Working in the Philippines as an expat is a wise decision that won’t disappoint you.
This is a direct result of the concerted efforts that the government has made to encourage foreign investment.
As a consequence of this, the nation stands a good chance of becoming a major economic powerhouse within the Southeast Asian area.
The multiethnic and racially diverse population of the Philippines contributes to the country’s dynamic and energetic business climate, which, in turn, is a direct result of the country’s rich cultural diversity.
As a result of Southeast Asia’s sizable market, which functions as a key entrance point to the greater Asian region, a great number of multinational firms have chosen to establish their operations in this region.
The financial and commercial operations of the Philippines are mostly concentrated in Makati City, which is included within the greater metropolitan area of Manila.
Makati City serves as the country’s most important commercial and financial centre.
In addition to playing host to a sizeable number of international embassies, the city serves as the principal location for the headquarters of a variety of national and international organizations, which helps to establish its status as the key diplomatic hub of the nation.
The manufacture of electronic components and machinery, food and beverages, clothes, footwear, tobacco, petroleum products, as well as metals and minerals, are the fundamental pillars of the Philippine economy.
Other important industries include apparel, footwear, and apparel. Call centres are one example of the kind of corporate outsourcing service that is seeing considerable demand expansion.
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Economy in the Philippines
Within the East Asia and Pacific region, the Republic of the Philippines has demonstrated significant economic dynamism in recent years.
The Philippines’ robust economy can be attributed to a number of causes, including the country’s growing urbanization, the increase of the middle class, and the country’s large and young population.
These factors contribute to a robust consumer demand, which is further reinforced by a vibrant labour market and considerable remittances from overseas workers.
The private sector continues to demonstrate resiliency, as shown by the positive performance of a number of service industries, such as wholesale and retail trade, business process outsourcing, tourism, and real estate.
Despite the negative consequences produced by the COVID-19 pandemic and other worldwide obstacles, such as increased global commodity prices and constricted global financial situations, the rate of poverty experienced a significant decrease, falling from 23.5 percent in 2015 to 18.1 percent in 2021.
This decrease brought the rate of poverty down from 23.5 percent in 2015. In 2021, the rate of poverty reached its lowest point since 2015.
In order to boost economic expansion over the medium and long term, the government of the Philippines is making concerted efforts to entice an increase in the amount of money invested in both physical and human capital.
The rise in consumer demand, along with a pick-up in exports and investments, is principally responsible for the significant growth of roughly 6% in the gross domestic product (GDP) of the Philippines that has been observed in the most recent years.
The economy has shown remarkable resiliency throughout the recession that took place between 2008 and 2009, outperforming the performance of a great number of other economies, and is currently enjoying strong expansion.
The current economic recovery was predominantly driven by the secondary sector as well as the service sector, with major contributions also coming from the manufacturing and construction industries.
To summarize, there are over 41 million people actively participating in the labour force in the Philippines, with over 21 million of those people working in the service industry.
Agriculture and production industries are key sectors for everyone working in the Philippines as an expat, with employment rates of 29% and 16% of the labour force respectively in their respective industries.
In light of the fact that the unemployment rate is currently at 6.3%, the circumstances that currently exist can be characterized as being good.
Despite the excellent economic performance of the Philippines, the country continues to struggle with severe issues, such as a substantial national debt and a high poverty rate.
Additionally, the nation is dependent on the remittances sent back by its citizens who are working outside the country to provide for their families.
The government of the Philippines has not yet adopted comprehensive plans to fully capitalize on the robust economy and provide effective incentives to increase worker engagement in the country. This is despite the fact that the government has been working on these initiatives for quite some time.
It is difficult to predict what the long-term effects of the typhoon that occurred in 2013 would be on the economy.
The natural disaster has caused obvious human misery, and it is possible that the rehabilitation of infrastructure in the eastern areas of the Philippines will require a large amount of time spanning several years.
This is in addition to the suffering that has been caused to individuals as a direct result of the natural disaster.
