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Doing Offshoring Business in the Philippines Part 1 (the macro areas)

Due to high cost of demands and other grounds of productivity, offshoring has been a great way for businesses to deal with. What makes it strategically is picking the best country to offshore your business.

For United State of America (USA), Canada, Europe, and other Asian foreign countries out there, are you planning to offshore some of your business operations in the Philippines? Freshen up onto the areas you need to know about the Philippines.

These are critical aspects to the success of setting up an off-shored operation. We have chopped this article’s topic into two parts. First part, which you will read below, enumerates the three-macro areas you need awareness in doing business in the Philippines.

1. Linguistic Background

Philippines’s native language is Filipino. However, the country is one of the few in Asia that can speak and write logical and effective English, which is considered as the universal language.

Recently, The Philippines topped and is the lone Asian country in the intermediate level, which joined Norway, Estonia, Serbia, and Slovenia in top 5 world’s best country in business English with total score of 7.11.

Filipino workforce, though not born with an English tongue, can correspond to the native English speakers. In addition, the country also has a rich pool of people who can communicate using other languages such as Spanish, Mandarin, Nihongo, French and other languages professionally.

Also, the Country is a home of differing dialects. The Philippines branched into various dialects because of its rich history. Eight major Philippine dialects are Bikol, Cebuano, Ilokano, Ilonggo, Kapampangan, Pangasinan, Tagalog, Waray. Diverse as it is, Filipinos do not consider dialects as a barrier to communication. All along, the country is a rich linguistic pool that is used extensively in the professional world.

2. Culture

Historically and culturally speaking, the country was colonized by several eastern and western countries (Spain, America, and Japan) in its antiquity. Thus, it can be noted that the pearl of the orient’s citizens inherited some cultural practices of the Americans and some Asian countries. This would make Filipinos to easily adapt with American and Asian norms, lifestyle, and ideas.

Professionally, they can manage to talk with determination, act with full spirit and even extend their work output as to the best of worldwide norm.

Moreover, for you to understand the cultural and social behaviour of Filipinos you need a quick orientation on the study of Tomas Andres, a Filipino Intercultural Consultant, who devised the Filipino Hierarchy of Needs. Filipino Hierarchy of Needs is the Philippine counterpart of Abraham Maslow Hierarchy of Needs. Andres’s pyramid of Filipino needs comprises of  (first being the basic need and the last being the highest potential) Familism (value for family), Reciprocity (debt of gratitude), Social Acceptance (the concept of Smooth Interpersonal Relationship or pakikisama), Social Mobility (the need to belong), and Pagkabayani (Heroism).

3. Economy

Philippine economic growth and stability is one indication that the said country is a trusted investment and business endpoint. Philippine trade has faced a bittersweet economic scene. Year 2001-2006 when the country encountered an economic downturn, but it slowly survived in the year 2010. World Bank and United Nations (2011) ranked the Philippines on 43th spot in terms of market value of services and goods produced locally or the GDP. In 2012, 6.6% GDP growth was achieved by the Philippines. This let the country be tagged as an emerging market in the world and newly industrialized country.

To date, The World bank organization reported the Philippine’s economic growth. These are the following:

  1. Despite the slowdown in Government spending, more than a million jobs were created in October 2014, although the quality of jobs remains a challenge.
  2. The 2013 Annual Poverty Indicator Survey (APIS) finds that real income of the bottom 20 percent grew much faster than the rest of the population.
  3. The survey also confirms that the government’s conditional cash transfer program is reaching the poor, as reflected in the substantial growth of domestic cash transfers to the bottom 20 percent.

Other news agencies also fluctuated with the Philippines as a new tiger economy Headlines. The following consists of few highlights on how the country spotted as news headlines in economy.

  1. All Jazeera reported that the Philippines managed to garner an “investment grade” status from the world’s leading credit rating agencies in 2013.
  2. Also, the news giant reported that the Philippines Standard & Poor’s Ratings Services upgraded the country’s credit rating to a notch above investment grade.
  3. TO sum up, the country has successfully and significantly improved its rankings in all major economic competitiveness and opening indices.
  4. The Philippine Star stated, “The (Philippine) economy has undergone a remarkable transition from a pussycat into a tiger economy over the last decade.
  5. Bloomberg reports that Philippines is a Leading Asian Tiger Economy of the World.
  6. In times Inc., The Philippines: a new Asian tiger is born.

The above aspects are just few of the economic background the Philippines can say a lot in terms of economic stability and competitiveness.

On the other hand, why we called these as “macro areas”? Language, Culture, and Economy are the results of interplaying large-scale factors (the country’s historical events, deep-rooted practices, and economic decisions) and not specifically set by Philippine laws and programs. In our next article, we will be showing the three “micro areas” that you should be cognizant when undertaking offshoring operations in the pearl of the orient.

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