Live in the Philippines

Live in the Philippines helps expats with visas, moving and other services regarding the Philippines.

Inspiring and Frightening

Expats / by

Recently I met an American fellow who has been living in the Philippines for only a few years now.  He is a very nice guy, and he had a few interesting stories to share with me.  I want to relay one of his stories today, but for his privacy I am changing his name, and a few details.  I don’t want to make his exact story public, since he did not give me his permission to do so.  The details I will change really will not impact his story at all, the changes will just make it where my new friend cannot be identified.  I’ll call my new friend Rocky.

Rocky came to the Philippines to live here about 3 years ago.  He has gone through highs and lows here.  Currently he is somewhere in the middle, but headed on the upward trajectory.  Rocky’s story started when he first arrived in Cebu in 2008.

Rocky brought a nice wad of money with him from the States.  He is not rich, but he had enough to live a nice life in the Philippines, at least for a couple of years.  Much like me, Rocky wasted a lot of money when he first arrived.  After only a few months, Rocky was facing financial problems.  In fact, Rocky had only a very small amount of money left, believe it or not, just P2,000, about $50 or so.

Rocky was stuck between a rock and a hard place.  He didn’t even have enough money to go back to the States.  What would he do.  Well, Rocky had some knowledge that he thought he might be able to use to his advantage.  There was a snack food that he knew how to make which was really delicious.  Rocky decided to start making this snack food and selling it on the streets of Cebu to earn some extra cash.  It was difficult, but what other choices did he have?

Sales were super, and Rocky’s fortunes started to pick up.  After only a month or so, Rocky had earned enough that he opened a shop to sell his snacks.  Within a few more months, Rocky had 4 shops open and selling his product!  Things were really taking off, and imagine, all of this started on an investment of only P2,000!  Amazing.

Since Rocky is a foreigner, he cannot legally own his business.  He had a girlfriend in Cebu, and he also took on a business partner, a Filipino.  Between Rocky, his partner and his girlfriend, they all worked together and made a go of Rocky’s snack business.  Money was rolling in to the point that after just 2 years, Rocky had saved P10 Million from the venture!  That is when catastrophe struck.  Rocky’s girlfriend and his partner become a bit too friendly with each other.  Soon, they teamed up and stole everything Rocky had.  They got the P10 Million (or at least nearly all of it), and since the snack shops were all in the partner’s name, they took those too and kicked Rocky out.

Rocky left Cebu almost dead broke again.  He wondered a bit around the Philippines and a few months back he landed in Davao.  He liked it in Davao and decided to stay here.

In the 5 year history of this site, I have written many times, as have other writers on the site, about the dangers of buying property or starting a business under somebody else’s name.  Now, if you have a long term marriage I have no problem with starting a business under your wife’s name, or buying a house in her name.  I mean, that’s what trust and the bond of marriage is all about.  But, if we are talking about a girlfriend, or some girl half your age whom you just married last week… well, I would not advise that, and if I were you I would not feel overly secure in such an arrangement.  Just as Rocky found out, that girlfriend can literally take everything you own!

Getting back to Rocky’s story…  as I said, Rocky decided that Davao is the right place for him.  He found a new girlfriend here.  He just recently opened a new snack shop here selling his specialty snack product.  Sales are good, there is a lot of talk on the streets about Rocky’s place.  Plenty of customers.  Of course, Rocky also has a new partner for the business.  Seems like everything is set up just like last time.  Hmm….

We all have failures in life, but it’s a good thing if we can learn our lesson from our failures and learn how to protect ourselves from having the same catastrophe strike us a second time.

Good luck Rocky!

Reader Interactions

Comments

  1. Hi Bob, Wow that is quite a story. Good for him to be able to survive that ordeal! As far as those loser “partners” in Cebu, my wife says their Karma will be bad. What goes around comes around. Thanks for writing this article because it will reinforce what you have been saying for years. As for me and my situation, I will have my own money in retirement, and I have no desire to have any kind of business. My wife already has some business interests and that is her thing. I keep out of it. I don’t want to own anything in the Philippines anyway. If her business makes a little profit and can employ some workers, that is great. Also, I am not sure that I can commit to living in the Philippines full time. I love the Midwest, and I think I would miss football too much, ha ha. But I think I could be happy in either place. Maybe I will split time between both places. I am keeping my options open. I still have 4 years before retirement. Keep up the good work.

    • Hi Stevo – I agree, quite a story. When Rocky told me, it was quite shocking. However, I found Rocky to be sincere and i believe his story to be true. In fact, as I listened, I found that what he said was such a perfect example of the things I have been saying here on LiP for a long time.