In addition, the rate of economic growth slowed down as a direct consequence of the occurrences described above, which brought about a moderate slowdown in the increase of the Gross Domestic Product (GDP).
Despite this, the economy is continuing to show signs of healthy expansion despite the storm-related damage that was caused.
The Philippine economy has been growing at a faster rate in recent years, with the growth rate going from 5.6 percent in 2021 to 7.6 percent in 2022.
This indicates that economic expansion in the Philippines has been accelerating. The nation is making progress toward transitioning from a lower middle-income country, which will be characterized by a gross national income per capita of $3,640 in 2021, to an upper middle-income country in the near future as a result of ongoing recovery and reform activities.
This transition will take place from a lower-middle-income country to an upper-middle-income country. In order to successfully complete this shift, you will need to achieve a per capita income that falls somewhere between $4,256 and $13,205.
Working in the Philippines as an Expat
How to Get a Work Permit
All individuals who are not citizens of the Philippines are obligated to comply with the requirement of obtaining an Alien Employment Permit (AEP) from the Philippine Department of Labor and Employment (DOLE) before they are permitted to work anywhere inside the Philippines.
If a person wishes to visit the Philippines and has previously been granted a non-immigrant visa, they are eligible to submit an application for an Alien Employment Permit (AEP) at the Philippine embassy or consulate that is located closest to their intended destination.
For more information on the prerequisites for obtaining a visa and the application process, please refer to the section of our website that discusses the steps involved in moving to the Philippines.
However, if a person is already working for a company in the Philippines, it is typically more convenient for the employer to submit the application on behalf of the employee at the closest regional Department of Labor and Employment (DOLE) office.
This is because the application must be filled out in the employee’s name. Your employment contract and the level in the organization’s hierarchy that you will be working at will determine the length of time that your AEP is valid for, as well as the organization that you will be working for.
Alien Employment Permit
To begin, it is necessary to apply for an Alien Employment Permit, also known as an AEP. The Department of Labor and Employment (DOLE) is where one can get their hands on this really important document.
The aforementioned government agency is in charge of issuing AEP to individuals who are not citizens of the country.
This ensures that these individuals are able to work legally within the borders of the country. Through the hyperlink that has been supplied, you are able to finish the application procedure online.
The validity period of an Alien Employment Permit is one year, and the permit is subject to expiration after the work assignment is finished.
Having said that, it is essential to keep in mind that the duration of the AEP should not go above a maximum of five years.
Therefore, if someone who is working in the Philippines as an expat wants to keep their job in this place, it is necessary for them to exercise prudence regarding the expiration dates of their AEP. This is because the expiration dates of their AEP can cause them to be fired.
However, there is no reason to celebrate just yet because of the acquisition of an AEP on its own at this point.
When applying for a work visa (9G), foreign nationals employed in the Philippines are required to present a greater number of employment-related papers than nationals of other countries. On the other hand, there is material to share that is more optimistic.
At the moment, work is being done to design a system with the goal of shortening the amount of time needed to process documents and cutting down on the total number of requirements. On the other hand, this assumption has not been verified as of yet.
Pre-arranged Employee Visa
Individuals who are interested in pursuing work possibilities in a foreign country have the option of applying for a 9G Visa, which is also known as the Pre-Arranged Employee Visa.
Because of this shift in policy, Philippine businesses now have the opportunity to participate in the recruitment of persons from other countries who have the necessary level of experience, education, and expertise but are not already represented in the local labour market.
This particular work visa has a validity period of typically one, two, or three years, and its duration of validity may be extended in accordance with the provisions indicated in the employment agreement.
However, non-citizens of the host country are not permitted to submit an application for this particular visa unless they have a valid job lined up within the country.
It is the responsibility of the individual’s employer to commence the process and get the Pre-Arranged Employee Visa on their behalf.
This move is being taken with the intention of reducing the administrative burdens that are placed on a person working in the Philippines as an expat as a means of improving the convenience of their life.
However, if the organization that is making the request does not have credibility, then individuals may run into additional roadblocks. There is a possibility that saving time will result from engaging in the execution of jobs independently.
