The call that didn’t come

Again, this week, I am sharing my column from SunStar Davao here on LiP.  This article is appearing in SunStar on Friday, November 6, and the same day here on LiP.  Enjoy the article.

Does PLDT know what customer service is?  It would seem that they don’t, based on my recent experience with them.

I earn my living on the Internet.  All of the money that I earn comes through my work on the Internet in one way or another.  Because of that, it is important for me to have a reliable Internet connection.  If I don’t have good Internet, I can’t earn money!

Because of the fact that Internet connectivity is so important to my livelihood, I have multiple Internet accounts.  I recently got a third Internet account, through PLDT, with their MyDSL service.  I had been a MyDSL customer from 2002 until 2008 and had always been very happy with the service, until May of 2008 when they cut off my account three times for no apparent reason.  Every time I would inquire, they would get me hooked back up, but it was a hassle to never know when my service would be off again.  Because of that, I canceled the service at that time.  I got two different Internet connections with different companies when I had the PLDT disconnected.

About a month ago, I decided to give PLDT another try, since I had been happy with them for a number of years, so I got a third connection.  Having backup connections made me feel secure that I would always be online, and if one was interrupted there were still two more backup connections.

Well, the other day, my PLDT connection stopped working again.  I figured that it was just a regular outage and would resume in an hour or two.  By afternoon, though, and still no Internet from PLDT, I was a little concerned, so my wife went to the PLDT office to find out what happened.

The people at PLDT informed my wife that they had disconnected my account.  Hmm.  Why?  My wife assured them that the bill was paid, and we owed nothing on the account.  PLDT informed her that indeed the bill was up to date, and the problem was an account issue with PLDT’s computers!  Because there was a problem in their own computer system, they cut me off!  They even told my wife that there were “a lot of people with the same problem” and they were all very angry about the fact that they had been cut off.

I understand that problems happen, and must be worked out.  Here is what I don’t understand, though.  PLDT is the phone company.  They know my telephone number.  Why didn’t they call me and inform me that they were having a problem and would need to terminate my account (hopefully temporarily)?  Is that not the way customer service is supposed to work?  Inform the customer of what is going on.  But, PLDT, as they always have done, just cut off the account without any notice.  A simple phone call would have been so nice, and as I say, they certainly know my phone number.

Credit where credit is due

Credit.  The word can mean a number of things.  It can mean that you are acknowledging what somebody else did.  It can be associated with the lending or borrowing of money.  Lots of things.  In today’s article, I’m going to talk about credit in terms of borrowing money, and also the tracking of your borrowing and pay back habits.

In the USA, and probably most of the western world, when you borrow money, make payments for money owed and such, there is a “credit reporting agency” that keeps track of your habits.  If you are a person who pays your bills late, that is noted, and can be checked on by potential creditors for a number of years down the road.  Then again, if you pay on time, or pay more than what is due, that is also noted in your records, and it shows potential creditors that you have the potential to be very responsible with debts.

In short, in the USA and other countries, it is very easy for a company to check on your payment habits, and decide if you are the type of person whom they wish to extend a loan to.  If you have a good record with borrowing and repaying money, there is a good chance that you will get additional loans.

Last week, I got an e-mail from somebody that has to do with Credit Reporting Agencies.  It’s an issue that I know about and have dealt with before.  Here is a slightly edited version (I don’t want to give the personal information of the person who inquired) of the e-mail I received:

Hi there, I am realtor in Canada and am helping a client who
moved from the Philippines to find a home. The banks are asking for a
credit bureau from the Philippines, but it seems that this is a
difficult task. What is the best way to show a credit bureau or
credit information for the past year. Where would my client request
this information and how difficult is it to get?

Well, you see… the problem this person is facing is that there is no such thing as a credit reporting agency, or credit bureau in the Philippines!  Yes, you read that right, they don’t have a way of tracking you if you don’t pay your bills, or no way of seeing your credit worthiness if you do pay your bills!

Additionally, if you have great credit in the States, there is no way that you can “transfer” that credit here, so that people know that you are honorable in paying debts that you know.  Again, if you leave the States owing a bunch of money, that also cannot get onto your “record” here, because basically there is no record!  Now, let me say, if you owe enough money there, and try to skip out on it by moving to the Philippines, that could still lead to trouble for you, because if you owe enough money, they might just track you down, and still come after you here (if the amount owed is enough to justify the cost of doing that).

Now, even though there is no credit reporting here, there still is one way that bad (or good) credit could affect you here.  That is if you are dealing with the same company, or a sister company.  For example, Smart Telecommunications is a subsidiary of PLDT (Philippine Long Distance Telephone).  If you owe Smart a bunch of money, and skip out on it… when you go apply for a landline at PLDT, they will likely have a record of the fact that you owe money to Smart, and they will catch you that way.  But, if you owe Globe Telecom (another cell phone provider), PLDT would have no way of knowing, because they are two different companies.

OK, so if there is no credit reporting, how do you get a loan?  How do companies decide if you are worthy of the responsibility?  How do they know that they won’t be ripped off?  What they do is that they look at your employment, your salary, and they check if you have borrowed from them before, and how you were on the payments.  You will need to supply other data too, such as a statement from the Police or NBI (National Bureau of Investigation), a clearance from the Barangay Captain (sort of the “mayor” of the neighborhood where you live) that will attest what kind of record you have.  Do you have criminal convictions?  Are you currently wanted?  The Barangay will attest to your character – are you an honest person, or not?  Do you cause trouble in the neighborhood?  If so, it might indicate that you are not the type of person that they want to do business with.

