Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
The top five challenges that U.S. companies experience in the Philippines are:
• Graft and Corruption: Corruption, a constraint to trade and investment, is a pervasive and long-standing challenge in the Philippines. Although the Philippine Government has made major strides in fighting graft and corruption, these were not enough as shown in the Philippines’ ranking in Transparency International’s Corruption Perceptions Index. From 85 in 2014, 95 in 2015, 101 in 2016, 111 in 2017, 99 in 2018, the Philippines’ ranking was down to 113 out of 180 countries in 2019.
• Regulatory System: Product registration, product standards, and environmental and labeling requirements place restrictions on certain products. In addition, some products require special licenses and permits prior to shipment. U.S. exporters may visit the Philippine National Trade Repository website (www.pntr.gov.ph) for the list of Regulated Import Commodities and required licenses and permits. See Customs, Regulations and Standards for additional information.
• Infrastructure: The Philippines lags many of its neighbors in infrastructure development. Under capacity in international airports across the country presents a significant impediment to development and tourism. Urban and port congestion are regularly raised as constraints to business. In addition, the country ranks as one of the lowest in the region for internet penetration, connectivity, and speed, but costs are comparable to the American market. Cyber security remains a concern.
• Philippine Government Procurement: There are procurement opportunities in the Philippine Government, but a local partner is generally required. The law on government procurement (Republic Act No. 9184) calls for the lowest calculated and responsive bid and, has cumbersome bueaucratic procedures and significant paperwork requirements. See Selling to the Public Sector for more information.
• Highly Price-Sensitive Market: U.S. products are generally known for high quality, but are also more expensive. U.S. exporters should not expect to apply their U.S. pricing strategy in this market. Distributors and customers will request payment terms.