M A R K E T W A T C HInformation from Cartus on Relocation and International Assignment Trends and Practices.

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E M E R G I N G M A R K E T S : P H I L I P P I N E S

Located in Southeast Asia, the Philippines is made up of more than 7,100 islands, the 11 largest of which contain 94% of the total land area and 90% of the country’s population. An emerging market, that is becoming a more frequent destination for assignees, the Philippines gained full independence in 1946 and has enjoyed rapid economic development in recent decades. The most popular destination for expatriates is the capital city of Manila.

K e y C h a l l e n g e A re a sInput from Cartus’ Destination Services Provider on the ground in the Philippines, highlights the following key areas for assignees:

HousingSchoolingTransportationClimateVisa & Immigration Healthcare & SecurityLanguageCultural Issues

P h i l i p p i n e s i n B r i e f• Capital: Manila

• Other Significant Cities: Quezon City, Cebu City, Davao City, Makati City, Taguig City, Muntinlupa City

• Government: Republic

• Official Languages: Filipino and English

• Currency: Philippine Peso

• Religion: Catholicism

• Population: 100,981,000

• Climate: Tropical

• Time Zone: GMT +8 hours

• Dialling Code: +63

H O U S I N G The majority of assignees reside in Manila, located on the eastern shore. The capital is one of 16 districts (known as ‘cities’ in the

Philippines) which make up Metro Manila, known as the National Capital Region and home to around 12 million people. Within Metro Manila, the primary expatriate communities and two main business districts are Makati and Taguig. Both provide a good mix of old and new properties, including furnished and unfurnished options. Serviced apartments are also available and popular for short term assignments as well as for single assignees and couples.

Makati offers houses and condominiums and Taguig is a relatively new development with only condominiums available. Quezon City, Muntinlupa and Pasig are other popular expatriate areas in Metro Manila and offer good quality housing.

Most of the new developments in Metro Manila focus on low to low-mid range units. This means it remains challenging to find high-end luxury apartments. As multinational organisations set up head offices in Bonifacio Global City, there are many prospective tenants in the area, especially for high-end accommodation. This has resulted in increasing rental rates.

Assignees looking at new properties should be aware that unit floor space is typically smaller. For example, a brand new two bedroom apartment will be around 80 sqm, whereas a 10 to 15 year old property with two bedrooms would be upwards of 120 sqm.

R e n t a l R a t e sIt is standard practice in the Philippines for landlords to request one year’s advance rental payment plus security deposit, which is equivalent to two months’ rent. This is especially the case for properties in Makati and Taguig. Landlords renting properties in secondary areas are often more flexible and may agree to monthly payments with post dated cheques.

There is a significant difference in rental rates depending on whether a personal or corporate lease is used, as the latter is liable for higher taxes. Assignees renting properties using a corporate lease should be mindful that their overall housing allowance is subject to tax.

Below is an outline of the average rental rates for properties in Manila per month (properties in other locations in the Philippines are typically lower).

Apartment Rental Rates House Rental Rates1 Bedroom P80,000 – P95,000 1 Bedroom Not available

2 Bedroom P150,000 – P180,000 2 Bedroom Not available

3 Bedroom P200,000 – P270,000 3 Bedroom P180,000 – P250,000

4 Bedroom P300,000 (very rare) 4 Bedroom P260,000 – P400,000

E M E R G I N G M A R K E T S : P H I L I P P I N E S

M A R K E T W A T C HInformation from Cartus on Relocation and International Assignment Trends and Practices.

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P ro g r a m m e A d v i c e • Due to demand in popular areas, assignees need to act quickly to

secure the property they want.

• Be mindful of extra costs associated with unfurnished properties. It should be decided before the home search whether the assignee or the organisation is responsible for furnishing the property.

• Organisations using corporate leases should consider the tax implications when calculating housing allowances.

S C H O O L I N G There is a good selection of international schools in Manila, although school places can be limited for the most popular choices, which include the British School Manila located in central Manila and Brent School of Manila, located in the Province of Laguna, popular amongst those living or working in the area. There are waiting lists for these two schools and families should register early to avoid disappointment. There are also Japanese, Korean, Chinese, French and German school options available in Manila. Availability for all international schools is becoming quite limited as the number of expatriates increase, so assignees will need to register early for all school options.

P ro g r a m m e A d v i c e• Due to limited availability, assignees with school-age children

should apply for space in schools as far in advance as possible and ensure all relevant paperwork is prepared and ready early. This includes report cards, health documents and recommendation forms.

• Organisations should also send authorisation for school assistance to their service provider once an assignment is confirmed.

T R A N S P O RTAT I O N There are many types of transport available in Manila, including taxis, private cars, buses, trains, motorised tricycles and the iconic jeepneys, for which the Philippines is famous. However, we recommend that assignees either lease a private car with driver or use taxis, as it can get too crowded on buses and trains (and these are typically only used by locals). Although taxis are metered, assignees should negotiate the fare before the journey, especially during peak hours. Uber is also available in the Philippines and a safer option for expatriates. In populous cities such as Manila and Quezon, there is heavy traffic during peak times. Congestion in Manila’s business areas can be particularly challenging.

P ro g r a m m e A d v i c e• Organisations should consider providing the assignee with a car and

driver for at least the first two weeks of the assignment. This ensures a smoother settling in process and allows the assignee (and family) to get used to their surrounding area and road/traffic conditions.

C L I M AT EThe Philippines has three main seasons including dry, cool weather between December and February, a tropical summer from March

to May and a rainy season between June and November). The rainy season often sees sudden, violent thunderstorms and typhoons, often occurring in the late afternoon. On average, eight or nine tropical storms occur in the Philippines each year. Typhoons are announced via local or national media with a ‘signal’ warning, signal 1 being the weakest and signal 3 being the strongest. The Philippines is also prone to earthquakes and eruptions from around 20 active volcanoes.