Another factor is that if you are a foreigner, it will be very, very difficult to get any kind of loans here.  If your wife is from here, and has an established record here, she could probably get the loan, but not you.  If you are an immigrant, and have been here for a few years, that is when you might be able to start getting some small credit deals, and thus building a record, but only with the company in question.  For example, if you get a credit card at a certain bank, and show a good record of credit worthiness, then after a year or two, perhaps they will allow you to upgrade to a better card with a higher limit.  Your beginning card, though, even though it is a credit card (as opposed to a debit card) will likely require you to keep a deposit at that bank, as collateral for the credit.  The payments will not be drawn against the deposit, the deposit is just there in case you skip town and owe money.

I suspect that in coming years, but possibly many years down the road, credit reporting and record keeping will make it’s way to the Philippines.  I mean, it is inevitable for it to happen.  Companies can minimize the monetary risk they take with people if such reporting is done, and is centralized, as it is in other countries.  We’ll have to wait and see if it happens!

Flying to Tuguegarao

Last month, I needed to go up to Abulug in order to pick up Rebecca and Juanito. We are back and forth to the province about every month, depending on what needs to be done up there. Over the course of this year, with Juanito’s adoption in progress and several land transactions (along with a squatter problem), we have had to go to Abulug more often than normal… And it usually involves things that Rebecca must do, rather than my being the helpful Kano husband. Abulug is 120 km away from the closest airport, in Tuguegarao. To get up there, there are three ways to go: Drive, bus, or Fly and drive. Each way of travelling has its’ own advantages and disadvantages, and we tend to use whichever method suits our needs for a particular trip. Of the three travelling methods, we use the bus the most, followed by me driving, and flying the least often.

Here’s how we travel, with the approximate costs, time, advantages, and disadvantages. I hope this is helpful to expats when deciding how to travel within the country… The relative advantages, disadvantages, and costs are roughly comparable throughout most of the country, regardless of  your destination. Note that we normally rent a car up North when I travel (Rebecca never learned how to drive)… At the end, I’ll detail how to do that in the province (No Avis or Hertz in most small provincial towns).

By bus:

Cost: Florida Lines, Cubao or Sampaloc to Tuguegarao, Aparri, or Ballesteros.

400 pesos each way, per person for Ordinary (Small seats, no aircon, many stops)… 12 hours to Tuguegarao, 16 to Aparri or Ballesteros.

650 pesos each way, per person for Deluxe (Same as Ordinary, but with padded seats, aircon, and video… Planned stops every 2-3 hours)… Same time as Ordinary.

850 pesos each way, per person, for Super Deluxe (Wide seats, aircon, videon, one stop or nonstop)… 9 hours to Tuguegarao. No Service to Aparri or Ballesteros. (FX, Jeepney, or drive from there, about 3 hours).

950 pesos each way, per person, for Sleeper (very comfortable Lie-flat seats, nonstop, only one bus per day to each origin station). 8-9 hours to Tuguegarao. No service to Aparri or Ballesteros. (FX, Jeepney, or drive from there, about 3 hours).

Rebecca has been taking the bus back and forth to Abulug from the time she was an infant. Note that there is normally no central bus station in Philippine towns (There used to be a Central terminal in Cubao during the Marcos years, but that has long since disappeared)… Each bus company operates its’own stations along their allotted routes. The locations of the station you depart from depend on where you are going and which bus company owns the route. For Tuguegarao, it is Florida Lines and Victory Lines, primarily, with a few smaller bus companies also. Once you ride a route, you learn where the stops are located for meals, though I must caution tender Western stomachs to be really careful when eating along bus routes. We always take the busses that leave in the early evening, travelling overnight, and arriving very early AM in Tuguegarao (or late AM in Ballesteros).

Advantages:

1. Virtually unlimited amounts of baggage (Generally, for two people, 3 bags / boxes per person… Over that, you buy a “seat” for your cargo, either officially, or unofficially by making a deal with the driver or conductor.) This is an advantage for us since there are times we may be carrying several hundred kg of “stuff” with us to the province.

2. Very cheap way to travel.

3. Ironically, very relaxing. The stops break up the trip, and, if travelling in daytime, a beautiful route with nice scenery.

Disadvantages:

1. It is a bloody long ride, and very hard day… Lose a day up and a day back. Except the sleeper bus, it can be difficult to get much sleep.

2. The bus drivers tend to set the aircon cold enough to hang meat in the bus (or freeze all testicular function).

3. We have had things stolen from baggage on the bus (While we were asleep… an Ipod and Cell Phone)… Keep valuables close at hand.

Driving:

Cost: I pay 2,000 pesos per day, plus petrol (one tank up and one tank back) for a Nissan Sentra (Private owner… Hertz and Avis average 3,500, but you are insured and not responsible for any damage… an issue. Read my earlier article about driving at night). (Average 10,000 pesos for short, up and back, trips… 3 days minimum).

Time: 14 hours minimum, each way (I made it once 13.5 hours, but in bad traffic, it also took 19 hours once.)

Advantages:

1. No need to rent a vehicle up North.

2. Lots of room for baggage and cargo.

3. Ability to stop whenever we want.

4. No problem on Juanito’s car seat.

Disadvantages:

1. Long, hard, drive, with few hotels along the way to sleep over. After going up and back, I need time to recover.

2. Dangerous at night.

3. More expensive.

Flying:

Cost: Despite the low fares advertised, it averages out at 5,000 pesos per person each way after taxes, departure fees, and taxi to the airport.

