Korea Invades the Philippines

For Koreans, the
Philippines is the new Florida

korphil1They came without warning, trickling in almost unnoticed until there were too many to ignore. It seemed, all of a sudden, that South Koreans were practically everywhere in the Philippines – in malls, universities, the country’s top resorts, and even on local television shows.

By now, Koreans are in almost all of the Philippines major urban areas. From up north in the cool city of Baguio to Davao City down south in Mindanao, Korean restaurants and groceries, bearing Korean-language signs, can be seen. They have established everything, from churches, hotels and resorts to gigantic manufacturing facilities. There are even Korean-only suburbs in Cavite.

Koreans have invaded the Philippines, and Filipinos for the most part are welcoming them with open arms.

It isn’t hard to see why. Less than four hours away by plane from Seoul, the Philippines has an English-speaking population known for hospitality, a significantly lower cost of living, and some of the most postcard-perfect beaches in the world. At the same time, Koreans are bringing in buckets of dollars into the Philippines both through consumer spending and direct investments.

The numbers prove it. In 2006, Koreans took the number one spot both in tourist arrivals and foreign investment in the Philippines.  More than 570,000 Koreans visited the country last year, overtaking arrivals from the US, which includes returning overseas Filipino residents and workers. On the resort island of Boracay alone, arguably the most famous tourist spot in the country, 65 percent of the visitors who enjoyed the powdery white sand last year were Koreans.

South Korea, accounting for $1.2 billion of the $3.5 billion in investments that entered the Philippines in 2006, is now also the nation’s biggest source of foreign direct investment, followed by the US and Japan. A large bulk of this figure is courtesy of Hanjin Heavy Industries and Construction Co., which is building a $1 billion shipyard – the fourth-largest in the world – inside the Subic Bay Freeport Zone in Zambales Province north of Manila.

“The Philippines’s location and manpower makes it one of the best destinations for Korean businesses,” says Jae J. Jang, president of the Korean Chamber of Commerce of the Philippines. Around 250 large factories in special economic zones in the Philippines are Korean-owned. Koreans are also among the top investors in the tourism industry.

There are now over 100,000 Koreans living here also, each of whom are estimated to spend an average of $800-$1000 per month, which adds up to almost $1 billion in consumer spending each year. Koreans in the Philippines significantly outnumber those in neighboring Indonesia, estimated at 23,000, and Singapore, with only about 8,000.

But instead of embracing all that is Filipino, Koreans, it seems, prefer to bring Korea with them. Wherever they settle, Korean establishments soon rise. Mini-Korean communities are now scattered all over the country. Aside from the usual restaurants and groceries, there are Korean internet cafes, salons, spas, and churches. All have prominent Korean-language signs and few offer any English explanation. It is not unusual to find Korea grocers here who even import Korean-made Coke and Lay’s potato chips from back home, even though identical products are available locally.

“They keep to themselves,” says Pamela Samaniego, the head of Team Korea for the Philippine Tourism Department, echoing a familiar sentiment.

It is not surprising, therefore, to hear of rifts. Local newspaper reports says that tour operators in Cebu complain that only Korean travel agencies are benefiting from Korean tourists because local operators are shut out by Korean companies. In Baguio, where the cool climate is an attraction, there are complaints about illegal business transactions and practices. Some resorts in Boracay are said to have banned Korean tourists because they leave the rooms in shambles after their stay. In Talisay, home to Taal, the world’s smallest volcano, a huge controversy now surrounds a Korean company’s plans to construct a spa resort on the island volcano despite local environmental restrictions. The issue threatens to become an us-versus-them storm. .

In Davao City the city council launched an investigation in late June into Korean business practices, claiming that Korean businessmen were setting up illegal businesses and dodging visa regulations. Also in June the Bureau of Immigration pointedly warned against foreigners operating retail stores and using Filipinos to front for them. Immigration Commissioner Marcelino Libanan said foreigners, most of them Korean, had been violating immigration laws. "A foreigner who engages in the retail trade is liable for deportation as the act is a violation of the conditions of his admission and stay in the country," Libanan said.

