First things first. Let me get two things out of the way:
- This is an extremely biased post. I’m a Filipino, and a big believer in the saying “The grass is greener where you water it.” As someone who has consistently been watering and expanding my small patch of Philippine grass, I’ve found this to be true in my life.
- This is not a research paper nor a formal analysis. There are many well-researched articles available that can provide something more technical. This is a personal perspective. This is about what I’m looking at and how I’m looking at them.
The older I get, I’ve found that I look for very different things from when I was a younger entrepreneur. When backing or hiring a CEO, I look for focus, understanding, diligence, and the ability to empower others to do their best work, looking beyond brilliant ideas, shiny innovations, and media releases. When looking at an industry or category, I like to look for connected communities, the agents who influence these communities, and the ubiquitous needs and desires that arise from their interactions. And when looking for where to invest, I focus on where life has naturally taken me, which have chiefly been the Philippines and Singapore, where most of my long-term relationships have been cultivated.
Now that we’ve established my very human approach, here are my reasons for being excited about the Philippines as a business destination.
Demographic Dividends
As of January of this year (2022), there are over 112,000,000 people in the Philippines. There were over 2,600,000 live births in the country, with less than 800,000 deaths. Whenever I consider this, I think about all the lives we can bring value to and serve. When I take into account that nearly 35% are under the age of 15 and another 61% between the ages of 15 and 64, I see more opportunity in not just providing for their needs and wants, but in unlocking their own value-generating potential. This emerging, young, large population is why I’m interested in the categories of learning, liquidity, and livelihood.
Domestic Resilience
I was reading a report from ADB stating that the GDP growth forecast for the Philippines was 6% for 2022 and 6.3% for 2023, much of which is driven by domestic investment and consumption. While inflation is a concern, local businesses have a clear determination to carve out strong positions coming out of Covid. This is matched by the Filipino consumer’s own determination to live up to our tourism slogan “It’s more fun in the Philippines”, keeping our local economy active despite the global macroeconomic situation.
Let me use our experience at Bridge Access (our payroll lending company). Without taking in any outside investment, we’ve seen our worker pool grow from 14,000 in year 1, to 72,000 last year, to over 245,000 this year, and we’re only in the middle of 2022. Interestingly, despite global concerns, it has not been difficult to organize funds for our lending pool, with local partners very willing to provide wholesale financing (which has allowed us to avoid any forex impact from Dollar-denominated sources). For now, and it looks like this will continue, our clients are still hiring and still availing of our services.
Determined local investors supplying growing local consumer demand is nothing new nor sexy, but it is profitable and simple, just the way we like things.
Digital Opportunities for Digital Natives
The other day, I was talking to someone about the current crypto blood-bath, and about how many Filipinos were heavily affected. I’m no crypto nor Web 3.0 expert, and while I’m generally excited about the space, most of my crypto investments are small (DCA) and our different group investments are focused on utility (crypto banking, crypto exchange). What has interested me most is the rapid community formation, the also rapid rise of new agents/influencers, along with the matching development of new solutions and services. Here is an extremely exciting, wild, crazy, creative, lucrative, disruptive, chaotic, unstable, risky, (put your own adjective here), evolving at an increasingly fast pace, with Filipinos not only being the leading consumers (such as with social media) but Filipino companies (and I use the word loosely given that some of these entities are DAOs) holding influential positions in the space. If anything, to me, this shows the power of community to not only drive value but create value. I also use the word “value” loosely in this case. While I believe that there is a lot of fluff in the crypto space (like in many other spaces), the fact remains that there was, and is, large amounts of demand created, as seen by the volume of transactions.
To avoid sounding like a crypto-promoter, I want to be clear that the example I use is to show how open Filipinos are to adopting new technology, exploring new ways of generating value, and rapidly forming communities around new technologies. I am not commenting on whether crypto is a good investment or not. I’ll leave that to the experts.
Just as with social media, Filipinos are very native to the digital world. I’m confident that many of the lessons learned from this period will translate to future digital opportunities for Filipinos, the likes of which we have never seen.
It’s this combination of favorable demographics, domestic strength, and rapidly forming communities around technology that I am watching closely.
Conclusion: The Grass is Greener Where You Water It
If it isn’t obvious by now, I’m very bullish on the Philippines. What may not be so obvious is whom I’m writing this for. I’m writing this for Filipinos and adoptive non-Filipinos, who, for whatever reason, find themselves in the Philippines or with a connection to the Philippines. Whatever type of stake you hold in our country, cultivate it, not because some analyst told you so, but because you value what’s already yours. As I said earlier, “The grass is greener where you water it.” I hope you find, like I have, that this is indeed true.
Mabuhay!