Time: 2 hours screwing around at the airport, 45 minutes flight time. Tuguegarao flights are ALWAYS late(Every time I’ve flown there, sometimes by up to 3 hours. Still need to get to Abulug after landing, so + 3 hours). Minimum time 6 hours.

Advantages:

1. Despite delays, quick and less stressful. Still have 1/2 day in Abulug on travel days.

2. Relatively comfortable.

3. Flights depart from NAIA Terminal 3… New and stress free.

Disadvantages:

1. Tight baggage weight / pc restrictions (This is a BIG issue with us). Restrictions are more strict on domestic flights.

2. Limited number of flights (One each daily, Air Philippines and Cebu Pacific). The return flight turns around immediately, and each airline departs near the same time, so impossible to fly up and back the same day (You need minimum of one night overnight in Tuguegarao).

3. Most expensive way to travel.

4. Still need to get from Tuguegarao. (Going by FX averages 500 pesos for Filipinos each way, 1,000 pesos for Kanos each way…Unless you are a highly skilled negotiator… The drivers are all in Kahoots, so the rates are fairly standard, including Kano pricing).

Car Rental in Tuguegarao or Aparri:

As I mentioned above, I tend to rent a car when I go up to Abulug. There are a number of reasons behind this, not least of which is that since Rebecca’s mother does not own a car, there is usually some hauling and other tasks that need to be done up on the farm. Additionally, we tend to go to Tuguegarao and then shop, do other chores, before heading up to Abulug. A vehicle makes these tasks much, much easier. As I mentioned, there aren’t many car rental options outside of Manila, Cebu, Davao, and GenSan, so how do we rent a vehicle? Well, the answer is that we rent from Becky’s large, extended family. In Tuguegarao, we rent a Mitsubishi Pajero from an in-law at 2,500 pesos per day, plus petrol. In Aparri, we rent an FX from Rebecca’s uncle for 2,000 pesos per day, plus petrol. Filling the tank on each of these vehicles usually costs between 2,500 and 3,000 pesos for diesel. We are 100% responsible for any damage, regardless of fault (Even a flat tire… I had to get one fixed… You don’t just call Avis!)… Something to keep in mind before making these types of arrangements. Also, when you rent from Hertz or a company, the daily rate clock is 24 hours from when you pick up the car… Expect in these types of arrangements to pay an extra day over the time you rent, because they always count sun-up to sundown as a full “day” . Most Jeepneys and FXs can also be rented by the day, with driver, averaging 2,000 pesos for an FX or 1,000 pesos for a jeepney… The drivers wait for the busses and flights to arrive and congregate there at those times. You just need to ask around at the airport or bus depot… SOMEONE will rent to you there.

Hopefully, you found this article helpful before heading out into the sticks… Again, costs and times are relative, but having travelled in all three regions of the Philippines, they are relatively consistent in my experience.

Chriselle Snack Hauz and Fast Food!

In 1993, My wife was spending a lot of time away from the Hotel so I got to wondering what she was up to as I knew that she was doing something in secret so one day when a local builder friend came in to collect my ladder I just asked him how the project was going on and in good Filipino fashion he immediately told me all about it! There are no well kept secrets in the Philippines!

Now I knew what was going on, I jumped into the pick up and “just by chance” happened to stumble onto the secret! Ellie had got a very good deal from a relation to rent a small building right opposite the Yellow Bus Station on the National Highway in Gen San and was converting it into a small eatery as it was a prime site for such a venture even though it was the center building in a block of 5 similar businesses, all eateries! Ellie was quite surprised to see me and had no choice but to tell me her plan, I asked her why she had not told me about it and she said that she wanted to surprise me! She had succeeded in doing so I will admit!

Now that I was in the loop, I was put on the construction gang, I was doing the electrics, plumbing etc, The walls were being paneled  with the outer skin of the Coconut Tree, in order to save the men time, I brought my small electric Chain Saw down to the site and the workers were amazed of how fast I could trim the edges of each piece of skin in order to fit them together! We replaced the old toilet and fitted one with a flush, the floor was all concreted, the concrete walls were all painted! We fitted a raised section in the roof so that the smoke and fumes would go outside and the natural breeze would blow in! Several wall fans were installed and I fitted a cooker hood over the non-gas cooking area! I even fitted a 12 volt backup light system running from a vehicle battery in case of brown outs! I was really enjoying this project!

Ellie was in charge of the cooking and serving equipment! She had made a stainless steel food warmer which was very rare around here, all the tables were covered with white Formica which was easy clean! We fitted a Stereo unit which we brought from UK so the sound was good! Everything about the place was looking very good and people were showing a lot of interest and asking when we would open for business! As opening day was getting nearer, Ellie went into overdrive and managed to get the refrigerators from San Miguel and Coke, she also added a freezer for ice making! Much of the cooking items we already had spare at the hotel so they were brought down! Decorations and posters, A sign board from San Miguel was set above the door! We were now ready to open but we had to wait a couple of days as we had to wait for a date with the Chinese lucky number 8 in it, i.e 08, 18, 28!

The big day came and we opened the doors waiting for the hungry public to arrive but to our amazement everyone still went to the other 4 eateries in the line and nobody came into ours! This went on until just before lunch time and the staff started asking people what was wrong and why people were not coming in and one Jeepney Driver summed up the problem very simple, he said, your place is too clean and everyone think its too expensive to eat and drink there! This guy was correct so we gave him and his conductor a free meal and showed him the price list and he was surprised to see that we were the same as the rest so he went away happily and became a regular customer! Once people realised that not only were our prices the same as the other in the block but our drinks were cold and the food was hot so from then on, we had a good clientele but it took a few days for the word to get out!

