Investing in the Philippines

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Introduction

This paper the challenges and opportunities of investing in the Philippines. In essence, it displays the different strengths of the Philippines and its neighbors, highlighting the economic strongholds of each of the countries. Finally, the paper discusses the managerial challenges that foreign investors may face while doing business in the Philippines.

The Economy of the Philippines and its neighbors

Being an emerging industrialized nation, the growth of the Philippine economy started in the 1950s. This growth faced a dramatic deterioration after the Marcos regime owing to political mayhem (Alexander, 1990). Currently, the Government has committed itself to turn the country from its earlier status to a first-world country by 2020. The Philippine currency was the best performing currency in 2005 and 2006: the country received $12.8billion from foreign direct investment as compared to its yearly average of $2.5billion (USA International Business Publications, 2007).

Being a member of the Asia Pacific Economic Cooperation and the Asian Development Bank, the Philippines values its relationship with its neighbors. Hundreds of thousands of Philippine nationals working in neighboring countries together with millions of others working overseas contribute significantly to the economy (Kaplan, 2003).

The Philippine economy is strong in the area of business process outsourcing (BPO), tourism and industry, mining, banking and agriculture and forestry sectors. Indonesia’s economic strength has historically been in agriculture though mining and industry have rapidly increased grown. One of its neighbors, Malaysia, has a relatively strong economy because of the presence of oil deposits and its technology sector (Hutton, 1998). Singapore is a gateway to South Asia and has a highly developed financial, industrial and commercial sector. Another neighbor, Thailand, has an economy whose strength lies in the automotive industry; the nation is the leading automotive producer in South Asia, where it exports vehicles to other regions of the world. Vietnam’s economy lies majorly on its international trade, it has opened up markets to create opportunities for local and international exporters.

The strengths of South Asia complement each other since there are regional cooperation programs that enhance regional cooperation, trade, environment and economic issues. There are measures that stimulate a competition culture that will ensure that South Asia remains competitive in the global arena. Besides, there are intellectual property and development programs as well as those addressing landlocked countries, vulnerable economies and least-developed countries.

There are certain characteristics of the Pilipino culture that a manager has to understand. First, he has to understand that like many other business cultures all around the world, the management is hierarchical. However, as much as the subordinates in a company respect this pyramid, there should be mutual respect between the leadership and the subordinate. In other words, the Filipino people abhor public criticism (Nolan, 1996). Secondly, the manager-subordinate relationship is strong. Unlike western culture, the relationship between the two parties is personal in the Philippine culture, and loyalty is an inbuilt characteristic of the people. The manager should therefore consider the kind of relationship that he should adopt while handling his subordinates.

Conclusion

The Philippines has a strong economy and a solid foundation for doing business. It has a relationship with the neighborhood that provides a large market area for multinational companies to do business. Apart from some small managerial challenges that an organization has to contend with, the country is suitable for business.

References

Alexander, J. (1990). Durkheimian sociology: cultural studies. Cambridge, England: Cambridge University Press.

Hutton, W. (1998). East Malaysia and Brunei. Vermont: Tuttle Publishing.

Kaplan, R. (2003). Language and language-in-education planning in the Pacific Basin. Warren: Springer.

Nolan, J. (1996). Philippines business: the portable encyclopedia for doing business. Illinois: World Trade Press.

USA International Business Publications. (2007). Philippines Business Intelligence Report. Yiwu Zhejiang, China: Int’l Business Publications.

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