Business practicalities in the Philippines

Land and property rights

Private land ownership is restricted to Philippine citizens or to companies that are at least 60 per cent owned by Philippine citizens. As of 2026, foreign investors can now access 99-year leases to use private land. Leases must be registered with the Department of Trade and Industry (DTI) and relevant activities must begin within 3 years. Foreigners can own condominium properties outright if no more 40 per cent of the units in the project are owned by foreigners.

Intellectual property (IP)

The Philippines has ratified the Paris Convention, the Berne Convention, the Madrid Protocol, the Rome Convention and the Patent Co-operation Treaty, which collectively recognise equal rights for both foreigners and Filipinos when registering trademarks and copyright. However, in practice the Philippine IP environment is challenging. While draft amendments to the IP Code would strengthen IP protections, areas of ongoing concern include licencing, technology transfer and digital protections.

The Intellectual Property Code (IPC) legislates intellectual property protections, which are enforced by the Intellectual Property Office (IPOPHL). The Bureau of Customs (BOC) is also a relevant enforcement body, particularly given its increased vigilance in identifying and seizing counterfeit goods entering and leaving the country. The Optical Media Board regulates the mastering, manufacture or replication of video and audio products and combats piracy.

There are five main types of intellectual property in the Philippines: patents, utility models, industrial designs, copyright and trademarks. The following mechanisms are used for registering trademarks, patents and copyright:

A schedule of fees and application information can be found on the IPOPHL website at ipophil.gov.ph.

Violation of IP and enforcement options:

IP infringement is often not prioritised in the Philippine judicial system. IPOPHL is working to improve the enforceability of IP rights and has established a joint dispute resolution procedure to facilitate IP dispute mediation and arbitration with the World Intellectual Property Office (WIPO) Arbitration and Mediation Centre.

Import duties and tariffs 

Import duty rates come in three categories: ordinary rates, preferential rates and special preferential rates. 

• Ordinary rates apply to goods imported from countries outside the WTO system. Rates range from 0 to 65 per cent.
• Preferential rates apply to goods from countries that have MFN status with the Philippines. MFN rates are applicable to goods imported from any WTO member state.
• Special preferential rates apply to goods from countries that have a preferential trade agreement with the Philippines. Australian businesses qualify for special preferential rates through the ASEAN Australia-New Zealand Free Trade Area (AANZFTA) and the Regional Comprehensive Economic Partnership (RCEP).

The Philippines applies higher tariff rates (between 20 to 50 per cent) on certain sensitive agricultural products, including livestock and meat products, sugar, vegetables and coffee. Some agricultural commodities are subject to minimum access volumes (MAV), but these represent less than 1 per cent of all tariff lines.

To find the tariff rate for specific goods, visit the Department of Foreign Affairs and Trade’s FTA Portal at ftaportal.dfat.gov.au.

The Tariff Commission in the Philippines manages all tariff schedules. Its website offers users a tariff finder and includes information that corresponds to AANZFTA. For more information visit finder. tariffcommission.gov.ph.

Calculations and payments 

The Philippines follows the WTO Valuation Agreement on imported goods. Import duty is calculated by multiplying the imported good’s dutiable value by the corresponding import duty rate. The dutiable value of imported goods is typically based on the cost, insurance, and freight (CIF) level.

There are a range of different charges for bulk, containerised and break-bulk cargo. Importers and exporters should obtain professional advice from freight and logistics companies. For more information, visit the Philippine Ports Authority website at ppa.com.ph.

Export duties

There are no export taxes in the Philippines, except for a 20 per cent tax on logs.

Import and export regulations

DTI and the Department of Finance are responsible for regulating trade in the Philippines. Imports are classified into four categories:

• Free Importation and Exportation
• Regulated Importation and Exportation
• Restricted Importation and Exportation
• Prohibited Importation and Exportation 

Agricultural products may be imported, subject to quarantine requirements. Importers must obtain a Sanitary and Phyto-Sanitary (SPS) Permit from the:

• Bureau of Animal Industry (live animals and meat)
• Bureau of Plant Industry (fruits and plants)
• Bureau of Fisheries and Aquatic Resources (marine and aquatic products)

The permits are also validated by the Department of Agriculture. Medicines and pharmaceuticals receive permits and clearances from the Food and Drug Administration (FDA).

Australian fruit imported into the Philippines is subject to cold disinfestation treatment, which is conducted either in-transit or pre-shipment (onshore in Australia).

Processed foods, beverages, personal care products, medicines and pharmaceuticals must be registered with the Philippines FDA by the customer or appointed importer/distributor prior to export. Registration takes approximately four months.

