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The Philippines opportunity

Chris Moriarty
10 May 2011 4 minute readShare
A businessman at the airport, travelling overseas

Expat blogger Chris Moriarty says US companies love working in Philippines and wonders why more Australian companies aren't taking the nation seriously as a source of talent or as a new market to to target.

I met one Australian who came up here to Manila a few years ago and set up a glass manufacturing company – making specialised glass for skyscrapers. It morphed out of a similar (struggling) business he had in Australia. He is now a multi-millionaire and his order book is bulging.

Fitness First is booming up here.

So here is my question: where are all these Australians talking about how tough it is in Australia? Why not sell your product or service into the Philippines? It is less than $1000 return to the Philippines, but the planes are empty. Come and check it out.

There are 100,000,000 consumers right on your doorstep. Who cares if only 5 per cent can afford your product or service?

Or do you not come because you don’t think you are competitive?

Well… if you are not competitive... then how can you use the Philippines to become competitive AND sell your product not just here but all over Asia and the world?

We are working with an English technology company that is using the Philippines as a sales base to drive hard into Asia. It is working – they are getting more than 10 serious new discussions a month opening with large Asian companies. Their regional sales team are no longer sitting on their hands in Sydney, instead they are running all over the place stitching up deals.

Given that a flight to, say, Singapore costs $50, why are Aussie companies not doing the same?

The Philippines is a Christian, West-leaning, English speaking, (and mostly) very-well-educated country (there is also a huge Chinese community, plus Koreans and Japanese).

It is a perfect base from which to crack open global opportunities.

Every day about 500,000 Filipinos get out of bed and go and work for North American companies. For these companies they are their ‘secret sauce’ that keeps them highly profitable and globally competitive even in tough times.

The 500,000 workers are not ‘ruffians’ who must be taught how a computer works; rather they are highly educated lawyers, accountants, civil engineers, architects, CRM operations people, computer developers, executive assistants, customer service agents and the like.

Most of them have 10 years or more corporate experience with, say, JP Morgan or Oracle or Citibank.

Telstra, Macquarie Bank and ANZ are in Manila. But Australia is woefully under-represented. While we are bogged down with third world stereotypes, American businesses from micro thru to giant corporations are moving in and grabbing the talent.

For an American start-up, their first hire might cost them $2000 a month (including office, computer, desk, chair etc).

For an Australian start-up, their first hire might cost $5000 a month (plus office, computer, desk, chair, computer etc).

For an American start-up, they master the skill of using international talent from day one.

An established Australian business with 50 staff still has no understanding of the opportunity.

There is a massive perception problem between Australia and the Philippines.

We talk to about 500 businesses a year about working in the Philippines. It is absolutely clear that there is very little understanding of what is up here.

‘Do I need a bodyguard’ is one common question.

Or even: ‘Can they do data entry?’

Meanwhile, at a gala International ICT Awards night in Makati recently sponsored by the Canadian Chamber of Commerce, 500 dinner suits and evening gowns celebrated the 500,000 Filipinos now working for Canadian and North American companies. IBM, Thompson-Reuters, Hewlett-Packard and a host of other small and large business where there.

While we are bogged down with ‘ping pong ball’ stereotypes, American businesses from micro through to corporations are moving in and grabbing the talent.

Let’s not even mention industrial relations. It is just a cake-walk if you play the game by the rules.

There is a national wage rise imminent. Here is the big issue: newspapers report that ‘militant’ unions are pushing for a massive ₱125 PHP hike in the daily take home pay of workers – that equates to about $2.80 a day. A more modest proposal of around $1 AUD a day (₱45 PHP) is being endorsed by the President – and the potential for protests and strikes are looming due to the size of the gap between workers’ demands and what the government is offering.

Now, there is no chance that any knowledge worker would be tied up in this. Workers for foreign companies get paid significantly better salaries. As they should; more is demanded of them.

This is the part of the story where the good news is all for the Philippine’s benefit.

Knowledge workers are creating a whole middle ‘urban’ class that sits between the super-rich and the very poor.

Some now own small cars, they own units and condos (or have mortgages), they have credit cards and go shopping. They buy nice clothes (impeccable dress sense – most Aussies look a bit daggy over here; I have had to smarten up a bit).

They are learning western corporate standards. Not just diligence and work hours, but also process and management theory. They are professional and expect the same from their ruling class – so politicians are under enormous pressure to clean up corruption. They have access to the web at work, they talk about world affairs, they have University degrees so their talk is knowledgeable.

A lot of them have travelled or aspire to travel (as tourists).

There is also a lot of entrepreneurship. Lots of people are leaving their corporate jobs and starting up small businesses. There are a host of small services businesses, weekend market businesses, world class independent coffee shops, niche tourism operators, great restaurants and interesting retailers.

You can just see the whole country bubbling to life, finally finding its feet after the most brutal 500 years of history meted out to just about anyone.

And the circle completes... where are you? There is a huge emerging market up here. Bring up your products and services!

Think of the Philippines as a place that can help you cut your bottom line... think also of the Philippines as a place that can lift your top one.

Chris Moriarty is the Managing Director of Flat Planet Pty Ltd and President of Flat Planet Philippines Inc.

The Philippines opportunity
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