We hear more often from the guys who lost their shirts trying to do business in the Philippines. Most discourage others from even trying because they failed and they don’t want to see another foreigner succeed. I’m sorry about their bad luck but it hasn’t rubbed off on me. I am successful.
My wife and I have not made a fortune but make enough to live comfortably every month. We’ve been doing alright for the past 6 years. The farmland and the taxis are great assets that have increased in value. The taxi franchise paperwork that cost P35,000 can now be sold for a price starting at P100,000 and my wife owns 2.
Not having a well organized business plan, trusting all the wrong people, getting into a business that is not viable or even practical and investing everything in one project are common reasons that I have seen for the failure of foreign businesses in the Philippines.
The old myth is still being told to foreigners by other foreigners. If you want to have a small fortune from doing business in the Philippines, invest a large fortune and soon, you will have a small fortune. Simply not true across the board. I personally know a number of foreigners from several countries who have very successful small businesses here.
I also strongly disagree telling anyone that if they do not have experience running a business, they will fail. Every businessperson had to start at some point. They were not born running a business.
A Good Moon Rising
The Philippines economy is the 39th largest in the world and it is one of the emerging markets. The International Monetary Fund, Goldman Sachs, The World Bank, Standard and Poor’s, Moody’s and Fitch all have good things to report about the Philippines economy. The Philippines is currently referred to as one of the ‘Tiger Cub’ economies.
The Philippines is ranked in the global top 5 concerning its shipbuilding and ship repair industry. The shipyards and ports in the Philippines are doing a booming business with no slacking in sight.
Moog Aerospace is located in Baguio and it is a $3 Billion USD industry. Parts for Boeing aircraft and Airbus are made in the Philippines. Texas Instrument’s plant has been in Baguio for about as long as I can remember.
There are many foreign automakers in the Philippines. Ford, Isuzu, Toyota, Nissan, Honda, Mitsubishi, Suzuki and Kia. The anti-lock breaking system, ABS, for Volvo and Mercedes are made in the Philippines.
I stayed in Florida last year for one month due to the illness of a close relative. My brother drove me around almost everyday to the Gainesville-Lake City area and there was very little construction going on anywhere that I went.
If you drive around Bacolod, you will see so much ongoing construction. Office buildings, condo units, development in new subdivisions, new malls and so much progress. City Mall, which is owned by Jollibee, and 888 Chinatown Mall are under construction. SM added an entire new wing last December, 2014 and a convention center.
Megaworld from Manila is developing 2 communities and the 10 year project is expected to generate 250,000 direct and support jobs in the Bacolod area. Over the 10 year period. Office buildings, condo towers, shopping centers, bars and restaurants will be constructed. Maybe others as well.
The future is so bright, I have to wear sunglasses at night. At least compared to where my old home is in Florida!
The situation in the Philippines is not as bleak as some would like for you to believe. Actually, far from it.
Very interesting. After reading this article I will have to reconsider my thoughts on opening a business there. Thanks for this information!
Gary McMurrain says
You are welcome, Calvin. I wish you much success.
~ Gary ~
I had a piggery for years and made a good profit on it. You don’t have too have a large one. I had six sows and a boar. I averaged about 25 to 30% profit.
A piggery sounds like a great idea. We raise chickens and goats here in Oklahoma. I bet the developing Philippine economy could use more eggs and pork!
Gary McMurrain says
It’s tough making money these days by fattening piglets, due to the high cost of feed. However, breeding sows and selling the piglets once they are weaned is the way to go, in my opinion.
We have about 100 free range chickens on our farm and they produce many eggs.
~ Gary ~
Expats can make money in the Philippines, however there’is no direct correlation between the state of the Philippine economy and the success of expat small (tiny) business owners.
Paul G says
Couldn’t agree more. In my experience the naysayers are usually retirees from a main stream job who’ve never actually run a business in their lives . They come to the Philippines and expect the business to run itself or more commonly to be run by their peasant girlfriends family. Here’s 4 simple rules –
1) If you haven’t run a business before what makes you think you have the skill set to run one in a foreign country?