The complaints, however noisy, are so far minor and it seems unlikely that the perpetually cash-strapped Philippines is going to turn away Korean money any time soon, indeed it is just the opposite, with the government aggressively promoting tourism and education to Koreans.

This Korean wave, says English language instructor Edmer Bernardo, began in the late 1990s, when Koreans began coming to the Philippines for English tutors from local schools and universities. The C21 Language Tutorial Center, for which he serves as director, was established by a Korean businessman in 1999 in recognition of this trend.

Today, hundreds of these English language centers – many of them catering exclusively to Koreans, as evidenced by their Korean language websites – can be found throughout the Philippines. In Cebu, the second largest city in the country, about 60 of these centers serve Korean students.

Banking on the country’s reputation as the only English-speaking nation in the region, the training schools – known as hagwons back in Korea, where students cram to learn English – are providing stiff competition to similar private academies in Australia and Canada. Thousands of Korean students flock to the Philippines during the peak months of January-February and July-August – school vacation time in Korea – to take crash courses in conversational or business English. Attracted by the affordable tuition and even cheaper cost of living, many opt to stay for 6-month to 1-year courses.

Riding this trend, the Tourism Department in 2003 launched its English as a Second Language Tour Program, which combines language activities with vacation trips. While also targeting Chinese and Japanese students, Koreans make up the bulk of its customers.

Not long after, the Philippines embarked on a targeted marketing campaign backed by a $3.2 million annual budget to attract Korean tourists. Part of this campaign is a Korean language tourism website and a series of advertising materials, including a 30-second television commercial, showing Korean actress Eugene Kim enjoying the beauty of the Philippines.

Honeymooners and businessmen on holiday, says Samaniego of the Tourism Department, comprise the bulk of the tourists, and the country’s beaches and golf courses are the main attractions. Visiting the Philippines is made easier by the country’s lenient visa rules and the increasing availability of direct flights between the two countries.

Jeremy Baik, General Manager of KJL Tour Leader, says that the Philippines is easy to sell to Korean tourists because of its good beaches and resorts. “They look for vacation spots on the Internet and compare pictures of Boracay, Phuket, and Bali. Boracay, with its white beach and emerald waters, easily wins,” he says.

Even though some of the Philippines’s resorts are pricier than their counterparts in Indonesia and Thailand, the cheaper airfare evens out the cost. Thailand, though, still gets twice as many Korean tourists as the Philippines, totaling over 1.1 million in 2006. Baik says this is because Phuket has significantly more hotels and resorts, but local tourism authorities are confident this will not be the case for long.

It is largely for the same reason – low cost of living and English-speaking Filipinos – that many Korean visitors decide to stay. Baik explains that a US$3000 monthly income – a large sum in the Philippines – is hardly enough to sustain a family of four in Korea. But if the fathers leave their families in the Philippines while still working in Korea, they can afford large houses, maids, and other luxuries reserved only for the moneyed.

Bernardo says many Korean parents also opt to have their children take up high school and college in Philippine schools and universities, instead of just short courses, to make sure that they learn English well. The cost of enrolling here is significantly cheaper than sending the kids to school in Canada or the U.S., and the passion for English back in Korea is intense.

On the other hand, Filipinos also seem to be embracing Korean culture. Kimchi is a popular dish, says Sandara Park – a Korean immigrant – who is now a popular local actress/singer whose career began after being voted by Filipinos as the winner of a local talent search. Dubbed Korean television dramas – called Koreanovelas locally – are a passion on primetime TV.

In other words, Koreans are in the Philippines to stay. From the perspective of chilly, expensive Seoul, the Philippines seems to hold the same appeal as Florida does in the United States for residents of New York, and as a result the Philippine Retirement Authority is now actively marketing the country as a retirement haven for Koreans.

It seems that generations of Koreans are likely to be a big part of local life for years to come – from students just starting out, to grandparents resting by the seaside.

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