12 pieces of knowledge you should know when expanding into the Philippines

Currently, I am developing a business in the Philippines. I have learned several things from my seniors and personal experiences, so I will frankly summarize what I have understood at this stage. I have compiled points that need attention at this very moment. If you are planning to expand into the Philippines, please use this as a reference.

1. Don't believe anything you haven't experienced yourself.

The Philippines is a very rough-and-ready country. I'm not making fun of it; it's just how it appears from the perspective of Japanese culture and norms. No matter how trustworthy you think someone is, they will quickly change or forget promises. This applies to both local Filipinos and Japanese people there. What they say also changes quickly.

Of course, there are people who can be trusted by Japanese standards, but if you rely too much on others, you will suffer. They might say they can do something but then can't when it comes down to it, or they might demand money just for teaching you something or introducing you to someone.

Therefore, it's better to assume that there will almost certainly be delays and other troubles when you ask someone to do something. In fact, the idea that deadlines are meant to be missed might be common sense there. Of course, there are certainly people who are not like that, but they are a minority.

2. Instead of asking for help, build your own trustworthy team.

Since things are generally rough-and-ready in every aspect, the best approach is to do things yourself and only offer what you have actually accomplished as a business. Alternatively, bring a few trustworthy staff members from Japan and build a team yourselves. It's impossible to do everything alone, so it's best to bring a team from Japan.

I ventured into the Philippines alone and started from scratch, so I've been quite flustered. I still am. Therefore, do not easily rely on help from people you connect with locally (it's okay to only seek help from truly trustworthy individuals). Instead, build a team primarily with people you have trusted since you were in Japan and work on your business. Of course, if you have a Filipino partner whom you trust from the bottom of your heart and have a long relationship with, that's also fine.

3. If you partner with a Filipino, get to know their family.

I learned this from a Korean business owner: if you ever end up working with a Filipino as a business partner, make sure to get to know their family. This is because it reduces the possibility of money being stolen or troubles arising.

If trouble arises, if it's just the individual, they might easily escape anywhere. However, if you know their family, they understand that they cannot easily run away.

In other words, when working together, getting to know the family once can also lead to preventing troubles beforehand. I think this is a rather harsh methodology, more than just 'unthinkable' in Japan, but that's what I was taught.

4. Public holidays change frequently.

Public holidays exist, but they are decided about three weeks in advance. Although there is an annual holiday calendar, holidays that weren't established last year might suddenly be enacted, or existing holidays might be changed. So, basically, you call the Department of Labor about three weeks beforehand.

And you have to confirm when the public holidays are. Therefore, it's quite difficult to plan trips months in advance to coincide with holidays, which I find quite challenging.

5. Ensure you have complete internet access. Always carry a pocket WiFi.

The presence of the internet is indispensable for operating in the Philippines. More precisely, the internet is important everywhere, so always be in a state where you can connect. In the Philippines, actually getting internet installed in your home yourself requires considerable effort.

In Japan, normally, if you request internet installation, a construction date is set, and a technician comes at the specified date and time. It's basically the same in the Philippines, but the tricky part here is that the specified date for the construction visit is vague.

They do come on the specified date, but it's often suddenly postponed, they rarely arrive on time, and overall, the timing is uncertain. Regarding the company to request internet connection from, PLDT provides internet lines, so I think most people use them. Try visiting PLDT directly or calling them.

Also, if you want to use an internet line quickly, utilize local pocket WiFi. You can use the internet immediately after purchase. Generally, the fastest line is Smart Bro. Smart Bro-specific pocket WiFi devices are sold at large malls, so purchase and use one.

You can generally use it at about the same speed as a home line, so in most cases, you won't have trouble with the internet if you have pocket WiFi. In some cases, it might even be cheaper to have multiple pocket WiFi devices than to install a home line. Please use them differently depending on the situation.

6. Live and investigate yourself rather than looking for a local partner.

You often hear about finding local partners, but having a partner without careful consideration can often limit your freedom. If you can't go to the local area directly, you might feel anxious not knowing the local situation, but once you're there, it's yours. If you go to the local area and do something, or show your face here and there, various information will start coming in.

In fact, if you go there yourself and gather information, the need for a local partner will diminish later on. It's more reassuring to build your own team and create an environment where you can be proactive, rather than finding someone to partner with. Instead of finding a partner locally from the start to get some service cheaply, it's important to 'properly buy the other party's service.' And accumulate know-how within your team.

However, of course, if they are so trustworthy that you feel 'there's no one else!', and you've spent years together and worked with them, then partnering might be possible. Don't forget to set the conditions clearly from the beginning. This is a very important issue, so be cautious.