Some imports that attract low tariffs are capped in line with MAV rules. These include pork, poultry, potatoes, corn, sugar and coffee. Rice attracts a specific tariff cap of 15 percent. The allocations are made on a first come-first served basis, issued on an annual basis, with higher tariffs applying to goods additional to quotas.

The Bureau of Internal Revenue (BIR) in the Philippines is responsible for imposing a wide ranging tax regime on businesses and individuals that incorporates income taxes (corporate and personal), turnover and indirect taxes (VAT and specific business tax), as well as property tax, stamp duty, excise, customs duties and more.

The Ease of Paying Taxes (EOPT) Act was signed into law in 2024. The EOPT Act introduced reforms intended to protect and safeguard taxpayer rights, modernise tax administration by providing mechanisms that encourage easy compliance, and update the Philippine tax system and adopt best practices.

This section provides an overview of the primary taxes that Australian businesses can expect to face when doing business in – or exporting to – the Philippines. But professional advice from firms operating in the Philippines is vital for understanding tax rules specific to a business. Not all applicable taxes are covered in this guide, and the information provided is of a general nature.

Table 1: Overview of the Philippines' taxes for businesses

Corporate Income Tax (CIT)

Businesses are subject to a corporate income tax (CIT) rate of 25 per cent (Table 1). A domestic corporation is subject to tax on its worldwide income. A resident foreign corporation is subject to tax only on income from Philippine sources.

Non-resident foreign corporations are taxed on income received from Filipino sources at a CIT rate of 25 per cent. Interest on foreign loans is taxed at 20 per cent. Dividends from domestic Filipino corporations are subject to withholding tax of 15 per cent provided there is no relevant tax treaty arrangement with the country in which the corporation is headquartered.

The Philippines has signed double taxation avoidance agreements with over 40 countries, including Australia. These treaties eliminate double taxation by identifying exemptions or reducing liabilities in the Philippines for Australian businesses and residents

Personal income tax 

Tax liability is determined by residence status. An individual who is present in the Philippines for at least two years is a resident alien. An individual who stays in the Philippines for less than two years is considered a non-resident alien. There are two classifications of a non-resident alien:

• engaged in trade or business in the Philippines
• not engaged in trade or business in the Philippines.

A non-resident alien engaged in trade or business (NRAETB) is one who stays in the Philippines for an aggregate period of more than 180 days during any calendar year.

If the individual stays in the Philippines for an aggregate period of 180 days or less, the individual is considered a non-resident alien not engaged in trade or business (NRANETB).

The taxable income of citizens, resident aliens and NRAETB is defined as gross compensation and net business income less personal allowances. The taxable income of NRANETBs is their gross income.

Resident citizens are subject to Philippines income tax on worldwide income. Non-resident citizens and aliens are subject to Philippines income tax on their Philippines-sourced income only. For residents in the Philippines, and non-residents compensated from the Philippines or who are self-employed, the tax rates in Table 2 apply.

Table 2: Annual taxable income

Indirect taxes

Value-Added Tax (VAT): VAT is a broad-based consumption tax applied to goods and services bought and sold in the Philippines. All companies and individuals conducting business in the Philippines must pay VAT on applicable goods and services.

The VAT rate is 12 per cent, based on the gross selling price of goods or properties sold, or gross services receipts. VAT on imports comprise their value determined by the BOC for tariff and customs duties, along with any applicable excise taxes and additional charges.

Some goods and services are exempt from VAT. These include export sales by VAT-registered persons, agricultural and marine food products in their original state, imports of professional instruments like work gear or tools, goods and services sold or leased to senior citizens and persons with disabilities, and some prescription drugs.

Excise taxes

Excise taxes apply to certain imported goods and services, including manufactured oils and other fuels, automobiles, and sweetened beverages. Rates range from 4 to 60 per cent.

Local government taxes

Local governments impose taxes based on the gross sales of the previous year and real property taxes, which are levied annually based on a fixed proportion of the value of the real property. The local business tax rate will depend upon the local tax ordinance enacted by the concerned local council. Typically this does not exceed 3 per cent.

Auditing and accountancy play a vital role in enhancing transparency and accountability in a business, especially one engaged in a foreign market. It increases business performance by identifying risks and highlighting areas for improvement.

Accounting standard

Local and foreign businesses are required to comply with the Philippine Financial Reporting Standards (PFRS) when recording financial transactions. These standards differ for large and publicly accountable entities, and small and medium-sized entities.

