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See all previous publications on Business in the Philippines or read my Blog on various Philippine topics
If you search Google, then you find official international sources commenting on corruption in the Philippines. The Philippines without any doubt is one of the world's most corrupt country. A simplified definition by Webster of the word corruption is "a departure from the original or from what is pure or correct". That's a very diplomatic way to express the situation here in the Philippines.
As a foreigner there are precise laws and restrictions on what you can own, the percentage local nationals / local shareholders may have to own in a foreign business. Certain types of business simply are impossible to own by foreigners. Incorporations are no security to solve such issues. In addition for foreigners willing to invest in the Philippines or settle down with their own business such as tourist resort or other small scale business types. The minimum amount needed to be accepted as foreign investor here is in the 6 digit $ range.
Corruption in the Philippines means that things appear to go right, business appears to be regulated by law ... until someone changes his mind or finds the time appropriate to take control of your business. Such situation of a foreigner having invested money, time and above all expertise during many years and then when all went fine and business started to be really successful ... his local partners took over and he lost all - control, $ and his business as well.
Corruption in the Philippines is well established and hidden in a deep layer of connections and family ties and hidden establishment connections. The danger of Philippine corruption is the difficulty to perceive it and dissolve it. The establishment has learned in hundreds of years to arrange things. Hence even for the clean parts of the Philippine government it apparently takes time to resolve corruption for the greater benefit of a honest society.
When something can go wrong - it will go wrong. The only question is when. Hence invest in the Philippines only if you can afford venture capital - capital entirely ready to be wasted or risked.
Look at past many governments - look at the many presidents of the Republic of the Philippines. Most of them either lost their job by coup d'etat or by legal means as a result of their own extensive and excessive involvement in corruption. Presidents here use to spend a few years in the office - then a comparable number of years either in exile or in jail.
The good news is that if the legal system can jail presidents - then there seems to be an active force controlling the corruption for the wellbeing of the people of the Philippine island. Hence there is hope - but the hope requires time and money willing to be lost or at least risked to be lost.
There are many ways to make a foreign investor's life miserable. I have spent years or better decades in Africa, Caribbean Sea, various countries in Asia as well as my childhood in Europe. Problems in doing or starting business exist everywhere. However if you are in a country with known laws that are valid and implemented - that is one situation most commonly encountered in Europe. Or if you are in a country where laws exist but its implementation fails - then law is useless and thus protection by good laws absent. When money makes the law - then success fails. If success and peace is what you plan, then Philippine islands might be the wrong country to settle down and invest.
If you can carry your business, if the major part of your investment is inside you - your experience, your knowledge, your skills of decades of professional life, then you may do some small business matching Philippine mentality of love and fun. Philippines is no place for high tech investment. High tech investment requires skills and readiness to work hard and fast. The wages in the Philippines are far too low to motivate anyone to work hard and fast. If high tech productivity of high end quality product is what you are planning to do, then avoid exploiting the loving Philippine people and let your own countrymen do that job. In USA or Europe you may find employees willing or enjoying to work production lines all life long - here in the Philippines we are one step closer to heaven - one substantial step closer to God and thus the priorities in the heart of Filipinos is different from the money and career / profit oriented European or US world.
Ongoing cases of massive exploitation show that many foreigners have chosen to invest here because they have chosen to exploit existing poverty by hiring local staff far below legal minimum salary. For a while this system of nationwide spread exploitation apparently worked fine. Now however there is real hope that the end of such exploitation nears. To pay the legal minimum wages in the Philippines is absolutely NO reason to be proud of. To pay multiple of the minimum wages would be the minimum to be considered a human "boss". The ongoing procedures against labor exploitation however shows that on a long term saving on wages below minimum legal wages may cost you all your good reputation plus a solid amount. To come here simply for the cheap labor is no reason at all to invest in the Philippines. The loving people desserve much better than that.
The risk of doing illegal business of any kind - illegal by means of under-wages, or any other illegal activity finally may cost you your total investment plus your time invested here. If quality and human reasons are your sole motivations to invest here. If you are willing to treat all employees as family members, with dignity and love. The you may find a most fertile and more importantly most pleasant environment to work or better to spend your life.
Remember God's law of karma, what goes round, comes round. If you love to enjoy questionable business practices at the expense of poor ones or any other party inside or outside this beautiful island paradise - then you have to accept that other people love to play your monkey business rules as well. That means whoever screws others may find someone doing the same as well to make you experience your own way of life. That someone usually is at least one step bigger, one step stronger than you to make sure you learn your lessons in a most efficient and most powerful way.
When I look at the entire beauty of this island paradise and compare the level of destruction industrialization and money oriented economy has done to other countries .... The I see NO need for this people to undergo the very same mistakes, pain and suffering - including a more or less total destruction of nature and all natural resources.
Philippine islands are a treasure to be developed by its own population. A treasure of small, natural and clean agriculture and fishery development to meet the needs of its own population plus to have some valuable food resources for exportation. Industrialization in all cases I know so far across the entire planet always has destroyed the family and social life structure of the countries overrolled by money making ideas. Money never can be eaten - food yes. Philippine island has a beautiful potential to provide all natural needs of its own population, even without foreign investment at all. All that is needed for a happy life exists here. A few things can be improved - improved by efforts and a few new innovative ideas in organic modern small scale farming and alternate life styles rather than by money or foreign investments or enforced industrialization.
If you carefully study all meterial given on this page and the pages linked - including thousands of photos - then you will realize that there are other values on your life as well. Values no money can buy and no money ever can replace if such values are lost or destroyed. May be instead of investing money to do business you may decide to invest some of your time and love to learn, to share and to improve your own way of living for a better future of all mankind.
Cyberspace Ashram for Kriya Yoga and divine love