Why you should care
Films, art, advertising and software could propel the next economic boom in this Southeast Asian country.
Asia’s booming economies are contributing more than half of the world’s economic growth each year. And China and India aren’t the only ones driving those gains. A communist nation is betting on private and foreign education; a post-Soviet country is emerging as a fintech power; a country born out of war is growing as a connectivity hub; an outsourcing-dependent economy is turning to the creative arts; and an oil giant is exporting green tech. These are the New Asian Tigers.
They lay out their vision on big sheets of white paper peppered with hot pink and orange Post-it notes. Some doodle their ideas in black-and-white sketches. One woman wants to turn her family’s ancestral home into a heritage tourist attraction and site for creative retreats. A man wants to turn temporary tattoos into fashionable body art. Another woman wants to establish a company to publish Filipino stories for international readers.
This isn’t just a colorful brainstorm; these entrepreneurs are preparing business plans. The “creative enterprise” workshop, organized by the British Council and the Philippines Department of Trade and Industry (DTI), is aimed at helping participants turn their ideas into sustainable ventures by structuring business concepts the way professionals in creative industries would. It’s also a window into how the Philippines is looking at the creative economy as a key driver of the country’s future development.
Growing consistently for most of the past decade at more than 6 percent annually, the Philippines has emerged as one of the world’s fastest-expanding economies. Now, with automation threatening the business process outsourcing (BPO) industry and remittances from overseas workers growing vulnerable to rising anti-immigrant sentiments, the Southeast Asian nation is looking to diversify its portfolio.
We are looking for the next ‘big one.’ We think it is the creative industries.
Nora Terrado, Philippines Department of Trade and Industry
The limited data available suggests a sharp explosion in how much creative industries are beginning to contribute to the Philippines economy. In 2009, these industries were bringing in $7.5 billion, about 5 percent of the gross domestic product, and employing 4 million people. By 2017, those numbers had jumped to $12.5 billion, or 7.34 percent of the GDP, and almost 6 million workers.
In 2013, the Philippines passed a law designed to turn Filipino creativity into an economic engine that would also promote the country’s culture and identity. The 2017 Investment Priorities Plan identifies “creative industries and knowledge-based services” as a key focus. The DTI is working with the Creative Economy Council of the Philippines (CECP), a think tank founded by individuals in different creative fields, to craft a “Philippine creative industries master plan.” It will make growing a creative economy a national priority, supporting that growth with policy and incentives, funding, skills training and the establishment of creative cities and hubs.
“We are looking for the next ‘big one.’ We think it is the creative industries,” says Nora Terrado, DTI undersecretary for trade and investments promotion.
Tracking the true size of creative industries is difficult, partly because a significant chunk consists of independent and unregistered freelancers working from homes or coffee shops, servicing clients across the world online. Defining creative industries is a challenge too. The CECP identifies a creative enterprise as a business venture that “generates wealth from original ideas,” compared with wealth generated from land, products or services. CECP founder Paolo Mercado divides the sector into three categories — physical products such as fashion and furniture, services like advertising and content such as music, films or software.
What the Philippines has going for it is the government’s support, the country’s fluency in English, globally acknowledged talent in creative fields — particularly as singers and other musicians — and a relatively young population.
But creative industries face stereotypes that remain a potential stumbling block. Research by the British Council suggests that the creative industry “is not prized as a prestigious, high-achievement, high-aspiration sector” in the Philippines. It’s “too often seen as [being] for nonachievers, and creative jobs are not given the same status as other professions.”
Those perceptions hurt the infusion of talent into the sector, instead spawning lawyers who really want to be painters and corporate executives with musical dreams. Still, says Mercado, support from the government and private sectors similar to what the BPO industry and overseas Filipino workers have received in the past can propel creative industries. “There needs to be a declaration at the highest level of government possible that creativity is a national priority,” says Mercado.
Attitudes will also shift as creative industries continue to bring in more revenue, suggests Nestor Palabyab, executive director of the Philippine Trade Training Center. “Once people see that they can earn from their talent, this will change,” he says.
Others, like Calixto Chikiamco, an economist and the president of the nonprofit think tank Foundation for Economic Freedom, caution that the Philippines first needs to fix “basics like government bureaucracy” if it wants to emerge as a true hub for creative industries.
The Philippines ranked 113 out of 190 nations in the World Bank’s latest “Doing Business Report” that rates nations on how “business-friendly” their regulatory policies and procedures are. According to the report, opening a business in the Philippines takes 16 procedures and 28 days on average. Additionally, a business owner needs to make 20 different tax and contribution payments and visit multiple agencies in person. The Philippines also has one of the highest tax rates in the region. Personal income tax clocks in at 32 percent, while neighbors Malaysia and Singapore shave off only 26 and 20 percent, respectively.
Mark Meily, a filmmaker and the owner of a design lab, knows well how layers of red tape and archaic government systems can grate on the nerves of an entrepreneur. “Being an entrepreneur in the Philippines is difficult because the most basic step — company registration — is neither basic nor simple. There are no clear steps,” he says. “The system discourages business owners who want to do things more efficiently.” In comparison, Meily has registered companies in Singapore, Hong Kong and the U.S. much more efficiently.
Still, other aspiring creative entrepreneurs remain hopeful. Anne Quintos, 33, used to be among the estimated 10 million Filipinos working overseas. She and her husband were based in Taiwan for nine years, and as much as they loved living there, raising two young children without the help and support of family proved too much. “Even if we were paid well, we were drawn to the idea of settling back home,” Quintos says.
Encouraged by the prospects of a creative economy, the couple is setting up a publishing firm in the Philippines and using the skills they acquired as writers for a consumer electronics company in Taiwan. The Philippines always had the talent, says Quintos. Now its youth also increasingly has the confidence. “It’s our time,” says Quintos.