Special Investor’s Resident Visa
Anyone working in the Philippines as an expat who holds a Special Investor Resident Visa (SIRV) can enjoy the following privileges as long as his investments stay in the Philippines:
- Live in the Philippines indefinitely;
- Enter and leave the country multiple times with no limit;
- Work and start a business;
- Bring dependents; and
- Open bank accounts.
The issuance of the Special Investor’s Resident Visa (SIRV) is facilitated by the Bureau of Immigration (BI) following the endorsement of the Board of Investments.
According to Book V of the Omnibus Investments Code (Executive Order No. 226, as modified), participants in the SIRV program must invest at least $75,000 in economically beneficial operations in the Philippines.
Investments made by the applicant must be remitted through a Philippine depository bank such as the Land Bank of the Philippines (LBP) or the Development Bank of the Philippines (DBP).
An SIRV can be applied for by any foreign national over the age of twenty-one (21) who meets the following criteria:
- He has not been convicted of a crime involving moral injustice;
- He is not suffering from any dangerous or contagious disease;
- He has not been institutionalized for any mental disorder or disability; and
- He has the financial means to invest at least US$75,000.
The applicant may bring his spouse and any unmarried children under the age of 21 as dependents.
Only investments or shares of stock in existing, new, or prospective corporations shall be permitted or accepted as suitable forms of investment for purposes of acquiring a SIRV:
- Companies with a public stock exchange listing;
- Companies on the Board of Investments’ Investment Priorities Plan (IPP). The government prioritizes economic activities for investment in the IPP.
- Manufacturing and service companies.
Investments in condominium units or partnerships, as well as stock ownership in firms involved in wholesale selling, are prohibited.
Temporary Work Permit
In the event that there is an immediate need for a foreign national to begin working in the Philippines as an expat, despite the fact that the Pre-Arranged Employment Visa they have applied for is still in the process of being approved, a temporary work permit may be issued to them.
The provisional work permit is something that can be obtained from the Bureau of Immigration. Because of this provision, a person working in the Philippines as an expat can immediately begin their employment activities without having to worry about running into any legal problems for a period of three months, which is the amount of time they have until they receive a valid working visa.
The Special Employment Permit is an additional form of work permit designed to ease lawful employment for any person who is working in the Philippines as an expat.
It is issued by the Department of Labor and Employment (DOL). In its most basic form, the purpose of this provision is to make it possible for foreign nationals to engage in authorized employment within the country for a period of time ranging from three to six months on a temporary basis.
Who are Exempted from Applying for AEP
- Those in diplomatic services, as well as foreign government officials accredited by our government, working in the Philippines.
- Those who work for international organizations of which our country is a member, as well as their legal spouses who wish to work as expats in the Philippines.
- Foreigners who voted as members of a genuine corporation’s governing board but had no other position in it other than voting rights.
- Foreigners are granted exemption under special statutes and other legislation enacted by Congress.
- Representatives or owners of enterprises certified by our POEA, or Philippine Overseas Employment Administration. They come here for short periods of time to interview Filipino aspirants who wish to work for them in their own country.
- Those who come to the country as exchange, visiting, or adjunct lecturers in local colleges or universities under an arrangement between the local institutions and the schools overseas, or between their government and our government. The exception should be mutual.
- Foreign nationals who are already residents in the country, including those on probation, and who are either working or looking for work.
Social Security and Insurance for Everyone Working in the Philippines as an Expat
Concerns have been raised about a number of issues, including those pertaining to social security and insurance.
It is important to highlight that those working in the private sector, domestic workers, and people who are self-employed are all covered by social security services in the Philippines.
This is an important aspect of the country’s social security system. Individuals who are no longer eligible to acquire required coverage may still be able to obtain voluntary coverage for themselves and their spouses even after they have lost eligibility for mandatory coverage.
The people who work for the government and those who serve in the military each have their own unique insurance plan.
