Metro Manila remains not only the capital city but an epicenter of commerce and business activities. For years, it has always been the target and aspiration of several entrepreneurs as a result of its overcrowded streets, towering skyscrapers, and dense concentration of enterprises.
However, a recent survey has highlighted why more companies including start-ups have started taking advantage of what other provinces can offer while considering several challenges in Metro Manila including high costs of living, chronic traffic congestion, saturated market, and high minimum wages among others.
In this article, we’ll lead you through why you should consider setting up your business in the provinces, highlighting both the advantages and the potential challenges that need to be addressed.
Why Companies in the Philippines Choose Manila as Their Location?
- Most entrepreneurs believe that Manila is way more developed than any other city in the Philippines.
- Manila has stable electricity compared to other provinces in the state.
- It’s the only city that has a well-developed metro rail transit.
- Most entrepreneurs believe that most of the universities that provide the workforce for local and foreign companies are found in Metro Manila.
- Manila is very populated and it will be easier to reach the target audience with less stress.
- Manila has a well-developed infrastructure and communication settings.
Key Reasons the Province is an Ideal Choice for Your Business
While companies have different reasons for establishing businesses in the provinces, these are the major reasons most entrepreneurs prefer provinces compared to the metropolis.
Lower Cost of Living
Compared to Metro Manila, the cost of living in most provinces is bearable which translates into lower expenses for businesses. Most especially, start-up businesses would flourish in provinces because of the affordability of commercial rent, utilities, and daily operational costs.
Additionally, as a business owner choosing a provincial location can reduce overhead costs, allow better financial flexibility and overall profitability. As a result, you can price your products or services more competitively in the market.
Less Traffic Congestion
Among many things, provinces have much less traffic congestion compared to Metro Manila which is always traffic congested. The effect is, metropolis traffic congestion mostly causes delays in delivery and commuting, affecting overall business productivity.
In contrast, as a result of less traffic congestion in several provinces, an established business has the advantage of faster delivery, smoother logistics, and more efficient daily operations. For example, a congested city will enhance the lateness of employees to the office, which will eventually hinder the overall business success.
Opportunities for Decentralized Growth
For years, business attention has always been on the metropolis leading to overcrowding and market saturation. Not until recently that there are establishment of start-up businesses and branched out of several companies to the provinces.
The fact is, starting a business in the provinces makes entrepreneurs tap into underdeveloped markets, foster economic growth in these areas, and contribute to more balanced national development.
In fact, the presence of more businesses in the provinces can also create job opportunities for locals, improve regional economies, and reduce migration to the already congested Metro Manila.
Lower Labor Costs
Compared to Metro Manila, the minimum wages in the provinces are generally lower, resulting in lower labor costs for businesses. Although, this doesn’t mean that businesses should make use of these lower wages to exploit their workers. Instead, it presents an opportunity to provide fair competitive compensation which attracts skilled workers locally.
Access to Untapped Talent
While many people’s attention has been on moving to Metro Manila for higher wages, the provinces are home to a wealth of untapped talents. By establishing a business in the provinces, you can tap into a workforce that is often overlooked but has strong local ties and loyalty. In fact, several committed, skilled and long-term workforces are available to contribute to the stability and growth of your business in the provinces.
Provincial Challenges That Need to Be Addressed
While there are several advantages attached to establishing a business in the provinces, it’s essential to acknowledge that businesses might strive to overcome some challenges to truly thrive. Some of these challenges can be solved either by the government or the entrepreneurs themselves. Below are common challenges and solutions.
1. Infrastructure Deficiencies
Challenge: Some of the provinces in the Philippines have unreliable infrastructures including poor road networks, limited public transportation, and inadequate internet connectivity, among others. All these challenges can pose a threat to the general operation of a business and reduce productivity.
Solution: It will be of great help if government prioritizes infrastructure development in the provinces. Basic programs aimed at improving roads, expanding transport options, and upgrading internet services should be introduced by the government. In addition, businesses can also invest in alternative power supplies like solar power.
2. Higher Cost of Energy
Challenge: In some provinces, energy costs are significantly higher compared to Metro Manila. These areas can be a major burden for some businesses most especially, start-up businesses. Also, businesses that rely on power supply or electricity might find it difficult to flourish in these areas.
Solution: The government could help by introducing subsidies or incentives for new businesses in these provinces. Additionally, businesses can also explore using energy-efficient technologies such as solar or wind power.
3. Limited Access to Markets and Suppliers
Challenge: Businesses in the provinces might have higher risk of reaching target markets and finding suppliers due to their distance from the center of commerce. As mentioned above, due to poor road connections, it might be difficult for suppliers to supply some businesses situated in local provinces.
Solution: While businesses can make use of online platforms to connect with their wider audience, the government should also provide perfect transportation and logistics infrastructure to encourage smooth and easy access to the markets.
4. Attracting and Retaining Talent
Challenge: While there are several talents in the provinces, we should also acknowledge the possibility that getting skilled workers and professionals might be difficult in some provinces since there is higher migration of professionals to the metropolis in search of higher wages and better career opportunities.
Solution: Government and entrepreneurs can help by providing non-monetary benefits like flexible working conditions, a positive work environment, career development opportunities, and others to attract and retain skilled employees.
5. Lack of Government Incentives
Challenge: Many provincial areas lack the financial incentives that would encourage more businesses to set up there. Unlike special economic zones or industrial parks that often provide tax breaks or reduced fees, provincial businesses may face more operational and regulatory burdens.
Solution: The government can offer more substantial incentives to businesses willing to start operating in the provinces. These incentives should include tax exemptions, fast-tracking business permits, licenses, and others, especially for start-up businesses.
Conclusion
The goal of every company is to be situated in a greener pasture and a perfect location that can guarantee their business improvement and productivity. This is why the majority of entrepreneurs focus on establishing their businesses in Metro Manila among other provinces in Philippines.
However, the argument is, while businesses flourish in the metropolis, there are high chances for businesses to do better in the provinces with the help of the government and the creativity of entrepreneurs as a result of available advantages provinces have including, lower cost of living, less traffic congestion, lower labor cost among other.
