Both the Philippines and Singapore are attractive foreign investment destinations. The Philippines has been implementing structural reforms to improve its economy, while Singapore has always been one of the Southeast Asia’s economic giants.
If you are a foreign investor, which country should you first invest in? Here’s a comparative guide to help you decide whether you should start a business in the Philippines or Singapore.
Top Industries to Invest In
Today, Singapore is known as an International Financial Center and has positioned itself as one of the five most active foreign exchange trading centers in the world. In fact, some of the world’s largest banking chains, wealth management companies, and insurance providers maintain its headquarters in the country.
In recent years, the country has also improved its tourism industry to become one of Southeast Asia’s leading tourist destinations. Therefore, foreign investors can consider foreign exchange, insurance, and tourism-related businesses should they choose Singapore as their business destination.
On the other hand, the Philippines is widely known as a business process outsourcing (BPO) destination that specializes in customer support, IT, and other digital and technological areas. Other sectors that foreign investors can consider would be manufacturing, agriculture, energy, and infrastructure development.
The Philippines is also one of Asia’s top tourist destinations with its beautiful beaches and warm people. It is also home to one of the 7 Wonders of the World, making it highly lucrative should you want to invest in the tourism industry.
Foreign Investment Friendliness
According to the 2016 Doing Business report, Singapore ranks 2nd in the world in terms of ease of doing business as it only takes 2.5 business days to establish a business in Singapore; whereas the Philippines ranks 99th since it takes approximately 35 business days to start a business in the Philippines.
Meanwhile, in the Foreign Market Access Pillar Rankings of the Global Enabling Trade Report 2016, the Philippines ranks 39th, while Singapore only ranks 84th, indicating the foreign investment friendliness of the two countries.
The Philippine government has since created measures to make it easier for foreign investors to open a business in the country. With a wide variety of incentives such as tax exemptions and the Special Economic Zone Act to welcome foreign investors, the Philippines is becoming a more attractive business destination.
The Philippine labor force is the most compelling advantage of the country as a foreign investment destination. It boasts of a young and growing working population with a median age of 23.5 years old. With a 95% literacy rate and a high English proficiency ranking, the Philippine labor force certainly offers rich talents and skills.
There are approximately 69.4 million Filipinos aged 15 years and over, with 42.1 million of this population who are currently employed. Up to 26.6% belong to the age group 25 to 34 years, 23.1% belong to the age group 35 to 44 years, and 16.7% belong to the 15 to 24 years age group. That means that 66.4% of the Philippine labor force are aged 15 to 44 years old.
In comparison, Singapore has an aging labor force with a median age of 43 years old. The total labor force of Singapore only amounts to approximately 3.7 million. It’s important to note that since the country is also home to some of the biggest global universities, 53.1% of Singapore’s labor force holds college degrees and diploma and professional qualification. The Philippines, meanwhile, adds approximately 500,000 new college graduates to the professional pool each year.
In terms of English proficiency, Singapore boasts of a very high EF EPI score of 63.52 and ranks 6th out of 72 countries in the English Proficiency Index. But the Philippines is not far behind, with a high score of 60.33 and ranks as the 13th country in terms of English proficiency. English is the language of instruction and business in the Philippines, making it the world’s third largest English-speaking country.
Both countries offer competitive advantages and benefits to help your business flourish, and it’s up to your business and investment goals to determine which is a more appropriate destination. It’s also important to consider the cost of living in each country and the expected salaries of your potential employees.
To learn more about how to start a business in the Philippines, you can schedule a consultation with EnterPH.