During the rainy season, the country suffers power outages on a fairly regular basis. The length of time and regularity of the power outages varies by location, but is typically worse in rural areas. The majority of expatriate condominiums will have generators that will provide anything between 30% and 100% back up. Assignees should aim to find out a generator’s capabilities before signing a lease. Houses do not typically have generators, although some people choose to install their own.

The rainy season also means that Manila can be prone to flooding, which can disrupt daily living especially routes home or to/from work and it is therefore important to know alternative routes. Congestion on the roads may also be particularly heavy during floods.

P ro g r a m m e A d v i c e• With the threat of typhoons and earthquakes, keep up to date

with weather warnings via radio and television. Before choosing permanent housing, assignees should ensure that the property is not prone to flooding and is ‘earthquake-safe’.

• To set expectations, the possibility of power outages should be communicated to the assignee and their family as soon as possible. It is certainly easier to contend with in major cities but wherever the assignee is located, such outages will prove challenging to those who come from countries where electricity is readily available.

• Flooding in Manila means alternative routes to avoid flooded areas, can save valuable time to the assignee’s day. We recommend that you provide information on alternative routes during the settling in process and - to avoid disruption to schedules - do not conduct look/see and home finding trips during the rainy season.

V I S A & I M M I G R AT I O NProcess times for visa applications are currently delayed due to the introduction of additional requirements to support applications. These delays are impacting start dates for some assignees and organisations should be mindful of this when scheduling assignments.

©2017 Cartus Corporation. All Rights Reserved. Cartus and the Cartus logo are registered trademarks of Cartus Corporation.

Source: Fragomen (Visa & Immigration section), and Country Navigator powered by TMA World – www.tmaworld.com and AtoZoftheWorld (Cultural Issues section).

AtoZoftheWorld is an online country guide which is available free of charge to Cartus clients and assignees on CartusOnlineR.

The information in this publication is provided in good faith based on information currently available and is therefore subject to change. However it is not intended to provide specific advice or guidance or take the place of either written law or regulations. Cartus accepts no liability for the accuracy, completeness or usefulness of the data and information contained herein or for any loss or damage arising in contract, tort or otherwise in reliance of the data contained or omitted from this publication or from any action or decision taken as a result.

E M E R G I N G M A R K E T S : P H I L I P P I N E S

M A R K E T W A T C HInformation from Cartus on Relocation and International Assignment Trends and Practices.

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The Philippine Bureau of Immigration announced in October 2014 that a new Alien Registration Programme (ARP) will be implemented. The ARP aims to update the Bureau’s database by registering foreign nationals, in person, and capturing biometric data. Once in place, registration will be mandatory for those residing in the Philippines for 60 days or longer. Although an implementation date is yet to be determined, assignees should be made aware that the ARP is likely to become mandatory in 2015.

P ro g r a m m e A d v i c e• We recommend that assignees be prepared with all the

necessary documentation as early as possible. For further information or queries regarding immigration, you should always consult your immigration provider.

H E A LT H C A R E & S E C U R I T YWe recommend that assignees get precautionary vaccinations for typhoid, cholera, polio, hepatitis B and tuberculosis. The Philippines does not present the level of security challenges like some emerging market locations, but in certain areas, there is a security risk for foreign nationals. Assignees should aim to stay within ‘expatriate-friendly’ areas and remain vigilant when outside.

P ro g r a m m e A d v i c e• For further healthcare information or queries, we recommend

that you seek professional advice from your healthcare provider.

• Prior to the move, organisations should conduct a full security briefing with the assignee and their family and ensure they have a well-developed security policy and a local ‘go to’ person for security related matters.

L A N G U A G EFilipinos are fluent in English and as such, the Philippines is often perceived as a relatively easy location to settle into. Culturally however, the country is quite different to other English speaking destinations, and it is important to understand the local culture, especially in business, to help with overall communication with locals.

C U LT U R A L I S S U E SFilipino culture focuses on the group rather than the individual and as such, family is deemed imperative. Catholicism also has importance in society, except in parts of the south where residents are Muslim. Despite relative poverty, hospitality is very important, with regular celebrations and festivals that can last for weeks.

Relationships. Relationships are key especially in business and hospitality is a way to build strong bonds with friends or colleagues. In business especially, everything revolves around relationships, not just with colleagues but also with superiors and suppliers.

Slower Pace. Whether at home or in the office, assignees will have to adjust to a slower pace of life as impatience will not be tolerated by locals. Make allowances in business by allocating more time for deadlines and schedules.

Organisational Structure. Management structure is paternalistic and hierarchical. Decisions are typically made from the top and some of the country’s largest companies are family-run.

Business Meetings. When conducting negotiations, ensure discussions are with the decision maker. It may take several meetings and a lot of relationship-building to identify who this is. Appearance is important and visitors should dress smartly when meeting for the first time. Women should also aim to dress modestly. Meetings should be calm, avoiding confrontation or negative feedback.

Communication. Many Filipinos find it hard to overtly disagree with others and may smile to disguise anger or embarrassment. Like most Asian cultures, locals try to avoid ‘loss of face’ in all circumstances. Assignees should be mindful of this by ensuring they do not raise their voice and are not too direct when communicating.

P ro g r a m m e A d v i c e• We recommend cross-cultural training for assignees and their

families moving to the Philippines. The type of programme chosen should take the length of the assignment into account as well as the scope of relocation experience that the assignee and family has.

Cartus thanks our Destination Service Provider, Asian Tigers Mobility for the information provided for this issue of MarketWatch.

www.cartus.com | trustedguidanceAPAC@Cartus.com