Its impossible to make money in the Philippines, or is it?

This is something you hear a lot of on the forums. Some of it is true due to the fact most things are tightly controlled making it impossible to make “Real” money but then again are you looking to make real money?

In reality there is scope to make money although there are markets that are swamped and other markets that are under developed due to other factors such as monopoly control by corporations such as San Miguel with close government ties. These things have advantages and disadvantages due to the strangle hold on most animal feed products things such as a piggery are difficult to make more than 15% per month profit. But there is a lot of waste products at the markets in the afternoons maybe the old leaves etc can be collected for you to feed the pigs and this could bring your profits up by another 10%+ Native chickens don’t hold much meat but they will find 30% of their own food if they have enough area to wander just make sure they don’t wander into a neighbours BBQ. Livestock will generally make small profits but if you want to increase it you have to think out of the box and in many cases become the breeder, fattener, butcher and cook.. because the majority of businesses in the Philippines will only do one stage of the process. So even if you started with processing meat into sausages and eventually started buying your own pigs etc. you would have a greater profit margin a pig is worth around P107 per kg to market yet the butcher will sell the meat at around P140+ per kg so you can already see the profit margin if you were the person selling the meat in the first place. Aswell as time of year picking when there is a shortfall on meat to know when to have larger stocks. It all takes time and money to do but it is possible to make a higher profit margin which starts heading to a high return rate on investment although obviously your going to have to work for it.

Internet Cafe’s are another venture that people get caught with on forums if you ask someone moving to the Philippines what they are going to do when they get there often the answer will be “running an net cafe”  truth is this is a market that is over subscribed in a big way in towns and cities the way to make money off it (if you’re in a province) is to get wireless broadband installed if you can’t get hard-wired and stick 4 PCs+ on the side of your house this will generate upto P20 per hour per machine. Not breaking the bank I know but then again you can run it when your home so it’s not really a full-time business but one that can generate regular revenue. The reason it will work in the Provinces more is simply people having to travel into the city for the internet where you are on the doorstop saving them the cost of the ride into the town/city. This is a business that can and does work (small-scale).

Jeepney businesses and taxis all come down to drivers.. a bad driver will rip you off from the days takings and may even be stealing parts of the vehicle aswell as likely to have a few expensive collisions. A good driver on the other hand is going to take care of the vehicle as its his bread and butter as much as it is yours. Realistically though everyone I know who have done this venture haven’t made good money. In fact it varied a month to month sometimes having to repair the vehicle more than it made in a month. Although I heard from a local Pinay that her uncle made money by replacing the vehicle every 2 years selling it at what he paid for it (because of price increases on the new vehicle). That way he spent virtually nothing on maintenance for 2 years then dumped it onto someone else when it needed new brakes, tyres etc. He has been making a living with his Jeepney most of his life so works but not sure if I could be bothered with all the hassles myself.

Tricycles can make money and do as long as you are moving into an area that isn’t established yet or “upgrade” some of the pedal cabs (replace but keep the same drivers). Pushing new vehicles into an area isn’t welcomed by those already operating and things could get difficult to say the least just isn’t worth the hassle. BUT if you have a new sub-division opening up soon its fair game! as the drivers will be looking to get in there themselves and most lack the capital to buy a tricycle so renting Per day can make money and in some cases some of the owners have fleets of tricycles. One thing I would advise is getting a good mechanic and welder as they do take a beating especially with the state of the roads around Cebu. Keep the maintenance costs down will keep your profits up.

Taxis are a business that in Cebu is over subscribed but I think that has been done for a good reason. The old battered taxis aren’t having the franchises renewed unless they get new vehicles so simply I think its more of a matter of replacing the old fleets rather than flooding the market. Although it will take time for the old ones to disappear completely as some of these fleets are huge and the franchises don’t stop overnight. Big issue with the taxis is also corrupt drivers who are picking up passengers without the meter (pocketing the cash) aswell as crashing the cabs. If you get into this venture advise getting radios and tracking millage on the vehicles that will stop a lot of the thieving. I believe once you have good drivers look after them and they are likely to stick around aswell as take care of your vehicles. Other option is again renting out but this can have its pitfalls which are pretty obvious (same as Jeepney).

Travel Guide business this is something that works but does have an over subscribed market aswell. So doing something a little different would be the way to go as a niche market will make sure you get the customers although what that would be you will have to decide yourself. Although something like adventure holidays would be an area to tap into because most of the owners of these companies aren’t tapping into the market properly. Poor advertisement is the biggest problem with all tourism in the Philippines.

Internet businesses do and will keep operating in the Philippines simply down to the skill of the local workers and the cost of the labour. You can set up a small call center or 101 other businesses based round office work that will take the “load” off expensive paper shuffling in your home country aswell as the obvious web design and software development sectors. One thing I have noticed though is the lack of “experience” so working on a performance or per item would be the way to make this work until you had the right team otherwise you will be paying people to learn and all that happens is an empty wallet and the people disappear to another job after you wasted your time training them.

Money lending is a business that can be dangerous and can also be very profitable if its run properly. The highest risks are due to the fact of competition and also it’s often cheaper to have someone killed than repay a loan. I wont offer advice on this venture simply because it’s a bit of a landmine and there have been people murdered.

Food franchises can work if you go to a mall you see them everywhere a small food cart or restaurants I have never seen an empty restaurant at any time of day there is always someone eating. The reason being most people in the Philippines eat 6 times a day plus snacks! So the best way to do it is small meals and cheap. Some of the products you wonder how they make money at the price but it’s literally the fact that 1000s of people are walking past and they all eat at least 2 meals more than the average westerner.

Exporting back to the U.S. or UK etc. This works its only as good as your contacts in the West and only as good as the products you can get produced. The Chinese churn crap out of China and a lot of the products are similar to some produced in the Philippines the key is high quality because you can’t compete on price. Also unique gifts work well if you can source good suppliers of hand crafted goods. But also check on the restriction regulations for imports as
such things as wood can be a land mine due to deforestation aswell as termite controls.

The list goes on.. but simply all of these businesses aswell as property rentals, estate agents (realtors) all can and do work. Why is there so much negative press about business failure in RP? Simply because the majority of people writing the articles are either unrealistic in they’re goals or they are retired and not interested in business in the first place. I would always setup a business here over the UK because its easier and more realistic in its returns to tax ratio unlike the UK which has pretty much destroyed all industries due to taxing it to death.