The Katalyst Chronicles

High risk, High return 🇵🇭

For many foreign investors, the Philippines can feel like a contradiction.

It is a country where opportunities can be massive, but so are the headaches. A place where a growing economy collides daily with red tape, bureaucracy, and regulatory landmines.

That contradiction was laid bare in a viral X post by a Japanese entrepreneur who has spent the last 12 years doing business in the Philippines.

“Business in the Philippines is the epitome of ‘high risk, high return,’” he wrote.

The businessman, who goes by KoShima on X, shared a brutally honest reflection on the realities of operating in the country — praising the Philippines’ growth potential while openly criticizing the challenges foreign investors face.

According to his profile, KoShima runs recruitment businesses in the Philippines and Thailand and regularly posts about Southeast Asian business culture, entrepreneurship, and productivity.

A YOUNG, FAST-GROWING MARKET

Among the Philippines’ biggest advantages, the entrepreneur pointed to its demographics.

“The biggest attraction of the Philippines is the market’s growth,” he wrote.

He noted that the country has a population of around 120 million people with an average age of just 26 years old — a stark contrast to aging societies like Japan.

“While other countries are sinking due to population decline, this is a rare market even from a global perspective,” he said.

He also emphasized the country’s continuing “population bonus,” with around two million people added to the population every year.

For businesses looking at long-term expansion, he believes this creates enormous potential.

“For the foreseeable future, the Philippines will continue to enjoy its population bonus period,” he added.

“BLUE OCEANS” STILL EXIST

Another major advantage, according to the entrepreneur, is that the Philippines remains relatively underpenetrated by foreign companies compared to other Southeast Asian markets.

“Compared to other Southeast Asian countries, the Philippines still has relatively few competing foreign firms,” he wrote.

Because of this, he said many industries remain “blue oceans waiting to be explored.”

He cited Japanese retail giant Uniqlo as an example, noting that the Philippines reportedly has the brand’s largest store network in Southeast Asia.

Among his own clients, he claimed several companies see their Philippine operations outperforming branches elsewhere in the region.

“Many companies report that their Philippine operations perform the best in Southeast Asia,” he said.

FILIPINO TALENT AS A COMPETITIVE EDGE

The entrepreneur also praised the country’s workforce, particularly its English proficiency and openness to foreign companies.

“With fewer foreign firms, there’s less competition in the hiring market,” he wrote.

“The risk of poaching is low, and turnover and salary increase rates are modest.”

He added that English fluency is so common in the Philippines that it does not automatically inflate salary expectations.

“Since everyone speaks English, it’s hard to command a salary premium just for ‘speaking English,’” he explained.

“On top of that, the people are bright and open-minded. This is truly a blessing.”

“ADMINISTRATIVE PROCEDURES ARE A NIGHTMARE”

But while the entrepreneur praised the country’s strengths, he was equally blunt about its weaknesses.

“When doing business in the Philippines, the biggest stressor is administrative procedures,” he wrote.

“They’re just so slow. They don’t move forward.”

He described dealing with permits and government paperwork as deeply frustrating, saying businesses are often left with little visibility into what is happening behind the scenes.

“You often have no idea what’s happening or how things are progressing,” he said.

Even something as simple as a company name change, he claimed, took his firm an entire year to process.

He also alleged that corruption remains a persistent concern.

“You’re sometimes hit with demands for bribes, and if you don’t pay, your application gets pushed to the back burner,” he wrote.

“The tax authority (BIR) is especially brutal.”

STRICT RULES FOR FOREIGNERS

The entrepreneur likewise criticized the Philippines’ foreign ownership restrictions.

“In many service industries, foreign ownership is capped at 40% max,” he explained.

“You can’t hold ownership rights.”

He added that unlike in some neighboring countries, certain workaround systems are illegal in the Philippines.

“So, your options boil down to either finding a joint venture partner the legit way or biting the bullet on takeover risks by borrowing a Filipino’s name,” he wrote.

“Both paths come with seriously high hurdles.”

CULTURE SHOCK IN THE WORKPLACE

Another major challenge, according to the businessman, involves labor disputes and cultural differences in management.

“The Philippines is a contract-based society, a litigious one at that,” he said.

“The Japanese notions of ‘assuming good faith’ or ‘reading the air’ don’t fly here.”

He warned that Japanese managers who fail to adjust can quickly burn out.

“Differences in perception lead to frequent labor troubles,” he explained.

“Japanese managers without any immunity can burn out in zero seconds flat.”

“THE CHAOS ITSELF CREATES OPPORTUNITIES”

Despite the difficulties, the entrepreneur ultimately argued that the Philippines remains one of Southeast Asia’s most promising — and misunderstood — business environments.

“The market is on a steady upward trajectory, and you can hire talented people too,” he wrote.

“Foreign regulations are tough, but that’s the case for competitors as well.”

In fact, he believes the same restrictions that frustrate investors can eventually become an advantage.

“Once you’re in, those regulations themselves become a barrier to new entrants,” he explained.

“It’s a setup where the chaos itself creates opportunities.”

For many Filipinos reading the thread, the post struck a familiar nerve: the Philippines as a country overflowing with promise, yet perpetually wrestling with systems that make success harder than it needs to be.

And yet, for entrepreneurs willing to take the gamble, that very unpredictability may be exactly what makes the rewards worth chasing.

Another historic first for a Pinay👏🇵🇭 🇵🇭

A Filipina leader in Europe’s tech and innovation space has been conferred one of France’s highest honors, marking what Philippine officials call a historic first. | via ANC 24/7

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Always an honor sharing insights to fellow women, especially women in my hometown 🤍