    • Hi David – The thing that makes me worried for Rocky is that he has basically gone from being ripped off, and now following the exact same path again. Seems that he could easily go through the same problems.

      • Bob,

        Because of the lack of any other income like pension/SS, he is forced into that position. He has no other way to make an income. Of course he should have budgeted his money when he first arrived. Very inspiring story, hopefully with luck his new g/f will be different. Thanks alot for sharing this story. Have a nice day.

  3. Hi Bob,
    Interesting story, also a good warning!

    In my past, i’ve been involved in a business partnership in the West, it failed along with friendships lost, never again, no where.
    In hindsight i should have taken notice of the old adage ” A Business partnership is the worst ship that ever sailed”.

    Regards,
    Chas.

    • Hi Chas – I agree with you. I am not a good person for a partnership either. I like to do things my way. With a partner, you have to agree and do things the way that you both agree to. That would never work for me.

  4. He should consider using Feyma in Davao. I have a number of businesses in the Philippines and my partners are all serious businessmen and trustworthy to a fault. I have not had a single bad experience in 15 year of having my own businesses there. I also have developed many great relationships and without any bravado I can say it would be terribly unwise of anyone to pull a “Rocky” on me. Rocky has hopefully learned a good lesson and did a better due-diligence of current partners.

  5. Well, maybe this time around “Rocky” will give himself a paycheck and keep money for himself in a separate account. It seems that is where he went wrong before. You can have a partner but perhaps the financier should be the one who has access to the money while the partner does whatever you need them to do. That seems to be one of the areas where he went wrong in. Of course the other obvious areas, (girlfriend, local Filipino, trusting blindly…..) that could be a long list.

    Thanks for the reminders though Bob. And thank goodness I have my Filipino wife and her family. We have made it through six years and she has not killed me in my sleep yet! 😀 Though I am sure I have made her mad a time or two. hahahaha *Yikes*

    • Hi Darin – I am also happy to have a great wife that I can rely on. I would advise being pretty careful with family, though. While I trust Feyma’s family 100%, I have had business dealings with some family members where they did some pretty careless things that ended up ruining a business. So, trust is one thing, but there can still be problems.

  6. Well Bob..interesting story……maybe Rocky is like a cat and has 9 lives so he is on life no.2 right now so maybe he needs to get to number 7 before he understands that something needs to change……My self I would never start or have any kind of business with a girl friend period..Girl friends are to have fun with and get to know and stuff like that……they make poor business partners. I have seen people here in the USA start business with a girl friend and funny seems like the story kinds goes like your story here a lot of the time in one way or the other…Also in fact to me any partner in business sooner or later will become a big headache….

    • Hi Dan – I just want to clarify that he did not start the business with the girlfriend. He had a different business partner. The girlfriend, I believe, helped out with the business, but was not involved in the ownership. The problem came when the girlfriend and the partner teamed up against Rocky.

  7. Oh ok Bob..My missunderstanding on that……starting a business with a girl friend……but maybe he still needs to learn that a business partner more often than not is full of problems sooner or later..not matter where you are…..

    • I agree with that, Dan. I don’t like going into business with a partner. The problem that Rocky faces, though, is that he has no choice. Since he is not a Philippine Citizen, and not married to a Philippine Citizen, the most that he an own of any business here is 40%.

      • Exactly, Bob, he had no choice. That’s what I am thinking about also. He is broke, he had no money to get back to the states, and the only thing he had was his unique product. He had to make money somehow, but he could not legally own a business to market his product. Regardless of past history, he has no other choice but to take another chance. He has a 50/50 chance to make it work with the new girlfriend this time around.

        • You can always get back to the States, though, even if you have no money. If you are in dire straits like that, the US Embassy will give you a one way ticket home, which you must pay back later.

          But, surely he was in a tight box, and he sure clawed his way out. Banking P10M in two years is a very impressive feat, especially when you consider that he had only P2k to his name!

  8. Bob;
    In the photo above the caption was “Unfortunately, Rocky took a bath” In the Navy we would have said; “Rocky got hosed”. My wife is my partner and the only partner I would ever trust.
    I think Rocky might get hit with that fire hose once more.