Business was doing fine and many people who were waiting for buses or dropping from the bus station came to eat and drink with us before continuing on their journeys, even the bus crews were now regulars! We had many requests to put a Cable TV in as well which we did and we also started to open 24 hours a day as there were lots of night guests also but unfortunately many wanted a place to sleep while waiting For an early bus and this made the place look like a doss house for vagrants at times so we again closed down on a night time! After about a year of operation we realized that we would never do too well with an eatery because with living away from the premises we could not control everything so we were thinking of what to do when the City Council made the decision for us by telling us that the front sections of all the eateries were illegal and had to be removed as the National Highway was going to be widened and in order to accommodate the project our front section had to go!

That was the excuse that we needed so we gave the place to the relations who were helping to run the business and moved ourselves totally out of it! It closed down completely not long afterward when the Yellow Bus Company moved its operation to the new station further away in an other part of the City!

The Eatery was a very interesting project as we found out for ourselves, Filipino’s did not trust clean thinking it meant expensive! The Family unit who usually own the small eateries are real hero’s to me as its very long working hours, you have to deal with awkward or drunken customers and you have always got to be ready on time with your service or your customers will go somewhere else! We tried to make this small eatery into a viable business for ourselves which we actually did but with fuel costs to and from the hotel several times a day, cooking food at the hotel and delivering it and with me drinking beer there, in the end it all became too expensive so we had the good sense to get out before things went bad for us!

The moral of this story is: If at first you don’t succeed, get out before you lose your shirt!

Get it now!

OK, folks… I am sure that most readers of this site are familiar with my book, 49 Ways to Make a Living in the Philippines.  This is my best selling book, by far, and a lot of people have given me very positive feedback after purchasing the book!  I know a number of people who have purchased the book and are actually putting an idea or two to use and are earning real money by using the methods that I have recommended!

Whether you need to completely earn a living while living in the Philippines, or if you just need to supplement your income to make a Philippine life possible, this book can help you!  You have my personal promise on that!

Well, as of this morning (October 17, 2009 in the Philippines), I have put the book on sale!  That’s right, instead of paying the regular price of $49 for the book, for a short time you will be able to get your copy for just $39.  This deal is only available to those who order through my Auctiontopia Bookstore, though.

So, go order your copy today.  When you order, this electronic book will be downloadable through the website, or I can e-mail you your copy for your convenience.

This book covers a number of methods to earn money here in the Philippines:

• How to earn money on the Internet
• How to earn money in the Philippines without using the Internet
• How to earn money in a hybrid manner, where you will do a combination of Internet earning and non-Internet earning

So, get over to the Auctiontopia Bookstore and order your copy today!  Just $39 for a short time!

Cambridge Farm Hotel Grows a Swimming Pool!

As the Hotel Business was improving and we were getting more long term guests staying with us, every day or every few days we were asked, when will you build a swimming pool? After some time, the wife went to Manila on a trip so I took my chance and started the construction of our pool!

Now, I must explain the very lucky natural money saving phenomenon which we have here, the land that we bought has about 2 or 3 feet of good top soil, then it is sand and gravel below so for all our construction projects we did not have to buy loads of sand and gravel, just dug it out of the ground as required! Not only were we able to dig out all our building materials but what was left was the hole in which we could construct the swimming pool! Already, even before I got started I was well ahead of the game! Once the work started there was no stopping us!

My building style was different to the local people as I did not use any expensive wooden form-work instead I used hollow building blocks! I first lined the random shaped hole with a wall of hollow blocks to act as a rear form in order to get the shape of the pool and to stop the earth collapsing! The working floor was the next part to introduce, this was a 3 inches thick concrete pad with just a drain hole at the lowest point, it gave a clean working surface! Once I had the outer wall and working floor constructed the steel reinforcing bars was fitted both on the floor for the main base and up the walls also! The main 8 inches thick floor was next and to allow for this large amount of concrete to be poured at one time I hired a mixer much larger than the small one that I had and I hired some extra workers also, unfortunately, the large mixer did not work at all so we did the complete mix using my small wheel barrow size mixer! This worked but it took us 18 hours to do a pour which we had estimated would take us around 10 hours!

We sure drank some cold beers after work on that day! An inside wall was then constructed of hollow blocks with a space 8 inches wide from the outer wall, this allowed us a good space to fill with concrete between the two form walls making the final thickness of the whole wall more than 16 inches thick, very strong! All cement and concrete had a waterproofing agent added to it in order to prevent any leakage, luckily for us it worked!

We had to play around a bit setting concrete steps and shallow areas for kids but this did not take long and very soon we were ready for the finishing! The drains, skimmer and water entry ports were all set in and pipes laid to the pumps, filters etc and for the finishing, we used a mixture of white cement and blue cement color mixed together! Again I employed a gang of plasterers as I wanted to do the finishing in one go so there would be less chance of this cement finishing lifting if water soaked underneath! All this went very smoothly but the finish was not really an even color but basically the pool was finished so we could now fill it up! This kind of color will be bleached out over time by the chlorine! The filling of the pool took 3 days continuous pumping from our 2 boreholes but it seemed to take an eternity! As we were filling, Ellie was landscaping and building cottages and a bar area, that’s where she has great ideas so I leave her to do this kind of work! To build the bar we bought a newly constructed Coconut Lumber Building from an Englishman who changed his idea of business, the price was cheap but we had to demolish it ourselves and in the process I manage to get a nail stuck through my foot! Ouch or some similar utterance I said and then off I went to the hospital for stitches and injections, the Doctor told me to rest and take it easy and afterwards I wished that I had taken his advice but I did not and was soon down on my back on a drip with a high fever and a dose of blood poisoning for a few days! Stupid me!