The social security system in the Philippines provides a wide variety of benefits, such as retirement and disability provisions, maternity and sick leave entitlements, survivor payments, and cover for accidents that occur on the job.
It is recommended that you investigate whether or not the Philippines and the country from where you originated have any social security agreements in place for their respective citizens.
The retirement, disability, and survivor funds, as well as illness, maternity, and funeral benefits, are all covered by the financial contributions that individuals make throughout their employment in the Philippines. These contributions also include funds for survivors. Below are the contributions:
- Employees who are covered by insurance pay 3.33% of their monthly gross income.
- Employers are responsible for paying 7.07% of employees’ monthly gross wages.
- 10.4% of self-employed people’s monthly gross income is contributed.
Unfortunately, in a manner analogous to that of your healthcare coverage, the breadth of your social security coverage might not coincide with the level of comprehensiveness that you had anticipated.
As a result, it is recommended that foreign workers in the Philippines look into either maintaining their payments to the social security system in their home country or purchasing private insurance plans for themselves and their families.
How to Do Business in the Philippines
Foreign business professionals who are used to more egalitarian business practices may be taken aback by the hierarchical structures that are typically found inside Filipino firms.
This may be the case especially if foreign business professionals are accustomed to more egalitarian business practices.
It’s possible for the existence of a clear hierarchy to be seen in the way that meetings’ seating arrangements are set up, especially if those arrangements favour certain people over others.
The Philippines maintains strong relations with both Europe and the United States, both of which have had a considerable impact on the country’s business culture.
It is clear that family plays a significant role in the culture of the Philippines, as seen by the presence of family-owned businesses, in which numerous members of the same family work for the same organization.
It is essential for individuals to participate in networking events and create strong affiliations with Filipino counterparts because it is highly valued that commercial partnerships be cultivated and nurtured.
In the Philippines, it is common to see hierarchical company structures, in which the most important decisions are made by executives at the highest levels of the organization.
It is important to note, however, that the contribution made by a team has a great amount of importance within this framework.
The organizational dynamics of various working relationships and the relative roles assumed by individual workers frequently reflect similarities to the familial structure that is seen in Filipino society.
These similarities can be noticed in both the United States and the Philippines. A paternalistic function is assumed by the supervisor, and they are responsible for monitoring a hierarchical administration structure.
The cultivation of a high social standing, reciprocal esteem, and a favourable reputation are necessary for attaining success in the predominant commercial landscape of various Southeast Asian countries.
This is because success is dependent upon the accomplishment of a favourable reputation. Therefore, heightened levels of reverence are required not just because of age but also because of social standing.
Because Filipinos are so well-known for their pleasant temperament and graciousness, it is traditional to engage in polite conversation before getting down to the serious subject at hand.
It is not unheard of for individuals working in the local professional setting to brazenly express their opinions regarding one’s physical appearance and enquire about personal things such as age or compensation. Both of these behaviours are rather typical.
The concept of keeping one’s reputation carries great significance in the culture of the Philippines, much like it does in the cultures of several other Asian countries.
It is possible for someone to lose their social standing or reputation if they show disdain for their social rank or authority, publicly express hostility toward another person, or engage in behaviour that is intended to bring that person’s credibility into question in the company of other people.
It is in everyone’s best interest to continually show emotional restraint and to avoid engaging in public disputes or behaviours that could potentially lead professional colleagues to feel embarrassed.
If an individual has a viewpoint that is contrary to that of another person, it is best to discuss the topic in confidence with the individual who is involved.
Culture and Practices in Philippine Business
In the setting of the Philippines, engaging in business operations is defined by a considerable emphasis on personal relationships and connections. In other words, the importance of these factors cannot be overstated.
When engaging in business transactions or discussing investments in the Philippines, it is essential to be aware that the process may need a lengthier period of time compared to what one might typically experience.
This is something that one should plan for. Patience is often seen as a virtue in the setting of the Philippines, therefore having that quality is definitely something to aspire to.
When making connections with possible business partners, it is of the utmost significance to begin the process with a personal introduction that is enabled by a common acquaintance or professional contact.
