Economic Perspective of Doing Business in the Philippines

Are you planning to set up shop in the Philippines? If yes, you’ve made a strategic choice that provides you with plenty of opportunities.

Doing business in the Philippines has improved over the decades because of legislations and policies that have simplified transactions, streamlined processes, digitalization, and other factors. Foreign-owned companies have not only profited, but also have boosted the Philippine economy in various sectors. Outsourcing has been a key contributor over the years. Many companies choose the Philippines as their business partner for different reasons such as proficiency in English, willingness to take on night shifts, understanding of Western culture, and skills.

By the Numbers of Doing Business in the Philippines

One of the main reasons to invest in the Philippines is the country’s strategic location.

1. The country is centrally-located in the ASEAN. Companies can gain access to more than 600 million potential clients and customers.
2. GDP growth in the region will rise in the next five years.
3. The Philippines’ location and cost-effective labor provides companies with a potential hub for trade and manufacturing.
4. The country is one of the fastest growing in the region with an average of 5.5%.

The location isn’t the only reason to set up a business in the country. People make a huge difference in the success or failure of a company.

1. Filipinos consistently rank among the top in English proficiency. Their grasp of the language makes it easy for companies to train them. The onboarding process is faster because of this. You can delegate tasks quickly and easily because of their language proficiency.
2. A Filipino team is willing to work despite time zone differences. They can work shifts whether it’s at night or early in the morning. They can accommodate the needs and clients of your company. They can also follow the local holidays in your country.
3. Outsourcing to the Philippines is a cost-effective alternative. You can expect quality and first-rate output from your Filipino team. They can match the output of their counterparts in your country at a lower cost. The extra money you save allows you to invest in the growth of your company and product or service development.

The government has implemented ways to make it easier to do business in the country.

1. Republic Act 11659 – This act implements amendments to the PSA or Public Services Act which means that 100% foreign investment is now possible for sectors of the economy that were previously closed to it.
2. Republic Act 11647 – The amendments to the FIA or Foreign Investment Act have removed constraints on foreign ownership for export enterprises and have expanded access to various sectors of the economy.
3. Republic Act 11976 – The Ease of Paying Taxes Act aims to simplify tax compliance and regulations. It aims to digitize the various services of the Bureau of Internal Revenue. Digitalization makes it easier for taxpayers to manually or electronically file and pay their taxes on time. This act also comes with other benefits for any type of business.
4. Executive Order 18 – Provides Green Lanes for Strategic Investments.

The investment performance of the Philippines in 2023 is as follows:

1. The total approved investments amounted to P1.16 trillion which exceeded the projected P1.15 trillion.
2. Foreign investment approvals amounted to P763.22 billion while local investment approvals amounted to P398.76 billion.
3. The investment approvals per sector are renewable energy with P968.14 billion, information and communication with P96.16 billion, manufacturing with P22.03 billion, infrastructure with P20 billion, and real estate with P15.63 billion.
4. The top foreign sources are Germany with P393.28 billion, the Netherlands with P333.61 billion, Singapore with P17.38 billion, and the United States with P3.38 billion.

The Philippine government is introducing digital platforms to improve their processes. Some of these include:

1. Philippine Business Regulations Information System – This platform gives access to existing and proposed government regulations. This allows government agencies and stakeholders to sidestep conflicts and overlaps. This also improves participatory rulemaking through the provision of comments and regulatory impact analysis pursuant to Section 17(k) of RA 11032.
2. Anti-Red Tape Electronic Management Information System – This platform has a live mapping and database of the government’s services which you can find in the Citizen’s Charter. This allows both the stakeholders and the authority to monitor government agencies’ compliance and updating of their Citizen’s Charter.
3. Philippine Business Databank – The Philippine Business Databank or PBD allows government agencies to share data. This enables them to streamline the validation and verification of business’ information.

Once you look into the numbers of doing business in the Philippines, you’ll realize the opportunities that are open to you. Streamlined processes lead to faster investments and more businesses entering the country. This also accelerates the growth and development of the Philippines. The government has laid out a management plan to make sure that their ease of doing business initiatives are implemented and operational by 2028. Before that deadline, they’ll build a foundation, facilitate discussions, manage conflicts, advocate for necessary changes, and cooperate and align government agencies to support the ease of doing business initiatives. 

Before investing in the country, consider partnering with a reliable accounting company in the Philippines. Manila Bookkeepers can be your partner. Our management has more than two decades of experience in the finance and accounting industry.

We can assist you incorporate your business in the Philippines. We can guide you through the process of acquiring the documents you need and the fees you need to pay. Our team can assist you register your business whether it’s a domestic subsidiary or a branch office. Other than incorporating a business, we also provide first-rate accounting services. Our team can update your accounting books and do the following:

1. PEZA and BOI registrations.
2. Supervise and review accounting entries.
3. Prepare financial reports such as balance sheet, income statement, and cash flow statement.
4. Monthly closing of books.
5. Reconciling bank accounts.
6. Local tax compliance services.
7. Transfer pricing services.

If you want to learn more about the services our accounting company in the Philippines offers, you can visit our website www.ManilaBookkeepers.com.