After my recovery, the pool was being used by friends and relations and it was not leaking so it was time to add the first batch of chlorine to the water! I added only 1 kg and went for a coffee, when I came back some minutes later I was shocked to see that the water had turned a very dark brown something like the brewed coffee that I had just consumed! What had happened was that adding the chlorine to a body of water which was mineral rich and full of invisible suspended solids created a chemical reaction and all of this stuff came out of suspension and colored the water horribly so for the next 2 weeks it was a case of add chlorine, vacuum the pool and clean the filter until the water was clean again! after the pool was cleaned up, Ellie had a portion of the requirements for visitors and guests constructed and we were ready and willing to open!

All went well, we did not have any real problems but we had to watch the water quality as even the rain is full of algae and if we do not put Chlorine and Muriatic Acid after a heavy rain the water will be green in the morning! Now we top up the pool only with water from the local Water District as it contains Chlorine already! We have only changed the water one time since we opened the pool and this was only so we could refurbish it after about 8 years! The last time we refilled we used the Water District also! Sometimes we have had bad chlorine which had expired and was worthless but now we only buy by the kilo and by doing this we can do the smell test because as chlorine is a gas you can easily smell it, if you cannot smell it then its no good!

We have all kinds of event at the pool side such as Parties, Reunions, Weddings and Receptions, Baptisms, Seminars, Birthdays, Beauty Contests including the Purok Malakas Miss Gay Contest once! We even had a choir practicing singing while up to their necks in water! As long as guests are happy, so are we! Running a pool is not easy or cheap as you need to add chemicals weather people are using the pool or not, really its more of an attraction than a money maker! One time we tried a Karaoke Machine at the pool but this did not last long as people only wanted to squawk into the microphone instead of buying food of drink!

As the years have gone by we have added things as requested, a slide was constructed but I refused to put a diving board there, we have a kids pool operating also, there are more tables and seats and even a couple of cottages for guests to stay in! Our kids have a small store which they run on a weekend and when not at school, I think this gives them good experience in dealing with people and money and they earn a bit of extra spending money also! Ellie keeps on changing the looks of the area and now there are large rocks all around the top of the pool giving it a bit more of a natural look! We even have a concrete ship wreck near the bar! Now she wants more cottages and a waterfall so she has her ideas as to what are the next requirements! If we have good income we build if not then she does things that do not cost much like rearranging the garden and transplanting trees etc! She never stop, she is always busy with something unlike me!

Just now Ellie is renovating some of the rooms and cottages until she has another good idea then another project will begin! Anything is possible!

Learning Curves

I just wrapped up teaching a class on Managerial Economics for MBA students this semester at Father Saturnino Urios University. One of the topics we covered was the use of learning curves in business. In a nutshell, learning curves are used by managers to help understand how organizations become more productive over time as people get better at doing their jobs. The basic premise is that as people get better at their jobs with time, they become more productive and the organization reaps the benefits when errors are reduced or corrected. The idea is simple. But to reap the benefits, people must learn to reduce their errors and make the necessary corrections.

What do learning curves have to do with this week’s Small Business File? Well, everything! Because this week I’d like to discuss how people, especially foreign small business owners, must make an effort to learn to get better at reducing their own errors in the Philippine context. Failing to learn from your errors in the Philippines will result is more failures in business, and in life in general. There is a real danger in relying on Western conventions when undertaking business in the Philippines. Why danger? Because the Philippines does not have the same business traditions, foundations and characteristics of other countries.

Too many foreign small business owners try to bring what they perceive are better business practices with them to the Philippines and expect those practices to result in success. Rarely does this happen. Now I’m not saying it is impossible to introduce small changes and create incremental improvements. But I am saying it is vitally important to remember: “When in the Philippines, do as the Filipinos do!”

After one has lived here long enough, many often learn that there are generally very valid reasons why things are done the way they are in the Philippines. What may appear to be strange, inefficient, or unproductive is often not the case. Laws, regulations, norms, checks and balances, employee and management training, wages — all of these factors and many more combine to form what have become generally accepted business practices in the Philippines.

Successful foreign small business owners work within the Philippine framework. Unsuccessful small business owners rage against the system and get absolutely nowhere. Complaining and making derogatory accusations towards Philippine business practices only alienates these small business owners to others, both foreign and Filipino. Instead of swimming upstream and crusading against Philippine norms, one should embrace the Philippine business culture for what it is and learn from it! This brings us back to learning curves.

The best way to make improvements in productivity for your small business is to learn from your mistakes and take corrective actions. It’s time to stop believing western methods are ‘correct’, when in fact they may not have increased your business volume, or worse, alienated many customers. If your suppliers are having trouble meeting your orders, find out why. Don’t simply jump to the conclusion that Filipino suppliers don’t know what they are doing and care less about your business. Many small business owners burn bridges this way. They don’t realize that stocks may not have arrived with the supplier yet — shipping companies face ship break downs or weather delays which cause shipments to miss by weeks sometimes.

