In this episode, Derek is joined again by Carmen Reyes. They will discuss in great depth and talk about the office environment, the cultural environment and other aspects of housing, staffing and the different approaches that you may use. They will also cover a bit about build cost and the build process.
- According to Derek, there’s kind of a maturation cycle wherein business owners initially go with a BPO because it’s safe and secure. And then eventually they go out on their own. They incorporate and a part of that is finding an office and fitting it out.
- According to Carmen, once a space is selected, to be able to get some plans done. One would need to hire an architect and engineer; an electrical engineer and a mechanical engineer.
- Then the plans will be submitted to the building administration.
- There would be an approval of their own set of restrictions and construction guidelines that should be complied with. Also, ideally in order not to redraw everything, if the company is interested in the PEZA accreditation then it would be good to cross reference the design guidelines of the development with the PEZA guidelines in terms of its physical space and all the technical requirements.
- Approvals depend on city governments, building administrators and most often it’s a case to case basis. It is always good to know someone if you want to speed up the whole process. Some people even resort to bribery just to get things done.
- Labor in the Philippines is quite cheap but goods and raw materials can be quite expensive. Most especially because most of the raw materials are imported from different countries.
- If you’ve only started outsourcing with only one or a few staff, this might not be the best road for you because of all of the bureaucracy and red tape that you’ll have to go through in order to build your own office here.
- According to Carmen, it is always better if you involve locals when it comes to dealing with suppliers and building administrators.
- It takes a very long time to get certifications and approvals from the city government and building administrators without knowing someone with a high-level position that some people resort to bribery just to get things done.
- The main impression of some Filipinos on foreigners is that they are willing to spend more.
- If you’ve only started outsourcing with only one or a few staff, this might not be the best road for you because of all of the bureaucracy and red tape that you’ll have to go through.
- [email protected]
Hi, my name’s Derek Gallimore of Outsource Accelerator and this is episode 56. Today we have Carmen Reyes with us. She joined us actually on episode 47 and 38. So, if you want to know a little bit more about office space and the technical aspects of office provision, go and listen to those episodes. Today we dive in a little bit deeper and we talk about the office environment, the cultural environment surrounding that and other aspects of housing, the staffing and approaches to it. We also cover a little bit about build cost and the build process. So, this one is interesting. Specifically, if you are considering outsourcing independently. Okay so that means setting up your own office and incorporating things like that do have a listen. If you want any information or you want to contact Carmen go to our show notes you can find those at outsourceaccelerator.com/podcast/episode56.
Derek: Okay. Welcome back. Today again I’ve got Carmen Reyes of Core Design. Hi, Carmen.
Derek: And Carmen is an architect here in Manila Philippines. I have actually used her for one of my office fit out in Manila. And she was a ray of light. And so, I would like to draw on your experience Carmen because I took the step and this is very common for a lot of people that outsource. There’s kind of a maturation cycle in that they go with a BPO initially because it’s safe and secure and there’s you know a lot more services added and then they go out on their own. They incorporate and a part of that is finding an office and fitting it out and that’s where all the fun begins. So, I wondered if you could maybe shed some light on the process of fitting out an office in Manila Philippines and maybe some cost insight.
Carmen: Sure. Sure. Okay. Well first thing once a space is selected is to get some plans done. So, you would want to hire an architect and engineer. That would be an electrical engineer and a mechanical engineer. If you have any sinks or toilets or any anything that has to do with water then you would need a plumbing sanitary engineer as well. And you contract these people and they face them with the plans which will be submitted to the building administration. It’s assuming this is a space in the building or whoever the administrators for the development and they would, there be a series, there would be an approval that would be like a permit signed once everything is complied with and they do have usually their own set of restrictions and construction guidelines that would need to be complied with. And ideally in order to not have to redraw everything if the company is interested in the PEZA accreditation then it would be good to cross the design guidelines of the development with the PEZA guidelines in terms of its physical space and all these technical requirements.
Derek: Yeah, yeah. And that is a significant.
Carmen: Yeah that is significant because if you change anything it’s like redoing a project from scratch sometimes.
Carmen: So just to make things a bit more efficient yes get all the constraints, get all the restrictions, get all the requirements in there before even putting pen to paper.
Derek: What I did notice in the Philippines was there were a lot of co-dependencies and you couldn’t do this before you got this and you couldn’t get that before you got that and it made for quite a cumbersome process because obviously each of those departments are quite busy. How long you know in rough terms would you think it would take to get a build project or a fit-out project approved and then equally for it to be built out. Would you?
Carmen: Oh gosh. So, it’s really, it’s case to case really depends on the building administrator. It depends on the city government. Yeah, approvals can take if you’re lucky maybe a couple of weeks you know if they have a really efficient system for going over plans and getting approvals. But the usual case is here. You said something and you’re waiting, you’re waiting. Sometimes things don’t happen. Things don’t move unless there’s someone like following up weekly sometimes even daily if necessary just because there’s so much going on. A lot of cases people are forced to pay an under the table fee with no receipt just for the expedition of the process.
Derek: Right. Right.
Carmen: That’s not unusual over here. Some people I mean rather than have to wait and go through the whole process of you know like a month, two months wait I mean if you have to operate already they just said you know we’ll just give that bribe you know. We’ll just take care of it. Just make sure it gets done.