7. Government offices and customer service are unresponsive.

It's a well-known fact that government offices, public institutions, and customer support in the Philippines have a very bad reputation. You'll be passed around, calls won't connect easily, and responses will be sloppy – in short, you'll be given the runaround. If you use them, just assume that's how it is and wait patiently.

8. Electricity bills are high. For gas, you buy a tank. Internet fees are high.

Electricity bills are generally expensive. They are higher than in Japan. You might consider them to be about 1.5 times that of Japan. Furthermore, power outages occur frequently. They usually recover in about 30 minutes, but sometimes they can last for half a day. Weak infrastructure is unavoidable, so if there's a power outage, wait patiently for it to be restored.

For gas, you generally buy a tank that goes under the gas stove. It usually costs about 800 pesos and lasts for about a month. When buying gas, if you tell the condominium front desk, they will call a gas delivery person immediately. An exact time cannot be given, but if you are in an area close to the city center, they usually arrive in about 15 to 30 minutes. The tank will be replaced, and you'll be able to use gas again.

Internet costs are also high. Of course, if you opt for a slower connection, there are cheaper options, but since the internet is important, let's get a reliable one. A decent internet connection usually costs around 4,000 pesos per month. This is roughly twice the amount in Japan. Keep this in mind as prior knowledge so you won't be surprised when the time comes.

9. Conglomerates run the country.

In the Philippines, the wealthy fundamentally run the country. Various conglomerates, centered around Ayala, exist, and they build cities, change laws, and develop the nation. Therefore, it's more about conglomerates than the government. Conglomerates can mainly be divided into two types: Spanish-affiliated and Chinese-affiliated.

The aforementioned Ayala is Spanish-affiliated, while SM-related shopping malls belong to the Chinese-affiliated Sy conglomerate. There are several other conglomerates as well. While you don't need to be overly conscious of them when conducting business, as your scale grows, your relationship with these conglomerates will likely significantly influence your future. For example, this applies when large corporations expand into the Philippines.

10. Rent is generally quite cheap. Some places can be rented from one month.

Regarding housing, it's best to acquire English proficiency or bring an English-speaking partner and explore locations directly. A 1-bedroom typically costs 10,000 to 30,000 pesos, a 2-bedroom 20,000 to 40,000 pesos, and a 3-bedroom 30,000 to 60,000 pesos. You can rent them significantly cheaper than through Japanese agencies or real estate agents. However, you will likely need to arrange the quality and interior yourself.

Since this is the general atmosphere in the Philippines, if you want to maintain the quality we usually experience in Japan, it's better to use a real estate agent with a Japanese owner. However, this tends to be more expensive than searching on your own. Some places might even charge high prices while delivering the quality as-is, so it's advisable to be careful.

11. Development plans are subject to delays.

The Philippines is a developing country, and with a lot of money flowing in, cities are constantly changing. Many annual plans are in motion simultaneously, and with a large workforce, expansion is continuous. However, it's important to recognize that these urban development plans generally do not proceed according to schedule.

Development plans are prone to delays. For example, even if a project is scheduled for completion in XX year, it's uncertain when it will actually reach full completion. If there are delays, it seems there's nothing to do but wait patiently. This might be true for Southeast Asia as a whole.

For instance, there was a plan to enable travel from Kuala Lumpur to Singapore by bullet train, but this project also progressed significantly behind its original schedule. It's safe to assume that projects rarely finish on time. If you have plans for investments or purchasing condominiums, always invest with ample leeway.

12. Absolutely do not get into trouble with Filipinos.

You must not get into trouble with Filipinos. They are very proud people. Never argue or insult them.

What you particularly need to be careful about is lending and borrowing money. Assume that money lent will not be returned. Therefore, if you have an opportunity to pay money, do not create a lending/borrowing situation; either pay cleanly or be paid cleanly. In reality, getting into trouble with Filipinos often puts your life at risk. Calm the situation gently.

Summary

For now, I've listed everything I could think of. While some aspects of the Filipino sensibility are similar to the Japanese, I feel that their approach and concepts regarding time and trouble are significantly different. Especially concerning time, delays of 30 minutes to an hour are common, and tasks you request will not be completed by the deadline.

Therefore, if you really want to proceed with things on schedule, you should allow plenty of time or proceed only with your own team. There is still a lot of preliminary knowledge that could be called, but for now, I have only introduced 12 items this time. Also, I will write whenever I think of something, so if you are interested in the Philippines, please take a look.