I remember ordering supplies from Manila about three years ago and faced such a problem — there were typhoons in Luzon, and after the weather cleared up the ship to northern Mindanao was dry docked for a week for repairs. I received my order almost 3 weeks late. But that’s hardly the fault of the supplier I ordered from. I followed up with my supplier and the shipping company and learned about the cause of the delays. Both delays are a part of doing business in the Philippines.

Another foreign small business owner faced the same problem, but instead of investigating what the problem was, he simply called up his supplier, ranted about how backward the Philippines was and threatened to never do business with the supplier again. Bad move. The supplier simply decided not to do business with him again. Of course the foreign small business owner couldn’t find another supplier and his business failed soon after. I’m sure he continues to believe the Philippines ‘just doesn’t get it’. I am pretty sure it is he who just doesn’t get it. Typhoons do disrupt transport. Ships do break down. There aren’t many other alternatives when you think about it. Claiming this would never happen in a ‘western’ economy is ridiculous. Just ask anyone trying to get something delivered in one of the gulf-coast states after a hurricane has made landfall.

The lesson here is to respect Philippine business norms — build in appropriate times for delays; make sure you have an inventory system that can handle delays; be on good terms with suppliers so they can help you find alternate ways of solving your problem. You’d be surprised how easy it is to get help by simply asking for it nicely! Filipinos are used to the idiosyncrasies of doing business in the Philippines. Why not ask them to help you navigate through it? Seems to make a lot more sense than running down the business culture and wishing things worked ‘like they do in the west’ or wherever else.

Learn from your mistakes and take corrective action. Learn how to do things in the local context. Sure, introduce outside methods if they make a difference in day-to-day operations, but don’t be fooled into thinking such methods will always work. Sometimes they won’t. Don’t keep trying to force the issue. Learn that some methods and practices just won’t work. Learn from the experience and try to find out how you should be doing things to be more successful. Make the correction and be better off for it. If you’re interested in increasing productivity, adapt to local norms. You just may learn that doing so not only makes sense but improves your bottom line.

Philippine Internet Comparison

As I’ve mentioned in the past, there always seems to be a lot of interest whenever I write about Internet speed and Internet providers here in the Philippines.  In the past, I’ve used several different providers here, and each has advantages and disadvantages.  Right now, I am kind of experiencing a “glut” of Internet, but I kind of like it.

What do I mean by a “glut”?  Well, I mean that I have an oversupply of Internet connections!  If it’s possible to have an “oversupply,” that is.

I wrote back at the beginning of August that I had found Internet Heaven here in the Philippines.  Well, unfortunately, heaven was nice while it lasted, but after not too long a time, it kind of slipped down to purgatory instead of heaven.

Yes, when I wrote about being in Internet Heaven, I was talking about my new Internet Provider, SmartBro ShareIt.  ShareIt is a service provided by Smart Broadband, which provides an Internet Connection of “up to” 2 Mbps, and utilizes 3.5G connectivity from the Cellular network of Smart Telecommunications.  When I got ShareIt, I was extremely happy with the service.  The speed was great, and everything seemed wonderful.

At the time I got SmartBro ShareIt, I already had two SmartBro Canopy systems here at the house.  The SmartBro Canopy system is a different type of connectivity from Smart Broadband.  This one puts an antenna on your house, which picks up connectivity from the Cellular tower near your house.  The Canopy system is similar to ShareIt, but provides a connection of only “up to” 512 Kbps.  I was pretty happy with the Canopy system, and had been using it for over a year already.  My plan was that after I tested out the ShareIt system, I would cut off one of my Canopy accounts, then get a second ShareIt system, and cut off my other Canopy account, thus ending up with two SharIt systems.

I did go ahead and close one of my Canopy accounts, and nearly got the second ShareIt system.  However, back around the beginning of September, I started having problems with ShareIt.  The speed was still good, but it started happening that about one or up to two days per week, I had no signal on the ShareIt.  On those days, my Canopy system still worked, so I still had Internet.  But, if I had switched to two ShareIt systems, I would have been without Internet service at all, which is something I don’t want.

Another problem that I had found with ShareIt is that it did not work well at all with VOIP.  Thus, my Vonage IP phone system worked terribly on ShareIt.  Even though the speed was very fast, the VOIP just was terrible.  I could hear the person on the other end fine, but they could not hear me well, lots of flutter in my outgoing signal.  My previous experience with the SmartBro Canopy system was exactly the opposite, the person on the other end of the call said the connection was super, but on my end of the line, I was hearing only like half of what was being said!  Hmm.. this just was not acceptable.

Prior to using SmartBro (either system), I had been a customer of PLDT DSL for about 7 years.  I was always happy with the service until May 2008, when I started having billing issues with them.  They kept cutting off my account.  They said I didn’t pay my bill, even though I had receipts.  When I showed my receipt, they would hook me up again, but it was a pain that I was cut off 3 times in one month!  So, I switched.

Well, having the two SmartBro systems was pretty good, except that I was still unhappy with my VOIP situation.  And, having a US phone number is important to me for personal and business needs.  With this, Feyma and I decided to once again get a PLDT connection, which was installed on Saturday last weekend.  So far, I am very happy with it!  Funny thing is that it is the slowest of my three connections, yet it gives me the best VOIP experience by far.  Also, the surfing “feels fast” as well, even though the connection is not as fast as it is supposed to be.

So, now I have three different Internet Connections, provided by two different providers.  Just for clarity, though, PLDT owns Smart, so it could be said that all three connections are through the same provider, though.  Given that I have these three connections, which each use a different technology, I decided to do some testing.  Below, I will provide the testing results, and my thinking about each different connection.

