Franchising in The Philippines

Where

The Philippines

What

Utang na loob: Filipino sense of lifelong obligation

How

When doing business in The Philippines, it is advisable to be aware of the Filipino sense of lifelong obligation. A foreign businessperson frequently becomes involved in giving and receiving favors and, therefore, owes obligations to local people and acquires obligations from them. This process of give and take is a normal part of business in all countries, however, in the Philippines, important personal obligations have a very serious, nearly sacred importance. Keeping this cultural value in mind, successful international businesspeople are cautious and conscious in their personal and professional relationships (which are often mixed) with Filipino government officials, business leaders, partners, employees, clients, suppliers and service providers.

Why

The Filipino cultural value of utang na loo creates strong bonds between people of different levels of status and power. It grows out of the hierarchical economic and social structure of Filipino society and it reflects the sense of paternalistic duty expected of those who are more privileged than others. Benefits and favors that improves one's life, such as being helped to find employment, get an education, obtain medical services for oneself or a family member, and gain overseas work or study experience may create lifelong "debts" that the debtor never feels able to fully repay but must always try to do so.

Foreign business people are definitely considered members of the privileged class and may be asked for the kinds of help mentioned above. One situation in which this is likely to happen is being invited to become a godparent. Other cases occur when they are merely trying to be caring and helpful bosses. Desiring to show kindness and generosity, some foreigners inadvertently make commitments and acquire obligations that are far greater and longer term than they realize at the time.

So What

Coming from a less socially stratified culture, US business people rarely understand that their automatic status within the Filipino cultural context makes them very desirable potential benefactors. Foreigners should be careful to enter into bonds of mutual obligation with Filipinos consciously, intentionally, and with full awareness of the responsibilities involved. Failure to do so can result in false expectations, disappointment, and resentment.

To Learn More

Read Considering Filipinos, Yarmouth, ME: Intercultural Press, 1990, by Theodore Gochenour and Passport Philippines, New York: World Trade Press, 1997, by Luis Francia.


By Gary M. Wederspahn, a leading intercultural business consultant, speaker, and writer. His new book, Intercultural Services: A Worldwide Buyer's Guide and Sourcebook, is available from Butterworth Heinemann publishing company and from Amazon.com.