Australian businesses with Philippine operations often manage two accounting records, one based on PFRS and the other on Australian Accounting Standards (AAS).

The Philippine Financial and Sustainability Reporting Standards Council (FSRSC) and Professional Regulatory Commission’s (PRC) Board of Accountancy – the national accounting standard-setting bodies – have committed to full adoption of the International Financial Reporting Standards (IFRS)

Statutory audits

The following companies are required to complete annual statutory audits:

• Corporations with total assets or liabilities of PHP 600,000 (AUD 16,320) or more
• Branch offices or representative offices of foreign corporations with assigned capital equivalent to PHP 1 million (AUD 27,199) or more
• Regional Operating Headquarters of foreign corporations with total revenue equivalent to PHP 1 million (AUD 27,199) or more

Books and records

Accounting records must be kept in English.

The Philippine Peso must be used as the accounting currency. Companies may seek approval from the Securities and Exchange Commission (SEC) and the BIR to elect another functional currency for use in accounting records.

Publicly listed companies and large non-listed companies covered by Section 17.2 of the Securities Regulation Code are required to prepare sustainability reports, subject to board review and approval, and submit these to the SEC.

The Philippine financial year is the calendar year (1 January – 31 December). Companies can elect a different 12-month reporting period with approval from the BIR. Companies must maintain their accounting books and records for three years and any records used in preparation of their accounting books for 10 years.

Quality control

Auditors in the Philippines are regulated by the PRC’s Board of Accountancy (BOA) and the Philippine Institute of Certified Public Accountants (PICPA).

The BOA is tasked with registering, accrediting and licencing accountants and auditors, investigating violations of rules and regulations and suspending or revoking Certificates of Registration.

The PICPA is responsible for maintaining high professional and ethical standards. To be qualified as an auditor, an individual must be both registered with the BOA and a member of the PICPA.

The SEC is a member of the International Forum of Independent Audit Regulators and the ASEAN Audit Regulators Group.

Doing business in South Korea will often require employing local and foreign workers. Understanding South Korea’s labour market regulations, recruitment methods and country-specific management styles is critical to building and supporting an effective team.

Labour market

Skill level: The Philippines has a highly educated workforce, relative to many of its immediate Southeast Asian neighbours. As one of the country’s official languages, English is widely and well-spoken and the language of instruction in schools. These factors make Filipino employees highly attractive to large multinational corporations operating in the country.

The services sector is the main employer in the Philippines, employing 62.4 per cent of all workers. Agriculture employs 20.7 per cent and industry 16.9 per cent. The 2025 unemployment rate was 4.4 per cent.

Employment contracts: Five types of employment contracts exist in the Philippines.

Minimum wage: The minimum wage is determined by work type (agricultural or non-agricultural) and region (Table 3). Rates are set by the Regional Tripartite Wages and Productivity Board and adjusted according to variations in cost of living across the Philippines. Salaries and wages are generally paid on a fortnightly basis.

Human resources and employment law: The Philippine Department of Labor and Employment (DOLE) is responsible for enforcing all labour and employment regulation in the Philippines.

The government recognises the right of workers to form labour unions and engage in collective bargaining activity for wages and other benefits. Labour union protests are relatively rare in the Philippines and do not present a significant burden for businesses.

Working hours: An eight-hour workday is the generally accepted standard in the Philippines. Most offices observe business hours beginning between 8am and 9am and ending around 5pm. This tends to differ in the BPO sector and other shift work environments.

Holidays: All employees in the Philippines employed for at least one year receive paid holiday leave of five days. It is customary for employers to provide 15 days of annual leave per year.

Overtime: Overtime is classified as any work over eight hours in a 24-hour period, regardless of whether the work falls over two calendar days.

For work performed between 10pm and 6am, employees must be paid at a rate that is at least 10 per cent greater than the regular wage for that job.

The 13th month pay provision in the Philippines is similar to a Christmas bonus in other countries. All government and private sector employees have the right to receive a 13th month of pay with employers obliged to make the payment no later than December 24 each year. All employees up to top management are entitled to 13th month pay. The 13th month pay is calculated as total basic salary × employment length ÷ 12 months.

Sick leave: Employees are entitled to sick leave as certified by a doctor. There is no minimum number of sick leave days. Sick leave policies are at the discretion of employers or to be negotiated between employer and employee in collective bargaining agreements.

Social, health and unemployment insurance contributions: Businesses operating in the Philippines are required to register with social institutions, such as the Social Security System (SSS), Home Development Mutual Fund (HDMF) and Philippine Health Corporation (Philhealth). Social security contributions are deducted from employee salaries.

