Philippines: Operating a Business

Legal Forms of Companies

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
The Corporation is a joint-stock company. No minimum. 25% must be subscribed. 25% must be released at the incorporation.	Minimum 5 shareholders, maximum 15. A Majority of shareholders have to be Philippine residents. No maximum after the constitution. Liability is limited to the amount contributed.
A Closed Corporation is a closed joint-stock company No minimum. 25% must be subscribed. 25% must be released at the constitution.	Maximum 20 Liability is limited to the amount contributed.
Sole Partnership is a single-member company No minimum capital.	Only 1 person Liability is unlimited.
General Partnership No minimum capital.	Minimum 2 partners Liability is unlimited.
Limited Partnership No minimum capital.	Minimum 2 partners Liability is limited to the amount contributed.

Enterprises Federation: Philippine Exporters Confederation
Federation of Philippine Industries

Source: Doing Business.

For Further Information: Consult Doing Business Website, to know about procedures to start a Business in Philippines.
Philippine Contractors Accreditation Board (PCAB)
The Competent Organization: The Securities and Exchange Commission (SEC).

Principle: The recovery of companies in difficulty allows them to maintain their activities and return to a viable situation. The Securities Regulation Code specifies that regular tribunals are competent.
Minimum Debt-to-Capital Ratio Triggering Liquidation: No legal minimum.
Bankruptcy Laws: Legislation on bankruptcy includes the Insolvency Law and many regulations and decrees, which make up an out of date and sometimes incoherent framework.
Reorganization and Rehabilitation Laws: The Rules on Corporate Rehabilitation define the conditions for restructuring.

	2010
Labor Force	38,900,000

Source: CIA - The world factbook

Source: UN - United Nations

Employed Persons, by Occupation (% of Total Labor Force)	2007
Officials of government and organizations of special interest, senior management in companies, managers, supervisors and managing owners	13.0%
Professionals	4.4%
Technicians and associated professionals	2.6%
Office workers	4.9%
Workers in the services sector, in sales in shops and on markets	9.9%
Workers in the agricultural, forestry and fishing sectors	17.7%
Marketing personnel	8.1%
Factory workers, machinists and assemblers	6.5%
Workers and unskilled workers	32.4%
Special functions	0.5%

For Further Statistics: Philippine Labor Market Information.
For Further Information About the Labor Market: Department of Labor and Employment

Working Rest Day: One day of rest every seven consecutive days worked.
Paid Annual Vacation: 5 days of paid vacation a year after one year's work.
Retirement Age: 60
Child Labor and Minimum Age For Employment: Work is forbidden under 15 years of age, unless it is carried out in the family and does not interfere with school activities.
Informal Labor Market: The low official unemployment rate does not take into account the extent of under-employment and the informal sector.

Minimum Wage: Varies depending on the region and the position occupied, between P200 (USD4) and P350 (USD7) a day.
Average Wage: The minimum wage is determined at the regional level by the Regional Tripartite Wages and Productivity Board.
Other Forms of Pay
Pay For Overtime: Overtime is paid 125% of the normal hourly rate.
Pay For Rest Days Worked: Work on a public holiday is paid 130% of the normal remuneration, or 150% if this holiday was supposed to be a rest day.
Pay For Night Hours: Hours of night work (between 10 pm and 6 am) must be paid at least 10% more than the normal rate.
Pay For Overtime at Night: Overtime at night is paid 110% of the hourly overtime rate.

The Areas Covered: Sickness, disability, maternity, retirement, death and funerals.
Contributions: Contributions Paid By the Employer: 5.6 %. Maximum 1 060 PHP/month. For further details, see here.
Contributions Paid By the Employee: 3.76 %. Maximum 500 PHP/month. For further details, see here.
Competent Organization: Philippine Social Security System
Philippine Health Insurance Corporation

Method of Recruitment: Internet is used more and more, and an interview is generally planned.
Recruitment Agencies: A list of recruitment agencies is available on PhilRecruit Online.
Recruitment Websites: Phil-JobNet

Type of Contract: Employment contracts are regulated by legal clauses and to a lesser degree by collective agreements and individual negotiations.
The terms of employment contracts are extremely rigid.

Breach of Contracts
Retirement: Retirement age appears in the collective agreement or the hiring contract.
Dismissals: Dismissal can be decided if it is justified by: serious misconduct or a refusal to obey the orders of a superior, growing habitual negligence towards the employee's responsibilities, fraud or voluntary breach of the established contract of trust, a crime or offense against one's employer, his family or his representatives. Redundancy is also allowed (staff restrictions, etc.).
Other Possible Methods: A contract can be terminated if it arrives at term, if the employee resigns, or retires.
Labor Laws: Labor Code

Cases of Dispute: Not observing the minimum wage, not paying social contributions, or bonuses and overtime, dangerous working conditions, forced labor
Legal Framework: The Constitution and the Philippine Labor Code.
Procedure: The parties can have recourse to mediation, conciliation or arbitration provided for in the Labor Code, or submit a written request for intervention (AIDA) to the office of the Secretary of Labor and Employment.

Legal Framework: The Constitution and the Philippine Labor Code.
Competent Legal Body: The National Labor Relations Commission, attached to the Ministry of Labor

Social Dialogue and Involvement of Social Partners: The two main groups of trade unions are TUCP and FFW. They are affiliated to the international Confederation of Free Trade Unions (ICFTU ) and to the Worldwide Confederation of Labour ( WCL).
Unionization Rate: 5% of workers are unionized.
Unions: Federation of Free Workers.
Kilusang Mayo Uno
Regulation Bodies: Bureau of Labor and Employment Statistics (BLES)
Department of Labor and Employment

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