This is a quick article just to explain a few things to people about why we do things the way we do it as well as our thinking on it.
When I arrived in the Philippines initially you drop down towards Mactan Airport in Cebu and you just see the glistening ocean and green trees a real paradise. After you have settled in and start to look around which can literally be months you start to realise huge gaps in the sales market due to several things such as many of the big chains are owned by certain families which then restrict products in the country, huge taxes on electrical goods, car imports etc etc.
But the market is changing, Filipinos who are working abroad are skilled and in jobs/careers with a progressive path. In the old days the majority of people were maids and in shipping but now there is boom markets in things like health care due to Westerners getting older the restraints on staff numbers have forced to recruit from abroad. The result being a lot of this work is recession proof due to its nature and in high demand. The affects being more money goes back to the Philippines to support families and more families are starting to have spare income. The next off shoot is the retiring doctors, seamen and other overseas workers who will eventually want to come home to live out the days on a pension. This creates a market for houses, cars, electronics and at least a thousand other products that still haven’t really hit the Philippines in big numbers. The Philippines is experiencing an economic revolution which is not really noted as its not on its shores. Cant really be industrial because it hasn’t expanded as much as it should have. But people are moving in from the Provinces to find work in the cities etc. only real comparison I could think of is to look at Scotland’s history of the 50s and 60s difference being though most never returned.
So with all that going on why the Philippines for us? because its a market that is emerging and will be one that if keeps on track will have huge opportunities available to it. We already own land, we have several businesses and earning enough to not only support ourselves but as a family there are 6 of us all living comfortably and over time things are increasing expansion is around 15% a month not including the other opportunities we are about to start next month.
So what is it as a business opportunity that makes the Philippines better than the UK? Well I have had or been involved in furniture businesses (Wholesale, Retail and manufacturing), catalogue and mail companies, electronics companies, Pub, Restaurants + hotel trade, security & fire. All in the UK and the biggest problems the companies face have been :-
1. Rental costs.
2. Reliable staffing.
3. National insurance costs.
4. Business rates.
5. Energy bills.
6. E.U. Red tape.
In the Philippines you still experience most of the issues above but in an country that is fairly open to change you can adapt or discuss. In the UK its Council Policy, Government policy or 101 other excuses not to just get on with it. All which in turn can grind a business to a holt. Which out of the above businesses are the most profitable ? Personally I would go for Fire & Security and get operatives to work from home. Restrict overheads to the complete minimum it could literally be running via VOIP phones from the Philippines and may in the future do so. The UK is starving itself from the small business owners by restricting breathing space due to an ever increasing NHS and Social burden which all has to be paid for by the working and the companies that employ them.
But what about the corruption in the Philippines? “What about the corruption in the UK?” I would reply. I have experienced corrupt council officials over the years who exploit situations for personal benefit. I’ve experienced things such as a council who operated fire alarm servicing on colleges who lost the contract. We gained the contract and suddenly the fire officer is on site (From the same council) complaining about sub standard work etc. basically stating if it went back to a certain council that the problem would go away. We simply approached it from the other angle being that it was them who had been maintaining it as we had just inherited the work that should have been getting done by them. If they were happy to write explaining the facts of what isn’t upto specification we would happily advertise the fact that it had been ok for the last 10 years while they took care of the contract. That is a very small sample of things that happened over the years I had a problem a lot bigger with Malvern Hills Council relating to business premises but I wont discuss that one as the madness of it all still annoys me.
Getting away from the business sector what are the comparisons between Cebu and Worcester for families etc.
Firstly the public transport in the Philippines is so good in numbers (notice i didn’t say vehicle quality) that you really don’t need a car unless you want one out of habit or ease of transportation for shopping etc. The other point being the public transport is used by the masses which drives down the cost. Could you imagine going into your local town from home in the UK for 10p? Well that’s the sort of money you pay. OK the local salaries are around £2 – £3 a day and the majority of people don’t even earn that. But that’s not the salary band we live in we have a comfortable lifestyle which is increasing with time. The businesses will expand and in turn this creates more employment in the area. Like McDonalds? How about a Big Mac meal for less than £1.50? Or push the boat out and go to a nice restaurant for you and your partner including the trip there via a taxi and a few beers with it and still get change from £10.00
Ok what about home? In the UK topic of conversation is fuel costs for the car or heating the house lately. What about the fact you don’t need heating and can get away with mild cooling of the house? we only use A/C during the night and a lot of the time we don’t even run it. Our electricity costs around £15 a month. There is no council tax bill and rent is £30-£40 a month for a nice quiet 1 bedroom house. Got an aching back why not have a massage someone will come to your house for less than £1.00 or a trip to the saloon for hair and nails will cost you less than £2.00 for them both to be done.
Getting back to the main argument though why don’t I bring my wife to the UK. Simply because the UK is in severe decline, the bubble has burst doesn’t matter how much the government lie to us unless we stop the money and jobs flooding into Europe over open borders the UK is going to get worse. But isn’t the E.U. benefit everyone? It only benefits those who force their hand. Germany and France are doing well out of its exploitation but the UK seems to pay a lot and give up even more. Eventually some benefit will happen but the truth of the matter is that EU really stands for Equal Union which is basically by flooding the weak countries with foreign money. But look at Prague for example how much of that is German money? Do you think Prague will really benefit over time or the bankers and investors of Germany? Look at your Euro against the £ have you noticed how Greece and Spain for example prices are slowly rising up in line with the costs of other EU countries? It will eventually balance out right across Europe to the point there is no financial benefit to holidaying is Spain for example and that’s only a small slice of the pie. The next 20 years will be a mix of boom and taxation in Europe while everything realigns itself. Only real benefit are to those who control the purse strings. Everyone else will be on the losing side. Prime example the price the UK is paying for Gas from Russia which is set in the E.U. Its over priced and the UK seems to be the only idiots prepared to put up with it. Other countries write the rules and the UK is the only one following them this is th
e problem and one that isn’t going away.
So why the Philippines? Well if I can hop into the UK and work. The funds I earn invest in the Philippines and because I’m not in the Philippines myself the costs have greatly reduced there while I am away aswell all in all a win win situation. Some people might say it could take 5 – 10 years to get back my investment in some of these ventures. My answer would be so what? Its a pension fund that can already support 2 families within 2 years and still expanding monthly. Within the next few years I don’t think I will need to add anything to it as it will be growing faster than we spend which will in turn open new opportunities as we move into construction and land development.
My question for you would be “ Why aren’t you in the Philippines ? “ ( If you have the same mindset as its not as easy as it sounds).