  9. very good posting Bob

    but why do thay alway take u down i know it is not always the girl from the phill it can be a girl from here or there but there is all way that one that will take u down and all i tis doing is giving all the good filipina girls a bad name like my self mate i was married to a bad one the first time i was with her 4 years and now i am married to a new filipina a good one it as take me a lot off years to get my famliy to under stand she is not like the first one and more this gos on mate the hard it is for us from the west to find a good filipina girl to trust and love to death do we part as there is all way that one that will try and take u down for money…….peter martin tassie

    • Hi Peter – Thanks for stopping by and leaving a comment. I guess it’s kind of like the news – only the bad news gets reported. Good stuff that happens is not news and doesn’t make any headlines! 😆

  10. If what he told you is true Bob, then Rocky will bounce back…knowledge and experince is the golden key!

    • Hi brian – I felt that Rocky was sincere, and being honest, although is story was almost unbelievable to me. But, I just got the feeling.

      Some people, though, are knowledgeable in one area and ignorant in other areas… which could cause problems for Rocky, if he is like that.

  11. Bob:

    You know, when I read complaints from people about the laws regarding foreigner restrictions on business ownership, I have to laugh. They are usually indignant, or droning on an on about corruption, and so on.

    What I find quite curious is when people are retiring here, and complaining about the laws, is where else they think that they can start 100% foreign-owned businesses? Virtually all countries in Asia, except Singapore / HKG / Macao, have very strict restrictions on foreign-owned business. The laws in Thailand, for instance, are even stricter than the Philippines, requiring minimum capital investments of 2 million baht in the case of foreign ownership, along with 7 (Seven!) Thai partners. And the foreigner needs to get a work permit to work in the business.

    Everyone talks about retiring in Mexico… You need two Mexican partners there, too, and you cannot work in the business in “visible” tasks (If you own an ice cream shop, you can keep the books, but not scoop a cone for a customer).

    My point is that for those who complain, where do you think your plans will be allowed?

    Three other common retirement destinations I know

    • That said, involving a girlfriend or acquaintance in a business here is just throwing money away… Admirable that your friend has perserverance, but he needs to learn from past mistakes.

    • Hi John – I think that the reason many feel so indignant is because we come from countries where foreigners can own business, property, etc. Also, a lot of Americans are pretty ignorant when it comes to life and laws overseas. Don’t you think?

      • I would agree, Bob. Important to remember that in most countries, a foreigner will not be allowed to simply stroll in and make money on the local economy. In Mexico, for instance, if you do it legally, a government commission is required to review your business plan in advance. Part of what they look for is impact on other businesses in the area. If they think you will take business away from local businesses, then permission denied… no appeal. No such requirement here, I believe.

  12. My gut feeling is that Rocky’s story is only half of the story.
    People are usually not that bad (his business partners) as presented in the article.
    There must have been other reasons why all of this happened and Rocky is probably too embarrassed to talk about it.
    Ten million pesos do not get stolen so easily.

    • Hi Robert – P10M would be very easy to take in this scenario. If Rocky owns 40% of the business and Mr. Partner owns 60%, and there is P10M in a bank account under the business’s name, Mr. 60% just fires Mr. 40% and it’s done. Of course, there would be a bit more to it in actuality, but it would not be difficult.

      • Hopefully, Rocky will put aside some of the savings into his own account. Like someone mentioned above, need to pay yourself a salary or dividend out income.

        Also, those special snacks must be really good to save up p10 million. I want some!

      • If the 60 percent partner fires the 40 percent partner, shouldn’t the 10M in the bank under the company’s name be split between the two 60/40 as well?

  13. Bob,
    That looks like a “CAMOTE CUE” ( sweet potato)? That’s one of my favorite snack food in the Philippines and wow! to earned almost PHP10 million was really impressive he must have some unique knowledge and skills to do that but i hope he will be more careful this time whom he trust.

  15. Rocky lost all of his money twice (the first time before he started the business) so obviously he has some financial management issues.

    As for the profits I wouldn’t be surprised if Rocky let his partner set up the bank account for the business with the partner as the only controlling party.

    If he is here on a tourist visa he cannot legally work here even in his own business. In that case he cannot collect a salary as some have suggested.

    My guess is that he will lose out again unless any new partners are honest people.

  16. Hi Bob
    Interesting story. Though it seems to me to make a profit of 10m pesos in 2 years and when you have to include rent, equipment, labor and cost of ingredients to sell only one dessert, that means each store is making 100k plus per month in profit. What he needs to do is to transfer the money into his account or use the money to buy a condo in his name or just something to have the profit controlled only by him. Otherwise he is setting himself up for another potential disappointment. Never a good idea to dangle millions of peso in front of a girlfriend when all she has to do is take it and it will be very legal for her to do so.

    • Hi Neil – The kind of places that Rocky rents, I doubt if he pays more than a couple thousand a month in rent. Equipment is probably under P2,000 per store too. His operation is amazingly cheaply set up, but the quality of his product is super.

