business. These methods rely on an initial no and later compromise.

The best advice we can give to avoid conflict in Philippine business is to take things slow. Don’t be overly aggressive when negotiating. Don’t be frank, as you may come off as uncultured and will make people feel uncomfortable. Your best bet is to do what will irk most US small business people – beat around the bush.

Though it might be a culture shock, it’s even more important to avoid conflict with sensitive topics such as Philippine politics, and payment.

Play the game, engage in small talk, and build a relationship with your supplier. Allowing the practices to play out and respecting Philippine values will take you further in your negotiations than overly-forward tactics ever will. Though it might be a culture shock, it’s even more important to avoid conflict with sensitive topics such as Philippine politics, and payment.

(C) by VEEM. * This blog provides general information and discussion about global business payments and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.

Philippines Gets Another Rating Upgrade

By Kathleen A. Martin (The Philippine Star)

 

MANILA, Philippines - The Philippines has been awarded another investment grade rating, this time from Korean firm National Information and Credit Evaluation Ratings Inc. (NICE).

The credit rating raised the country’s long-term, foreign currency rating by a notch to BBB- with a positive outlook, which means further upgrade may be awarded in the short term.

“The rating upgrade reflects improved fiscal profile and growth potential, robust stability in the financial market and the external sector, and the government’s continuing efforts to improve governance and infrastructure,” NICE said in a statement.

The firm stressed that key factors considered for the rating included the strong economic growth of 7.2 percent achieved in 2013 although this is forecast to slow to six percent this year. NICE noted that the deceleration will be on the back of a “normal economic adjustment” as the growth momentum is seen being sustained.

The credit rating agency also pointed out the stability of Philippine financial markets despite global sell-offs of emerging market assets since May last year.

NICE said domestic markets are less vulnerable due to the country’s strong current account position and abundant liquidity levels.

“About the issue of real estate market overheating, which emerges due to the expansion of the construction industry and the rise in real estate prices, NICE expects it is under manageable level until now and the authorities are willing and able to contain it,” the debt watcher said.

NICE further said that the rating will be further supported if the country generates more investments as a result of improvements in its governance and infrastructure.

Rating constraints, meanwhile, include an overheating economy or when asset bubbles are formed especially in the real estate sector, NICE said.

Government officials yesterday said the credit rating upgrade reflects the economic gains the country is enjoying following structural reforms earlier put in place.

“As far as the BSP (Bangko Sentral ng PIlipinas) is concerned, the latest investment grade is another acknowledgement of efforts to maintain an inflation environment and a financial system conducive for business and supportive of sustainable growth,” Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. said.

Finance Secretary Cesar Purisima said “this vote of confidence acknowledges efforts to ensure the country is able to sustain improvements in the economy over the long haul.”

The Philippines enjoys investment grade ratings from the three biggest global debt watchers, Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s.

S&P in May awarded the country a BBB rating, a notch above the minimum investment grade of BBB-, with a stable outlook. Fitch ratings, meanwhile, affirmed the country’s BBB- rating in March with a stable outlook.

Moody’s in October last year gave the country an investment grade rating of Baa3 with a positive outlook.

Maybank injects US$100m into Philippine operations

Maybank also started building in Davao City.
Check out more here:

Maybank injects US$100m into Philippine operations

Aliens Doing Business in The Philippines

Many global readers of this website are expatriates, who have not yet reached the pensioner's age, or simply want to stay in the Philippines and do business here.

So far so good!

Like me, for instance, I didn't reach my retirement age yet, while running some businesses here in the Philippines. An agency (Translation and Documentation Services for the Philippines and Germany - and other countries) - i.e. I am also teaching German at the University of Southeastern Philippines here in Davao City.

Can a foreigner do business in the Philippines?

The Commercial Law of the Philippines (compiled by the AFA editorial staff and chaired by Aguedo F. Agbayani) says it very clearly in its 1994 edition: Chapter III: Authority to do business: NO ALIEN, AND NO FIRM, association, partnership, corporation or any form of business organisation formed, organized, chartered or existing under any laws other than those of the Philippines, or which is not not a Philippine national, or more than 40% of the outstanding capital of which is owned or controlled by aliens, shall do business or engage in any economic  activity in the Philippines or be registered, licensed, or permitted by the Securities and Exchange Commission or by any other bureau, office, agency, political subdivision ... of the government to do business ... without first securing a written certificate from the Board of investments to the effect:

1. That the operation or activity of such alien ... is not inconsistent with the investment priorities plans;

2. That such business ... will contribute to the sound and abalanced development of the national economy ... ;

3. That such business ... by the applicant would not conflict with the Constitution or other laws of the Philippines;

4. That the field of business ... by the applicant is not one that is being adequately exploited by Philippine nationals; and

5. That the entry of application therein will not pose a clear and present danger of promoting monopolies ... in restrain of trade.

Chapter II, Art. 59 says also very clearly, that an alien (a foreigner) has to check at first his immigration status. Of course, a tourist is never allowed to do any business in the Philippines.

Fact is: I am an expatriate with a 'permanent residence stay' in the Philippines as well as my wife, a natural born Filipina, but carrying a German passport the past 20 years. We can do business in the Philippines - but here we are: the permit has been issued to my brother-in-law, a Philippine national.

Don't misinterpret me, please: I am not talking about foreign corporation i.e. For the purpose of this code, a foreign corporation is formed, organized or existing under laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or state. Philippine law also sets the guidelines for investment requirements for foreign corporations under section 126 of the Philippine Corporation Code.

I am not a lawyer, but I came in touch with Philippine law during my time as coordinating editor of law magazines of a publish house based in Berlin and New York. Now I am working together with lawyers here in the Philippines. So please, ask YOUR lawyer, before you start any kind of business.

Very personal: many expatriates have been asking me (mostly by emails) during the last years: "Can your morals allow you to do that?" My answer is clear again: "Yes, why not? I can!" The problem is only, if you can't trust your Philippine spouse and/or her/his family. This seems to become a very big problem sometimes. Fortunately not for me... .