High-Speed Market Entry – The Philippines

In the second addition of AYP’s Webinar Series, we discuss high-speed market entry into various countries in the ASEAN Region. Namely Singapore, Malaysia, Indonesia, the Philippines, Thailand and Vietnam. We discuss Professional Employer Organization (PEO) and Employer of Record (EOR), and how these two can be important factors into quickly and efficiently entering a market in any of the aforementioned countries. In this addition of AYP’s Webinar Series, we have experienced and esteemed in-house experts and consultants to guide you through the process and factors that affect high-speed market entry, and how you can use these to your company’s benefit.

The Philippines’ addition of AYP’S High-Speed Market Entry Webinar saw HR Consultant Maybelle Sy as the main speaker. Maybelle has more than 10 years of experience in the field of HR Management. For the past three years, she has been responsible for building strong relationships and providing valuable advice to her PEO clients and contractors in the Philippines. In this webinar, Maybelle discusses the benefits of using a PEO/EOR Service, its’ scope of service, contract types, labour laws and benefits in the Philippines, along with success and ROI of using a PEO Service.

Benefits of Using PEO/EOR: 

The use of a PEO/EOR Service essentially links clients to employees through AYP, regardless of their location. The service no doubt provides convenience for clients, as services such as payroll and tax management are taken care of by AYP. Furthermore, worry-free and convenient HR Administration and simple work pass management. The PEO Service also allows for an organisation to quickly and efficiently enter markets all over the region, without the need of an initial local entity. All in all, AYP’s PEO/EOR Service provides efficiency and cost-effectivity to clients.

Service Scope: 

Should one engage AYP for PEO/EOR Services, AYP is then responsible for local employment, work pass application, insurance coverage, insurance coverage for employees, benefits, claims and submissions along with payroll services and year-end taxes.

Philippine’s Contract Types, Labour Laws, Employee Benefits & Work Permits: 

Contracts in the Philippines consist of two types. Firstly, the employment contract. This contract is signed between employer and employee and outlines the employee’s responsibilities, compensation and benefits. The contract is based on the labour laws in the Philippines and typically is a permanent contract with an indefinite end. The second type would be consultancy contracts. This is an agreement between a company and a consultant, who does work for a fixed price. These are typically short-term, for companies with a fixed budget and no local entity.

The labour laws for these two contracts differ as well. Employment contracts are built based on labour code, with a minimum of 40 working hours per week. This type of contract entitled one to overtime pay, night differentials and holiday pay. It also includes a probationary period, 13th month bonus and retirement benefits. On the other hand, the consultancy contracts are flexible. Companies specify the required working hours and fixed pay. Compensation and benefits can mirror that of employee contracts however, this is not necessary.

The Philippines also has work permits and visa applications. There are two types of work permits, Provisional Work Permits (PWP)/Special Work Permits (SWP) which are renewable for up to six months. The second type would be the Alien Employment Permit which is a minimum of one year. There are three types of visa applications one can apply for. Firstly, a Temporary Visa which lasts from one to three months, a Pre-Arranged Employment Visa which lasts between one and four years and an Inclusion of Dependent to Pre-Arranged Visa Holder, which has the same duration as a Primary Visa.

Success Stories/ROI:

In 2018, a company was looking to enter the market in the Philippines, and engaged AYP for our PEO Services. Just one year later in 2019, they were able to open their own local entity in the Philippines and went from using AYP’S PEO services to our HR services.

In terms of ROI, utilising AYP’S PEO Services saves one the cost of engaging HR Personnel. The service also takes care of workers’ compensation and health benefits as well as unemployment and insurance coverage. The overall average ROI is some 27.2% on annual cost savings.

 

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