Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
Last Published: 7/18/2019

  • Graft and Corruption: The Philippine Government has made major strides in fighting graft and corruption.  President Duterte has stated he will not tolerate corruption and has even provided the Philippine public a hotline number to call to report inefficient and corrupt public servants.  Corruption, a constraint to business and outside investment, is a pervasive and long-standing challenge in the Philippines. The country’s ranking in Transparency International’s Corruption Perceptions Index has fluctuated; from 85 in 2014, 95 in 2015, 101 in 2016, 111 in 2017, and 99 out of 180 economies.

  • Ineffective Judicial System: The Philippines’ complex, slow, and complicated judicial system can inhibit the timely and fair resolution of commercial disputes. Most cases take many years to reach a final verdict.

  • Limited Ownership: The Philippines has restricted foreign ownership in selected industries, including utilities and the media. See the Investment Climate Statement for more information on these restrictions. The Government also lists several professions where foreign participation is not allowed.

  • Regulatory System: Product registration, product standards, and environmental and labeling requirements place restrictions on certain products.  See Trade Regulations for additional information.

  • Value-Added Tax (VAT): The VAT is a 12 percent tax levied on the sale of all goods and services, including the imports of goods into the Philippines.  The VAT is an indirect tax which is generally passed on to the buyer/consumer.

  • Infrastructure: The Philippines lags many of its neighbors in infrastructure development.  Major improvements are needed in transport infrastructure. Over 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. 

  • Internet penetration: 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.

  • 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.

  • Philippine Government Procurement: There are procurement opportunities with the Philippine Government, but a local partner is generally required. The law for government procurement, Republic Act (RA) 9184, calls for the least cost compliant bid, has significant paperwork requirements, limits advance payment to a maximum of 15 percent, and only allows 75 percent payment upon acceptance of  delivery of goods.  The remaining 10 percent is withheld until after the warranty period is completed. See Selling U.S. Products and Services for additional information.

  • Customs: U.S. exporters need to ensure their Philippine consignee has the proper accreditation to receive imports.  In addition, specific products require special licenses and permits prior to shipment.  U.S. exporters may contact CS Philippines to determine if their goods require import permits.  See Customs Regulations for additional information.

  • Tariff/Non-Tariff Barriers and Other Trade Regulations:  See Trade Regulations, Customs and Standards

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.


More Information

Philippines Trade Development and Promotion