Blog

Business Climate in Phillipines

BUSINESS CLIMATE

 

In this article I will discuss some of the important facts relating to their culture, business ethics and etiquette which a business man should know about before travelling to the Philippines.

Facts and Statistics:

  • Population over 90 million people
  • Mixture of Malay, Spanish and American cultures
  • Filipinos are among the most generous and hospitable people in the world
  • Literacy rate more than 88.5% as primary level education is free of charge in public schools.
  • Official national language is Tagalog.

Filipino Social and Cultural Values:

Filipino Family Values:

The family is the centre of the social structure and includes the immediate family, aunts, uncles, grandparents, cousins and honorary relations such as godparents, sponsors, and close family friends. People get strength and stability from their family. As such, many children have several godparents. It is common for members of the same family to work for the same company and in some companies surprisingly it mention that preference would be given to a family members applying for a job.

Filipino Concept of Shame

kahihiyan means shame and it’s the reason why people look to continuously improve their behavior. Filipinos believe they must live up to the accepted standards of behaviour and if they fail to do so it could result in bringing shame to not only them but also upon their family. People are even willing to spend more than they can afford in order to throw a party which shows their willingness to spend rather than being at shame by their financial circumstance. If someone is publicly embarrassed, criticized, or does not live up to promise, they feel shame and lose self-esteem.

Philippines Business Culture

  • Business matters and dealing are done through a face to face meeting in a comfortable environment.
  • Start the meeting with indirect talks related to friends and commonalities
  • End the meeting with a cheerful note regardless of the results of the negotiations
  • Business meeting are normally held in mid-morning or afternoon sessions
  • Set their business appointments through a previous business connection or a go-between
  • “Filipinos avoid confrontation if at all possible. It is difficult for them to say "no". Likewise, their "yes" may merely mean "perhaps".
  • Address people especially military and bureaucratic in a business meeting with their titles as a show of respect
  • Exchange business cards as a routine but the exchange in done in a more informal way
  • Relationship bonds run deep in Filipino culture and the manager expects loyalty. In return for this loyalty the boss will look after the interests of those subordinates.
  • The employees are not warned or scolded in front of the other employees to avoid “loss of face”
  • Decision making is masking at the top level and flows down the hierarchy to the sub ordinates

Filipino Body Language and Basic Etiquette

  • Opening greetings are formal and starts by greeting the eldest or most important person first.
  • Body language is an integral part of the communications—  Maintaining an eye contact with the person speaking is seen as an aggravation and therefore, should not be maintained constantly
  • Raising eyebrows during a conversation to imply that he has understood or concurs with a statement, rather than as the sign of suspicion that is in many western cultures
  • Very non-confrontational type of culture where direct conflicts, open criticisms and reprimands and debates are discouraged

Business Etiquette Norms:

 

Relationships & Communication:

Filipinos thrive on interpersonal relationships, so it is advisable to be introduced by a third party.

Business relationships are like personal relationships, which means you could be asked to do favors for your business partner\ and they would fully expect you to request them for favors as well.

Relationships once developed remains for a lifetime not essentially just a business relationship.

If you leave the company, your replacement would have to start building up the relationship and their trust from scratch.

Dressing is important in building business relationships. It’s important to dress conservatively and formal depending on the occasion.

 

Business Meeting Etiquette

When setting an appointment make sure to do so at least 3 to 4 weeks in advance.

It is a good idea to reconfirm the appointment couple of days ahead of the meeting, as situations may change.

Avoid scheduling meetings close to public holidays like the week before Easter.

Filipinos expect punctuality and if they are punctual they will expect you to be punctual as well

It’s better to set face-to-face meetings rather than impersonal methods such as the telephone, fax, letter or email.

The topic of the meeting and discussion should be sent in advance of the meeting so they may prepare for the discussion.

At times the actual decision maker may not be at the meeting and his agents conduct the meeting.

Avoid making exaggerated claims.

Always accept any offer of food or drink. If you don’t accept their hospitality Filipinos get offended.

It is important to blend in by staying back after the business meeting to have social conversations.

 

Business Negotiation

You would probably be meeting with the decision maker’s agent for several of the visits before meeting the decision maker in person.

Decision making is centralized by the top management team and not often do you get decisions made instantly.

Filipinos are in a habit of saying “yes” which is why they like to avoid confrontation when possible. It is difficult for them to say 'no.

At each stage of the negotiation, try to get agreements in writing to avoid any confusion or misunderstanding at a later time

If you show anger by raising your voice then you may get the Filipino’s annoyed and the results may not be favorable.

Filipinos do business with people rather than companies. If you change your representatives during discussions, you may have to start over. Negotiations possibly will be relatively slow but they like to take group consensus when necessary.

Decisions are mostly emotional and depending on the feelings rather than facts and figures, which is why it is vital to develop a strong network of personal relationships.

Try not to remove your suit jacket unless the most important Filipino does.

 

Dress Etiquette

Business attire is conservative.

Men usually wear dark colored, conservative business suits, at least for the opening meeting.

Women usually wear conservative suit, a skirt and blouse, or a dress.

Women's clothing may be brightly colored as long as it is of good quality and properly tailored.

Appearances do count and it is necessary to dress well.

 

Business Cards

Business cards should be offered before the meeting can begin and it should include your title.

Present and receive the business card with two hands so that it is readable to the recipient.

The business card should be professional and not contain void information.

Some senior level executives only give business cards to those of similar rank.

 

Additional Information:

Filipino’s are very friendly in nature once they get to know a person. They spend hours long daily on social networking sites such as twitter and facebook and.they make friends easily. They like eating out and there are many restaurants available which serve international and local cuisines as well. There is ample information available online where people can make reservations as well.

Bibliography:

http://www.kwintessential.co.uk/resources/global-etiquette/philippines-country-profile.html