MANILA – With the ASEAN integration looming, the Philippines has to keep up with the rest of its ASEAN counterparts in all aspects of development.
Despite this, it has been said recently that the Philippines can very well be the alternate trade hub in Asia.
Dr. Felixberto Bustos Jr., a chartered financial analyst, said the acronym PLACE best explains the factors why the Philippines can be an alternate destination for business.
Bustos said P stands for "people," as Filipinos can work with any nationality, and can be assigned to head office branches abroad and do well.
He also said the Philippines is a demographic "sweet spot" courtesy of its growing population.
L is for "location" because of the country's proximity to business hubs such as Japan, China, and Singapore.
“We’re the gateway of the US going to the Pacific...In terms of time element also, we’re roughly 12 hours from New York, seven hours from London and an hour from Tokyo. If you’re trying to keep your transaction flow the whole day, then we’re a good alternate to other financial centers,” Bustos told ANC's "On The Money."
A is for ASEAN, which the Philippines is part of, while C is for "cost."
According to Bustos, the Philippines is an attractive destination for businesses because its labor cost is one-fourth of China’s.
He added that doing business in the Philippines costs less than the likes of Singapore and Hong Kong in terms of business space rental, home rental, good schools, and general living expenses.
Lastly, Bustos said E is for "English," which he explained does not only refer to the English-speaking community, but the English language infrastructure. For example, applying for any court document is done in English, and there is no need to hire an interpreter.
"It is easy for expats to dive into work without worrying about a language barrier," Bustos added.
He also said that China used to be the go-to hub for trade because of its cost advantage as it used to be cheaper than the rest. But since many companies moved to China due to low labor costs, the country got saturated and the cost of housing and other necessities have gone up.
Bustos said that currently, many people are moving out of China to look for that cost advantage.
"This is where the Philippines comes in as the next viable option in terms of cost advantage," he said.
To keep the Philippines as a viable option for international trade, Bustos suggests that the education system has to become world-class.
He added that the Philippines has a big advantage in the IT industry, as both programming and documentation are accomplished in English.
Bustos noted that the Philippines being a trade hub is not just about the physical flow of goods, but the flow of finances as well.
“The reason BPOs end up here is because of the country’s great connectivity to the world,” he said.