2) If your let an idiot run your business it will fail East or West.
3) If you don’t watch over your business your employees will either slack off if your lucky or rob you blind if your not.
4) If your making decent money from an easily replicated business it will be replicated ….. and they’ll do it for a lot less profit.
I was thinking about a charter fishing business in cebu …My wife is Phillipina and she would be the primary on the name of company. I would be the manager. I have run businesse in Canada and sold them and or still doing them. What do you think of this idea in The philippines.
I have been considering relocating to the Philippines for several years now and am just about convinced. Thank you for your info on the economy and opportunities. I am an American citizen who lived in Japan for 10 years and speak Japanese fluently. I read and translate Japanese history and literature, and see that maybe I could live cheaply among friendly folks while finding part-time work in a burgeoning area. I’m also an electrician (with an Oklahoma Electrical Contractor’s license). Maybe I could do electric work; my electrical license might be useless there, but someone could use me somehow. (My only worry is the heat, although it gets well above 100 degrees F here in Oklahoma every July and August.)
Someone could probably raise purebred puppies and supplement their income
You would probably need a decent size house or at least yard to do so
I’m sure there’s lots of successful people that do alright there
Usually their to busy working to post anything
Only naysayers have the time to gripe
Gary McMurrain says
A number of foreigners do not broadcast the business they are doing in the Philippines. The competition factor is one reason.
~ Gary ~
Im not due to retire yet, but when I do in 8 years time it will be in the Philippines.
I am just in the midst of starting a small business there. I have been many times and yes my wife and children are Filipinos. We both met whilst working abroad.
You will only get robbed or ripped of if you don’t take care of your business personally. Just like anywhere else in the world…
Having several years experience owning and operating a business in a 3rd world country I just wanted to offer some realistic input. Please understand that this is a very abbreviated list, NOT A COMPLETE LIST.
You’re in a poor country, Your profits will reflect that not so much in % but in aggregate. Don’t move from a 1st to a 3rd World economy and expect similar profits My experience was even with a well manged mature profitable business my max aggregate profit was about 25% of what the same exact business would have made back in my home country YET the values were on same landings. What would qualify as a $100K convenience store in the USA was only worth $25K in the local country. There is a lot to be commented on in this subject but it a whole article not a simple comment.
Your locals can be your worst enemy. This is a touchy comment because no matter how many egg shells I walk on someone is gonna get offended. I have a degree in business and MIS and 25 years of experience 1/3 of it as a biz and info sys consultant. After one year of operation of my offshore business I had all the data I needed to look to a future. I analyzed and interviewed others and analyzed again and found over and over again that the locals were often just trying to copy others or me and actually NEVER had a clue in what they doing trying to open a new business. unfortunutely their ignorance did much damage to everyone”s cashflow because the market had not grown on the number of competitors vying for the same pie.. Here is the kicker! I found out that the locals were so clueless as to what it takes to operate a profitable business that they would keep cutting their prices below mine until they were paying to go to work every day and yet they were too ignorant of math to know it. I say every one of these new competitors put themselves out of business and it was not by me but they cutting their prices during a period of rising costs. Me? I had to cut back on an employee and freeze prices but I never cut prices as that would have guaranteed disaster. Moral of the story is simply that it’s always hard in biz and it’s a lot harder when your competition thinks that cutting prices below costs is a viable business strategy. Ignorant people can destroy an opportunity/market for everyone.
You will find LOTS of ignorant people in these poor countries. Not an insult, a fact. Remember, they live there…they aren’t going anywhere. The bigger the mistakes they make the more hateful they will become towards you as the Gringo like you’re the one that messed things up. Be careful out there. Be polite but be realistic, most of these countries don’t want you in their country, they just want you to bring capital and leave it behind. That’s the pragmatic truth.