Velocity Global’s Philippines PEO (Professional Employer Organization) accelerates and simplifies your business’ expansion into the market—all without first setting up an entity. International PEO makes employee onboarding easier and offers the most agile global expansion solution on the market.
When you rely on International PEO to take your operation overseas, Velocity Global becomes your Employer of Record, which enables us to compliantly hire and onboard your new supported employees on your behalf.
This expedited and streamlined service applies whether you need to hire a new team or a single, essential member. You maintain full oversight of your team while we take on all compliance, payroll, and risk mitigation measures so you can dedicate your efforts to daily operations.
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Philippines Fast Facts
Currency: Philippine peso (PHP, ₱)
Population: 108.12 million
Economy: US $376.8 billion
Top Sectors: Services, manufacturing, industry, and agriculture, hunting, forestry, and fishing
The following are public holidays, as well as additional, special non-working days:
- New Year’s Day
- Araw ng Kagitngan
- Maundy Thursday
- Good Friday
- Labor Day
- Independence Day
- National Heroes Day
- Bonifacio Day
- Christmas Day
- Rizal Day
- Chinese New Year
- EDSA People Power Revolution Anniversary
- Black Saturday
- Ninoy Aquino Day
- All Saints’ Day
- Additional special non-working day
- Feast of the Immaculate Conception of Mary
- Additional special non-working day
- Last Day of the Year
Hiring Considerations in the Philippines
Benefits of hiring in the Philippines:
- The Philippines remains one of Asia’s fastest-growing economies, with a sustained annual growth rate of 6.4% between 2010 and 2019—a 1.8% increase from the previous decade. Its annual gross national income growth now places it in middle-income territory just two years after an average income of $3,830.
- The country’s surge in tech growth also attracts an increasing number of international players. Between 2019 and 2023, the Philippines’ IT industry will see significant growth. FDI remains central to this acceleration.
- According to the World Bank’s 2020 Doing Business Report, the Philippines leaped 29 places in ranking, surging from 124th to 95th in just one year. The country made significant strides in starting a business, getting construction permits, and protecting minority investors.
Challenges when expanding into the Philippines:
- Companies reliant on exports must consider the challenges the Philippines presents. While located in one of the world’s fastest-growing regions, exporting remains a challenge. Between dealing with sluggish documentation and border compliance processes and associated costs, companies must plan accordingly.
- Although the country’s government made legislative improvements for businesses, the political climate presents challenges outside of doing business. Under President Rodrigo Duterte, the Philippines became the 113th least corrupt nation out of 180 nations, according to the 2019 Corruption Perceptions Index.
- Finding local partners remains a challenge in the Philippines. Many actors in the country sit among a relatively small circle of influential families and groups, most of whom enjoy close ties with the Philippines’ government.
Cultural nuances and must-knows for doing business in the Philippines:
- Practice punctuality. You should expect your Filipino business meeting members to arrive on time and to keep the meeting moving. At the end of the meeting, expect casual conversation with other members.
- Anticipate decisions will take time. Decision-making most often defers to higher-ranking members, which may lead to a slower finalization relative to Western expectations.
- Take the time to nurture personal relationships. Utilizing a third-party member remains an exceptionally useful approach to build trust and help meetings and deals move along.
Employment Contracts in the Philippines
Minimum wages and salaries:
- The Philippines’ minimum wage varies between sector and region.
- Probation periods must not exceed six months, as outlined in Article 281 of the country’s Labor Code. The Code identifies probationary employees as regular employees.
- Bonuses, or productivity incentives, are common in the Philippines but depend upon productivity gains identified by the labor-management committee.
The Philippines government requires all employers to pay employees a 13th-month bonus of one-twelfth of their annual salary. All non-management employees are entitled to 13th-month pay as long as they have worked at least one month for the employer (managers also often receive 13th-month pay, although it’s not required).
Termination and Severance Considerations:
- Employers must provide a notice period of termination. However, notice periods vary by grounds of termination, including just cause, authorized causes (one month), and probationary termination.
- Employers may not provide pay in lieu of a termination notice.
Paid Time Off & Benefits
- In 2019, the Philippines extended its maternity leave benefits to include all women who paid at least three months’ maternity contributions within a twelve-month period prior to birth, abortion, or miscarriage. If currently employed, women receive a daily maternity benefit equivalent to 100% of her basic salary for 60 days provided she meets a number of conditions.
- All married private and public sector employees receive seven days’ leave with full pay for the legitimate spouse’s first four deliveries with whom they cohabitate.
Vacation and annual leave:
- Employees receive 15 days’ paid vacation annually or 1.25 days monthly.
- All employees receive 15 days’ paid sick leave credits annually. Sick leave grants the employee the chance to take personal leave, or leave to care for a family member. Employees must submit their sick leave application upon returning to work. A medical certificate must accompany an application filed more than five days in advance of sick leave.
Average workweek hours:
- Normal work hours must not exceed eight hours per day, five days per week. However, certain industries’ employees may work six days per week, at 48 hours per week, and are entitled to additional compensation.
- Overtime pay results in an additional 25% of the employee’s hourly rate for work exceeding eight hours.
Choose Velocity Global
Taking your business abroad is a huge accomplishment. But navigating the complexities of global expansion presents many challenges. Partnering with Velocity Global to ensure a compliant expansion gives you the expert support and guidance you need to pursue the Philippines with confidence.
When you choose our International PEO (Professional Employer Organization) solution to expand your organization, you’re placing your trust in our team to compliantly hire and onboard on your behalf, ensuring each supported employee meets all compliance requirements.
International PEO sees that your overseas presence remains compliant, and helps you establish your presence 90% faster and up to 60% more cost-effectively than traditional, cumbersome entity establishment.
Ready to confidently expand into the Philippines? Let’s get started.