There are maximum monthly deductions for SSS, plus mandatory provident funds under the Workers’ Investment and Savings Program (WISP), HDMF and PHIC.

Employers must contribute equivalent amounts to the employees for HDMF and Philhealth as well as to the Employees ‘Contribution Program (ECP). 

Maximum monthly deductions are as follows:

Ending employment: An employer may terminate an employee for just cause, which includes serious misconduct, wilful disobedience, gross and habitual neglect of duties, fraud or wilful breach of trust, and for committing a crime. Business reasons also qualify as a means for terminating employment, including necessary labour or cost savings. If the termination is for an authorised cause, the employer must give the employee and DOLE 30 days’ notice.

Severance pay: Severance pay is usually paid at the rate of one month’s salary for every year of service. If the termination is required to prevent losses or the closure of the business, the severance pay is half of one month’s pay for every year of service, or one month’s pay, whichever is greater. If the business is closing due to serious losses, it can apply for an exemption from providing any severance pay to its employees.

Recruiting staff

Online advertising: Advertising through job portals such as LinkedIn is a popular tool to recruit talent in the Philippines, particularly for professional, technical, sales and managerial roles. Major job portals include:

• LinkedIn – Over thirteen million members in the Philippines.
• Indeed – Is said to be the most popular employment website in the Philippines in February 2026.
• Jobstreet – Is said to be the second most visited employment website in the Philippines in February 2024.
• Seek – In February 2024, Seek’s fifth highest web traffic came from the Philippines, the only Southeast Asian country ranking in the top five.
• Jobpraido – Global site that also lists jobs in the Philippines.

Executive search: For a more tailored search, particularly for senior executives or talent with niche technical skills, a recruitment or executive search firm may be more appropriate. International firms such as ZMG Ward Howell, Monroe, Michael Page, Curran Daly and Horton have offices in the Philippines.

Work permits: Employers intending to hire foreign nationals in the Philippines are required to secure working visas from the Bureau of Immigration and Alien Employment Permits (AEP) from DOLE.

The most common type of work visa is a pre-arranged employment visa known as the 9(g)-work visa. It allows the foreign employees to work and stay in the Philippines for the duration of the employment contract and as approved by the Bureau of Immigration.

Generally, all foreign companies establishing a presence in the Philippines must open a local bank account. The Philippine banking system is continuing to evolve, with several international banks allowed to operate, predominantly to facilitate inbound capital. Some major international banks have branches in the Philippines and provide a full suite of banking services. The Philippines banking sector includes universal banks, commercial banks, thrift banks, rural banks, cooperative banks, Islamic banks and digital banks.

Foreign companies looking to set up in the Philippines can open bank accounts with either a domestic bank or the local branch of a foreign bank. A domestic bank is recommended if a business plans to deal exclusively with local clients and suppliers. On the other hand, a local branch of a foreign bank offers options of multi-currency accounts, which benefit companies needing to make frequent repatriations to their home country.

There are four types of bank accounts available in the Philippines. They include:

• Savings account. The most common type of bank account usually allows unlimited monthly transfers.
• Checking account. Also called a current account, a checking account usually costs more to open and maintain but is useful in managing business expenses.
• Time deposit account. Deposit bank accounts are designed for taking deposits and accumulating savings over time.
• Foreign currency account. Foreign currency accounts can be useful for some businesses and individuals to diversify their savings. Foreign currency accounts in the Philippines are typically available in US Dollar, Australian Dollar, British Pound, Canadian Dollar, Chinese Yuan and Euro.

Australian banks in the Philippines:

• ANZ Philippines operates as a fully licenced universal bank supporting corporate clients with a range of products and services, including corporate and commercial banking, trade finance and cash management services. It has an established presence in Makati City.

Foreign exchange controls

Philippine residents and non-residents are permitted to purchase foreign exchange from authorised banks and other foreign exchange dealers. Foreign exchange purchases up to USD 500,000 (AUD 771,521) for individuals and USD 1,000,000 (AUD 1,543,043) for corporate entities require only the submission of a Bangko Sentral ng Pilipinas (BSP) application form. Amounts in excess require the submission of supporting documents.

There is no mandatory foreign exchange surrender requirement for residents’ foreign exchange earnings. Residents can sell foreign currency for pesos or deposit it in foreign currency bank accounts in the Philippines.

Although recommended, registration of foreign investments with the Philippines central bank is optional. Registration is mandatory if the foreign exchange will be sourced from local banks and used to service the repatriation of capital or remittance of earnings.

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