This is one of the most important steps in the process. It is crucial to note that, in the context of the Philippines, the formation of fruitful commercial ties relies greatly on the cultivation of trust as well as interpersonal connections, and this is something that should be taken into consideration.
As was seen before, people of Filipino heritage exhibit a noteworthy degree of sensitivity to social position, which highlights the necessity of using formal titles as a manner of demonstrating deference to one’s peers and business associates.
The custom of exchanging business cards in this particular country is not as regimented as it is in other Asian countries; yet, the practice is still significant in its own right and has some degree of weight.
When giving and receiving business cards, it is appropriate to use both hands. This is both the custom and the expectation.
Please double-check that your title and position are printed in a legible manner on the card so that we can properly assess your level of authority and status.
Both Filipino and English are widely used in the country’s commercial settings as the country’s principal working languages.
Nevertheless, there are situations in which Spanish, Arabic, and even Chinese are utilized as well.
The normal hours of operation for a business are from 8:00 in the morning to 17:00 in the evening, and these hours apply to every workday from Monday through Friday.
Dress Code in Filipino Business Culture
Despite the fact that the Philippines has a hot and humid tropical climate, business professionals nevertheless adhere to a conventional dress code.
This dress code requires males to wear suits and requires ladies to wear lightweight yet attractive gowns.
Some people choose to dress in the traditional barong tagalog, which is a loose-fitting, long-sleeved garment with no tie required to wear it.
Initiating Professional Interactions
In most professional settings, greetings are exchanged with a firm handshake and a friendly smile. This is the conventional way to start off a conversation.
When welcoming a group of coworkers, it is traditional to address one’s pleasantries to the person in the group who has the most experience or is the eldest.
Gift-giving Traditions in Filipino Business Relationships
The custom of giving gifts retains considerable importance within the culture of doing business in the Philippines, notably as a manner of marking the formalization of a contractual agreement.
Gift-giving is done as a way to show appreciation for one another.
Avoid giving extravagant presents in favour of more appropriate alternatives such as flowers, candies, perfumes, or spirits.
Get Familiar with the Local Business Etiquette
In the context of professional engagements in the Philippines, it is recommended that certain guidelines be adhered to in order to reduce the risk of alienating business partners and colleagues
A sizeable amount of time is typically required in order to successfully cultivate strong business partnerships.
This is because of the nature of the process. It is important to keep a calm manner while obeying the rules of proper business etiquette, which are as follows:
- In order to prevent coming across as unpleasant or confrontational, try to avoid making direct or constant eye contact.
- Prior to and following meetings, have conversations with your Filipino coworkers and make an effort to get to know them. Many (harmless) personal inquiries will be asked of you. Be prepared.
- In the workplace and at meetings, both men and women should always wear acceptable, conservative attire. In the Philippines, looking good is a key component of being respected.
- The pace of doing business in the Philippines is rather slow, especially when compared to Western nations, therefore don’t be shocked if discussions take longer than planned.
- Don’t underestimate the power of the family and how it affects the economy.
- It is considered quite disrespectful to interrupt or raise your voice in front of your business partners.
The Philippines has become a desirable location for anyone who is considering working in the Philippines as an expat due to the government’s initiatives to promote foreign investment and its vibrant and diverse economic environment.
The economy of the nation has exhibited notable resilience and substantial expansion, mostly propelled by the increasing urban population, the developing middle class, and a youthful labour force.
Despite encountering several hurdles such as a significant poverty rate and a dependence on remittances, the Philippines is demonstrating notable progress in its journey towards attaining the status of an upper middle-income nation.
The process of acquiring work permits and visas is clearly delineated, however, it may necessitate patience and compliance with local customs.
The business landscape in the Philippines is largely influenced by personal ties and adherence to etiquette, underscoring the significance of trust and interpersonal connections.
In order to achieve success in this prosperous Southeast Asian nation, it will be imperative for individuals to familiarize themselves with the distinctive business culture and practices as the country progresses on its economic trajectory.
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