      Depending on the legal ways that the business is set up, he may not be able to pull much money out, you just don’t know without seeing the papers, I suppose.

  17. Bob,

    Well, there’s one way to apply a BS detector to Rocky. Hit up his operation in a year and ask him about sales. If he tells you he’s making millions and issues you anything but a 12% VAT receipt. Either, 1) he’s full of it and totally exaggerating the income (VAT jumps from 3% to 12% when you hit 1.5M in gross sales) or 2) he’s underreporting the income to the BIR. Either way, he’s not a straight shooter & I’d steer clear of that cat. At least for business.

  18. I believe that the Philippines would benefit from encouraging foreign retirees bringing capital to allow them to remain in full legal control of their business. They would stimulate the economy and bring more employment. The xenophobic fear to be “overrun” is just counterproductive.
    Especially nationals from countries that allow Filipinos to own property over there should have the same reciprocal rights in the Philippines.
    As it is, you need a good lawyer to set up a structure where a foreign business owner retains control over his business.

    • Hi Joop – I agree that the Philippines, as a country, would benefit from allowing foreigners living here to own and operate a business. I don’t think we’ll live to see it happen, though.

  19. Given the 60/40 ownership issue of foreigners, I would think there would be other ways besides “ownership” of a business to protect yourself. The foreigner could give himself a bigger salary than the native investor, for example. Whether its because of ownership or from salary, as long as cash is going into a personal account its all the same. Of course, if employment contracts aren’t enforceable in the PHL, this suggestion wouldn’t work.

      • Bob, good point. Is that the distinction between the foreigners who “own” the business primarily in their spouses name? Since they are ownership and not technically employees, they don’t need a work permit to do whatever they do, whether bar/restaurant/hotel. This is where it would be wise to hire a local lawyer that you can trust to run the paperwork and navigate the legal maize.

        • Hi Brent – I think it is a wise idea to get a good lawyer to make everything legal. This is all one of the reasons why I like doing internet businesses… I can own it, run it myself, and not worry about local rules, because my business is not here in the Philippines.

  20. Hi Bob – Should Philippines let foreigners own business here?

    Anyway, Good luck to Rocky! Lets hope it’s not de javu again. It sucks when somebody steals something from you.. the worst part, is if it’s somebody you thought you could trust. Choose, partner or g/f wisely.. he he.

  21. There’s a saying, “Fool me once, shame on you. Fool me twice, shame on me.” If he doesn’t learn from his past mistake, oh well.

    I’m very curious about his product. I know you don’t want to reveal his identity but couldn’t you just “whisper” what the snack is? 😉

  23. hi bob i dont understand the idea behind not letting foreighners own buisness or property in the philipines ,to m this is a backward way to look at advancing the country i can understand the idea of haveing major companies setup and own vast housing estates or manufacturing companies but shorley they can allow foreighners to at least own property in there names and shurely a small buisness, when my wife and i decided to buy land on samal island i started to help pay for it but when i realized that i would never own it i discused it with her and said that it wasnt very fair that i help pay for it and will never have a stake in it anyway she has both blocks now anyway so she can do what she likes with them ,here if you buy a property together you have an equal share in it i just think it is backward and must deter investment in the country ,as for rocky can he get them for stealing his product ie the snack recipe maybe he can give them some greif after he gets back on his feet but i would be very hesitant to involve another partner in the buisness unless there is an iron clad egreement
    chris

    • Hi chris – I can’t argue, in fact I agree fully. I believe that foreigners should be allowed to buy property and own a business here. Filipinos can do both back in the States where I come from, and I presume in Australia where you are. But, Filipinos believe that a huge rush of foreigners would come here and buy all the property from the Filipinos, something that I believe to be a false belief. I don’t think it will ever change, though.

      As far as an iron clad agreement… not sure that such a thing really exists here.

  24. Any harm letting us know where his new place is in Davao. I mean he does sell a product that he wants people to buy so at some time down the road his story or his products story will become public knowledge hopefully for the better. Just curious why it’s such a secret about the product I mean.

    • As I have clearly said several times now… I will not identify him. If he reads this, he will know it is about him, and if he wants to identify himself, I have no problem with that, but I will not do it.

  25. 60/40 partnership is not legal in Rocky’s case as his is a small retail business which can not have any percentage of foreign ownership. If Rocky would wholesale he could have a 60/40 and if one day he had capital USD200k he could actually own 99.9% of the wholesale business the 0.01 is for the other 4 directors which he could have sign a beneficiary’s trust agreement for protection.