Derek: That’s a very real aspect to Manila.
Carmen: It’s very real.
Derek: Which actually we haven’t really touched on in any podcast yet. Because it I mean to be frank it’s a little bit of a delicate.
Carmen: Of course
Carmen: Of course, people wouldn’t wanna admit it, they wouldn’t want to be caught doing it. But I mean it’s been in the system for quite a while unfortunately. Yes. Again, there are some it’s case to case you know there are some agencies or there’s some people, there some developments. Definitely the private developments are less prone to this. They’re a bit more stringent, they have a system in place. They have the protocols that they follow. And there’s no going around if their building manager is very good if the property manager is doing their job well. The leasing manager and I mean things will be according to a protocol. Usually if it’s a government related thing then things are a little bit greyer and. Again, depends who you know things can also tend to go faster if you know somebody at a higher level or in that office for example or if it’s someone a friend or someone you’ve dealt with, a friend of a friend a relative.
Derek: So, maybe if I could summarize that Carmen. It really need to allow for quite a long time yeah.
Carmen: There’s a lot of back and forth. And expect to wait. Expect to not be able to meet your target deadline.
Derek: So double or triple the preparatory time.
Carmen: Unfortunately, yes. And this also applies to the construction process that will apply to construction that will apply to sometimes design, engineering design. You can be done with the architectural design for example in a month and then you pass on your plans to the engineer and you like okay can we get this by next week and I have yet to see that happen.
Carmen: It could be a couple of weeks if you’re lucky. But then you’d have to be calling them and calling them yeah.
Derek: And yeah.
Carmen: A level of professionalism and maybe just having a culture of reporting of like letting people know. Oh, it’ll be done, so this came up. I can only submit it by this day and you know you’re able to actually do it. I mean just having that mindset of informing people of when things can actually happen. You know what can actually be delivered. It’s something it’s a lot of times people. This is a cross rule; the general standard is that they’re not thinking like that.
Derek: And I think a very significant point you made without it necessarily being a point is that it’s really important to have a very knowledgeable but possibly even connected person that is representing you. And you know you’re a perfect example of that someone that’s very organized someone that’s very knowledgeable and can get things done. This really isn’t something where especially a foreigner should think that they could do it themselves. Because you would just get really way down in there in a kind of quagmire of paperwork and bureaucracy.
Carmen: Very straight but also yeah why did this person said they could do it but they couldn’t. And then it didn’t happen and now I have to call them in. Yeah it tends to happen a lot.
Derek: Okay. And then just briefly I mean I know it’s very difficult to have rules of thumb about this but in terms of build cost and build time, something that I noticed in fitting out an office here was a lot of the raw material, well finished materials such as the office carpets and certainly the electronics and possibly the electrics. They’re actually maybe more expensive than what you would pay in the West. So, there are certain aspects of construction and build that are significantly cheaper here but there are numerous aspects that are actually as expensive if not. Do you have any thoughts on that?
Carmen: So, I would say labor here is less expensive for sure. The daily wage the minimum wage is quite low. So yeah but in terms of materials, goods. Do take note a lot of there’s a lot of construction materials here that are imported.
Carmen: A lot of things from the U.S. from China or from different countries like tiles from Spain and Italy you know carpet tiles from Germany wood planks from Germany. Yeah. So, there’s the additional import tax fee to consider. Yeah so it can add up.
Derek: Right, right. Okay. That’s great. That’s good insight.
Carmen: I do want to add one more thing. I believe this happens regularly even until now. The main impression is if the client is foreign that they have capacity and be willing to spend more. I think there may also be that factor. So yeah it is helpful to have a local representative maybe, to be the one facing contractors, to be the one facing the suppliers for example or if you have to bargain, you’re able to bargain in the local dialect it does help a lot. Not for things to get too blown out for example.
Derek: And that’s especially the case with the certification and the approvals and things like that as well, isn’t it?
Carmen: Definitely, definitely.
Derek: It’s better for a foreigner not to be too prominent.
Carmen: I think so. Yeah, they will make some conclusions when they see white skin for example. And they say there’s a correlation with the fee I can charge. So, it helps that the local kind of taking care of a lot of things at least as a figurehead or someone facing people.
Derek: Absolutely. Thank you, Carmen. So, I think that’s you know for the listeners out there it’s a good insight it’s sort of maybe it’s again something. It’s a good reflection to suggest that if you’re just hiring one employee if you’re just getting started with outsourcing in Manila, it’s probably not the best road to go down. But it’s really an interesting and important stuff because eventually the economics of going out incorporating, getting your own office will come into play compared to paying a seat leasing fee for a BPO. So, there is definitely a lot of relevance here. And so, thank you so much for your time coming in. If people want to get in touch, how will they get in touch?
Carmen: Sure. They can just contact me through email it’s [email protected]
Okay, another great episode from Carmen Reyes there. If you want to get in touch with Carmen go and show notes for her information you can get that at outsourceaccelerator.com/podcast/episode56. And if you have any questions for us at Outsource Accelerator just drop us an email. You can do that at [email protected] and we will get back to you.