Business Practices in the Philippines

Opening hours and bank holidays

General Information

Commisceo Global, Filipino business culture seen by Commisceo Global

Opening Hours and Days

Banks: from 9 am to 5 pm.
Public Administrations: from 8 am to 5 pm Monday to Friday.
Shops: 10 am to 7 pm Monday to Sunday.

Holiday Compensation

If a public holiday falls on a Wednesday, it is celebrated on the Monday. If it falls on a Sunday, it is celebrated on the following Monday.

Business culture

The Fundamental Principles of Business Culture

The Philippines business culture is a blend of Western and Eastern influences owing to the country’s location and history. The Philippines has had a series of foreign influences, including Spanish and American, which have all shaped the business culture. However, its business culture also contains traditional aspects of the local culture, which are found in other Southeastern Asian nations. Hiya is an important concept that defines social conduct in the Philippines, including in the work environment. Translated as “shame” or “shyness” and likened to “losing face”, hiya is often a feeling avoided by Filipinos. Filipinos believe in Pakikisama, which is roughly defined as a concept of smooth relationship and avoidance of confrontation.

The hierarchy is vertical and the most senior person in a company approves all final decisions. Nevertheless, group consensus is necessary for all decisions before it reaches the most senior person. Decisions are likely to take long to be reached as most people will give their opinion on a matter. However, at the end of the day they will defer to higher ranking positions. Work culture is also dominated by family-run businesses where key family members get to decide how the company operates.

Personal relationships are crucial for entertaining business relations. They are an important aspect of negotiations and necessary to develop close ties with Filipino business contacts.

First Contact

It is better to be introduced by a mutual friend or an associate, especially to have access to higher ranking contacts. It is imperative to make an appointment three to four weeks in advance and to reconfirm a few days before the meeting. Face-to-face meetings are preferable to other more impersonal methods such as telephone, fax, letter or email. It is recommended to avoid planning meetings the week before Easter and around Christmas.

Time Management

Filipinos have a rather flexible sense of time. Meetings often start later than agreed. Nevertheless, foreigners are expected to arrive on time and are most likely to be kept waiting. The more senior the Filipino associate is the later they are likely to arrive at the meeting. Significant traffic may cause delays in big cities and it is recommended to plan accordingly. Meetings may have an agenda but it is not always fully respected.

Greetings and Titles

Handshakes are the most common form of greeting, both for meeting someone from the same sex and the opposite sex. They are usually gentle and not prolonged. Eye contact should not be too intense. Titles are very important, especially during first meetings, and it is appropriate to address people directly by using their professional title or Mr., Mrs., or Miss, followed by the surname. However, it is also common to move to first name terms or nicknames commonly used by Filipinos.

Gift Policy

Gift giving is not necessarily expected but appreciated after a first meeting. A small gift (ideally with the company's logo) is an appropriate gift after an initial contact. Gifts should be of good quality, but inexpensive, and nicely wrapped. They are usually not opened in the giver's presence. Christmas and the conclusion of satisfactory negotiations are also good occasions for exchanging gifts with Filipino business associates.

Dress Code

Conservative dress is expected; however, the degree of formality differs depending on the workplace. Dark coloured suits with shirts and ties are recommended for men especially when working in larger cities and meeting high ranking associates. Women are expected to wear well-tailored conservative business suits or dresses and blouses. Lighter colours are also appropriate. Business casual attire or even informal clothing are accepted outside the main cities.

Business Cards

Business cards are usually exchanged after a first meeting. While there is not an exact protocol surrounding the exchange, it is recommended to give and receive business cards with both hands. Upon receiving a business card from your Filipino associate, it is best to examine the card carefully and place it in a folder.

Meetings Management

Business meetings usually start with some small talk, which can involve personal matters (family, marriage, etc.). The initial meeting is usually reserved for getting to know the foreign counterpart rather than delving into direct negotiations. It is important to begin with a clear introduction to what you plan on discussing during the meeting. Other participants may not contribute or communicate actively at this point. Filipinos may ask many questions that are considered personal in most Western cultures; however, they also expect foreigners to ask similar questions about them to establish close ties. Furthermore, while English is one of the official languages of the Philippines, foreign associates should not assume all subtleties will be understood by their Filipino counterparts.

When submitting a proposal to Filipino business contacts, facts and figures can be overshadowed by personal relationships. Filipinos may decide based on how close they feel to their foreign counterparts rather than on the terms of their offer. That being said, bargaining is quite common in the Philippines. If Filipinos are the ones buying, they might remind you of your competition to receive a lower price or ask for credit terms. If they are the ones selling, they are likely to remind you of the demand on the market for their products/services. Negotiations usually take a long time as the pace of doing business in the Philippines is rather slow and decisions tend to be consensual. Thus it is important to remain patient.

During negotiations, it is crucial to remain diplomatic and avoid confrontation. Pressure tactics are considered very negative. Communication is indirect and Filipinos are not likely to refuse openly their counterparts' offer. Therefore, a "yes" can be very subtle and have multiple meanings. They may agree to an offer during a meeting only to avoid conflict and withdraw afterwards. Foreign counterparts should not force an immediate answer and instead give them a chance not to lose face on the spot. The "yes" is confirmed only when it is accompanied by a written confirmation. If Filipino business contacts tend to avoid talking about the specifics of the deal, the verbal "yes" is most likely to be followed by a refusal after the meeting.

Business entertaining plays an important role in working with Filipinos and usually help close a deal after several rounds of negotiations. Business lunch and dinners are quite common, as are karaoke and golf. A few drinks before the meal are also not unusual. Business is usually never the first topic of discussion when going out with Filipino business associates; however, negotiations can also be concluded outside of the office.

Sources for Further Information

Danish Ministry of Foreign Affairs - Business Culture and Etiquette in the Philippines Emerhub - Business Culture in the Philippines Culture Crossing - Philippines Business Culture EDC - Business Etiquette in the Philippines Cultural Atlas - Filipino Business Culture