All speed testing was done through Megapath’s speed testing service, at their San Francisco server.  PLDT and Smart have their own speed testing, but I prefer to use a speed test that the provider does not control, and also I prefer a US based server, since I am more interested in the speed to the rest of the world, not just the speed between Davao and Manila.  Speed tests were done 5 times, and a “middle” result was given for the result of the test.

PLDT DSL

I had the “Xperience” account, which is rated at “up to” 1Mbps.  It is a DSL service through my phone line.  Although PLDT does not offer any written speed guarantee, they told me that they promise 70% of the rated “up to” speed, so I should expect 700Kpbs at any given time.

Test results:
Latency:  125ms
Download Speed:  332Kbps
Upload Speed:  245Kbps

Works great for VOIP and downloads.  Even though it is well below promised speed, I am pretty happy with the results.  I will be asking for PLDT to do some “fine tuning” to see if they can’t get the speed up to where it should be, though.  Even if it remains where it is, though, I am pretty happy with it.  Speeds through the PLDT testing site are more up around 400 to 450Kbps, and that is the site that they will use for testing.

SmartBro Canopy

I’ve been using SmartBro’s Canopy system since May 2008, so almost a year and a half now, and have been pretty happy with it.  My only real complaint is that it is not too great for VOIP.

Test results:
Latency:  230ms
Download Speed:  409Kbps
Upload Speed:  235Kbps

Rated speed is “up to” 512Kbps, and I often get speeds even a little faster than that.  I suspect that the reason VOIP performance is not that good is because the latency is a bit higher than I would like.

SmartBro ShareIt

I’ve been using SmartBro ShareIt for about 2 months now, and I am very happy with it, for some applications.  When it comes to speed, it simply is unbeatable in my experience in the Philippines.  However it just is not usable if you want to do VOIP.  Also, it has been experiencing outages of up to 24 hours at a time regularly lately.  Because of this, if you don’t have some backup connectivity, you are likely to be frustrated with ShareIt service.

Testing results:
Latency:  315ms
Download Speed:  1.71 Mbps
Upload Speed:  417 Kbps

If I just want to surf the net, I want to use ShareIt every time!  For downloading files, it’s great too.  There is a podcast that I enjoy listening to everyday, which is a download of about 40 Mb each time I want to listen.  The download time for that file is rarely more than 2 minutes.  Not bad at all!  But, for anything that requires upload too… ShareIt tends to suffer.  VOIP is unusable.

For now, I’ve decided that I’ll be keeping all three connections, and using them for different things.

I have each of the three connections on a WiFi Network, so I actually have three different WiFi connections in my house!

Oh, what about the prices?  Well, they all cost exactly the same amount – P999 per month.  Having all three is not costly in my opinion – P3,000 per month, and I’ve got multiple connections, redundancy.  I should have Internet access all the time, or at least close to all the time now with the redundancy that these three connections give me.

Addendum: I originally wrote this article about a week ago, but other events pushed it’s publication date back.  During the time since I wrote the article, the flooding occurred in Manila.  During the Manila flooding one Internet provider or another was down at almost any given time due to the weather, but through the entire crisis, I had Internet connectivity at all times because at least one of my three connections still worked.  I must say that during the weather crisis the most reliable connection was the SmartBro Canopy system without a doubt.

Ready for an eye-opener?

Over the last year or more, I have written a lot of times on this site how prices in the Philippines have been going up quickly, how the Philippines is so much less affordable than it used to be.  Feyma has said it too.  Other writers on this site have echoed the thought that the Philippines is becoming more expensive to live in as the days go by.

It happened that a few days ago, I was doing some work on this site.  As part of what I was doing, I was reviewing some articles from the past archives, and I happened upon an article that itemized a number of items, and what they cost to purchase.  The article was entitled “How much is it to buy _____” and was originally published on February 7, 2007, about 2 1/2 years ago.  The title kind of intrigued me, so I decided to go back and refresh my memory, and it was an article listing a number of items, and how much the purchase price was at that time.

Out of curiosity, I started wondering what the difference in price was now, compared to 2 1/2 years ago.  I knew that prices were up, but just wanted to verify how much.  So, I made a list of the items in the article, and I sent one of my nieces out to find out what the prices were today.  Below, you will find a chart listing the items, their 2007 price, their 2009 price, and the percentage change in the past 2+ years.  Are you ready for the results?

Everyday Philippine Price Comparison

Item	2007 Price	2009 Price	% Change
Cabbage	P25/Kilo	P60/Kilo	+140%
Cucumbers	P27/Kilo	P50/Kilo	+85%
White Onions	P50/Kilo	P80/Kilo	+60%
Whole Garlic	P55/kilo	P100/Kilo	+82%
Carrots	P45/Kilo	P60/Kilo	+33%
Frozen French Fries	P109/2 Kg Bag	P180/2 Kg Bag	+65%
Pork Roast	P125/Kilo	P205/Kilo	+64%
Sliced Chicken (Pieces)	P100/Kilo	P134/Kilo	+34%
Ground Pork	P115/Kilo	P160/Kilo	+39%
Pork Chops	P95/Kilo	P160/Kilo	+68%
Beef Roast	P145/Kilo	P320/Kilo	+145%
Tilapia Fish	P90/Kilo	P170/Kilo	+89%
Bed Pillow	P119/2 Pillows	P299/1 Pillow	+502%
Clothes Iron	P299 w/free Ironing Board	P579 no free Ironing Board	+93%
Toilet Paper 2 Ply	P420/48 rolls	P580/48 rolls	+38%
Emperador Brandy 750ml	P60	P67	+12%
Carton of Winston Cigarettes (10 Pks.)	P185	P207	+12%

What do you think about this?  I’ll be honest, even though I knew how prices had gone way up, I was rather surprised at how much they have gone up!  And, these are all common household items that are used every day, or at least regularly.

