Ebook: What you need to know to start a business in the Philippines

This is extracted from our Market Expansion ebook, which gives tips on expanding into many Asian countries. Scroll to the bottom to download it.

Photo credit: Wikimedia.

While it doesn’t prominently figure on investors’ radar, the Philippines holds huge potential as a market. It has the second-largest population in Southeast Asia – at 105 million – and the fastest-growing economy, based on latest data. The nation is young and fluent in English. Labor is cheaper than many markets, and smartphone adoption is rising. Let’s not forget, Filipinos are dubbed the most active on social media in the world.

Having said that, the country’s tech scene is still in nascent stages. There are many barriers.

If you have a startup idea and want to introduce it first to Filipino consumers, here’s what you should expect setting up in Manila.

Ease of doing business

The Philippines climbed four notches in the World Bank’s 2017 ease of doing business report, ranking 99th out of 190 economies surveyed.

The report cited the improvement in dealing with construction permits and paying taxes in the country. But challenges remain in registering a business and getting credit.

Accelerators

The telcos are leading the digital shift – and rightly so, because they need new revenue streams to complement declines in their legacy businesses.

The Philippines’ duopoly, PLDT and Globe Telecom, are investing heavily in innovation and have their own investment arms.

PLDT’s accelerator, Ideaspace, holds a yearly competition where it chooses the top 10 startup ideas it will fund. Just this year, it made the bold move of taking a zero equity approach. Globe’s Kickstart Ventures, on the other hand, has transformed from an incubator to a full blown investment firm that invests beyond early-stage startups. PLDT, too, has a VC arm called PLDT Capital, but it’s mostly looking at companies from Silicon Valley and the rest of the globe.

There are also startup hubs that can train founders on entrepreneurship, help connect them with mentors and prospective funders, and provide them resources like office space to turn their idea into a business. These hubs include Launchgarage, Brainsparks, and Impact Hub Manila.

Filipinos busy on their phones. Photo credit: Sivesh Kumar.

Funding

As the startup ecosystem is still small, capital flowing into the Philippines lags behind other markets. Apart from the telcos, there’s only a handful of angel investors and VCs injecting funds into Filipino startups.

Tax breaks and visas

Infra

Government’s role