In doing business with Filipinos, it’s best to first understand the Philippine business culture and its nuances. Filipino culture is influenced by both the West and the East, thanks to the country’s history as a colony of Spain and the US, and its extensive interactions with other Asian countries through the centuries.
Basic Filipino cultural traits in business
Personal relationships are important to Filipinos, and this is true even when doing business.
“Pakikisama”, which may be roughly translated to “camaraderie”, is important. As in many other Asian cultures, Filipinos generally tend to avoid confrontations and try to get along well with whoever they’re with, whether they’ve known them for a long time or are meeting them for the first time. They may do favors for friends and relations, even when it’s inconvenient, for the sake of “pakikisama.”
“Hiya” is another Filipino cultural trait. It literally means “shame” or “shyness”, but in a broader sense, it also goes to pride. Filipinos try to be in their best behavior and put their best face forward in business and social meetings to avoid embarrassing themselves and losing face. At the same time, they can be sensitive to criticisms or getting contradicted, especially in the presence of third parties.
Family is very important to Filipinos. They tend to be highly loyal to family members and can go to great lengths to provide for them or make them happy. It’s not unusual for parents, children, siblings, and even second and third degree relations to be part of the “family business.”
Filipinos also tend to be hierarchal. The “big bosses” and superiors at work are treated with courtesy and respect. Many defer to the decisions of their parents or senior family members in personal or business matters.
Religion is also an important cultural influence. A large majority of Filipinos are Catholics, and it’s not unusual for religious icons to be found in offices and workplaces.
The easiest and fastest way to get an introduction is through a mutual friend or business acquaintance. Aim to get introduced to highly ranked decision makers, who, in many instances, are also the most senior family members. Establishing contact through lower ranking employees might not get you anywhere.
Face to face introductions are highly preferred over emails or video calls. Make an appointment a few weeks in advance and reconfirm preferably a day or two before the meeting. A handshake is the standard business greeting for both sexes. Individuals are initially addressed by their title, such as Mr. or Ms., followed by their surname, but this can quickly change to first names, or, most likely, nicknames. Business cards are usually exchanged, but the manner of exchange is less formal compared to other Asian countries.
Filipinos are known for coming to meetings late. The VIPs or senior ranked officers may arrive later than their more junior counterparts. However, foreigners are expected to come on time. Very heavy traffic in urban areas can lead to serious delays, so it’s best to target to arrive an hour before the schedule. Plan for more than one meeting a day only if the meetings are in the same or nearby locations.
Conversations and negotiations
Filipinos like to keep it warm and personal in meetings. They might initially ask about your family and personal interests, and the conversation can flow to that direction for some length of time or intermittently throughout the meeting.
From the start, be clear on what you intend to achieve with the meeting, but go about this gently and diplomatically. A polite and courteous tone is always expected, and aggressive tactics are looked upon negatively. Give your Filipino colleagues time to think about your proposal – don’t pressure them into making a decision on the spot.
Conversations are often indirect. To avoid conflicts or uncomfortable situations, Filipinos may offer excuses on why they can’t accept or agree to what you are offering. They might even say yes to your proposal during the meeting, but send a refusal a few days later. A good sign that they truly intend to pursue a deal or agreement is when they ask for details, but always wait for a written confirmation before concluding that an agreement has been reached.
Gifts and entertainment
Gifts are not expected but are welcome. Carefully packaged gifts are appreciated, as these show you put time and thought into them. Many Filipinos unwrap presents privately to avoid embarrassing those who did not receive any. Appropriate gifts include something from your own country or hometown, electronics, gadget accessories, books, and candy. It’s traditional to exchange token gifts at Christmas.
Eating out or having a few drinks with Filipino colleagues is a good way to establish a relaxed and friendly relationship. It’s preferable to keep the conversation casual and personal unless you can subtly bring up business, or your Filipino colleagues steer the conversation toward that direction.
Understanding basic cultural traits can help you in doing business more smoothly and successfully in the Philippines. For assistance in setting up a firm and navigating the local business landscape, give us a call today.