OK, the only items that have not had significant inflation are the two “vice” items, cigarettes and Brandy.  Not counting those two, the lowest price increase has been 33% in 2+ years, all the way up to a whopping 500% increase!  A number of items are in the +100% range.  Again, this is in about 2 1/2 years.

What do you think?  Is the Philippines still “the cheap place” to retire?  A month or two ago, I had put a Poll on the site, asking why people were interested in living here.  By far, the number one response was because of the low cost of living!  If prices have gone up 33 to 500% in 2.5 years, what will the prices be like 5 years from now?  How about in 10 years?

Will a nice life still be possible in the Philippines a decade from now?  The only way it will still be possible is if something changes.  What will change?

Now, I know for sure, the first thing people will think, and possibly say in the comments is that “prices have gone up here too!”  Well, yes, prices go up everywhere in the world over time.  However, prices have not increased at this rate in the USA, or other developed parts of the world.  In fact, in the past year, much of the developed world has experienced deflation, or prices going lower!

On top of this, in this time of economic decline in much of the world, many of us are earning less money than we did a year or two ago.  If this trend continues, will you still be able to afford the “cheap living” in the Philippines?

What do you think?  Does this information make you think twice, or does it alter your retirement plans?  Me?  I’m here to stay.  I also know, though, that this is something to be watched, and plans must be made.  Business must be altered in some way to earn more income instead of less.  It’s the only intelligent thing to do.

F&B Insider: Leasing Space

F&B Insider is a special column that appears on occasion in the Small Business File. Each week the Small Business File addresses some interesting topic related to entrepreneurship or small business management in the Philippines. F&B Insider columns focus on issues of particular interest to those small business operators in the food and beverage and hospitality industries in the Philippines.

Not many restaurateurs or bar owners start out with their own building in a prime location. In almost all cases, finding an appropriate commercial space to lease is the norm.

When thinking about where to lease a commercial space for your restaurant or bar, you really must follow the timeless adage: location, location, location! But what does that exactly mean for a F&B operation?

Ideally the location should be in an area where there is a high concentration of potential customers during the day and the night. This doesn’t mean your business will be open from breakfast to late evening, but it is nice knowing you have the opportunity to do so in such a high traffic location. You have flexibility to expand your hours if that is the case. The drawback is that rents are usually much higher in such prime locations.

The other option is to locate in a less prime location. This is not exactly a bad idea. In locating in not so prime locations, you get the opportunity to take advantage of lower rents and may face little or no competition in the immediate area. You may not have the visibility you would like when starting up, so sometimes this strategy works best for established businesses who can pretty much move wherever they want, knowing their customers will follow them.

Once you find the right location, you will have to talk to the owner or manager of the space to see if they will accept your offer to open a business in their space. Be prepared to be told ‘no’ if you plan on doing cooking of any nature. Many commercial building owners do not allow food-related businesses to open in their buildings, as there are increased possibilities of fires and/or pest-related problems. This is an extremely frustrating part of the search for an appropriate commercial space, but it is a very real problem.

When you find a space that does allow cooking, then the real negotiations regarding the lease can begin. In general, there are at least twenty important items to consider when contemplating signing a lease for your restaurant or bar. Three of the most common and important considerations are: (1) term of the lease and any renewal options; (2) base rent and security deposits; and (3) provisions for renovation and/or alteration of the space.

The first consideration is very important. There is no point opting to lease a space for the duration of say a year if you intend on spending a considerable amount of money renovating the space to meet the ambiance desired for your restaurant or bar. You really need to seek out landlords who will grant you at least a 3-year lease on the space. Furthermore, you should try and see if you can add in a clause allowing you the option to renew the lease for another 3-years once the initial lease is up.

The second consideration is linked to the first. You will need to negotiate the base rent for the space. Most commercial building owners want a regular monthly rental payment. These are the best kinds of landlords. Try and stay away from any landlord who asks for a base rent and a percentage of sales. You will find it very hard to make any money with leases that take base rent and a percentage of sales. It is not worth the trouble.

In addition to the base rent, landlords will want a security deposit that includes an advance rent portion and a damage deposit portion. There are many landlords who require a 6 month advance rental and a 3 month damage deposit. Try and stay away from such locations as much as possible – I’m pretty sure everyone could find a better use of capital than to tie it up in deposits. Good landlords will want to help you be successful so they get paid regularly. If you find a landlord who asks for 1 month of advance rent and 1 month of damage deposit, consider this a very favorable situation for your fledgling enterprise.

The third consideration concerns what renovations and space alterations will be permitted by the landlord. If you have serious re-design ambitions, you will need to make sure the landlord approves of any changes to his or her building or structure. Don’t be vague at this point. You don’t want to find out half-way through construction that the building owner will not permit you to make certain changes or add certain features to his or her building. If you stick to a basic design, you will encounter few objections.

Good luck in finding the space and lease that is most appropriate for your F&B business. Until next time, Bon Appétit!

More and more expats and OFW’s are getting involved in small businesses that fall under the food & beverage industry umbrella. F&B Insider articles will focus on some of the key issues that can help small business owners gain an edge over other establishments in this very competitive industry.

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