Dealing with Contractors in the Philippines

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  1. Thanks for the video. I got jerked around from a Filipino contractor. I wish I had known this before. I had built a house for my girlfriend. It started out with 10000 pesos and ended up 60000 pesos. They cap stretching it out day by day. Now I know what to do in the future thanks again.

  2. Henry, worthy to say you can get a good deal with a daily laborer if you set it up right. Remember you will at times need to supply the coffee and “merienda” during the ‘breaks’. This may only be P25 or P30 for a couple of workers. Expect to pay about P350 – P450 / day per laborer. May be a ‘lead’ may command a bit more, say extra P100. Chalk it up to cost of doing business in the Phils. Still so inexpensive contrasted to US mainland labor costs. P450 = $11.25 (at last exch rate) that’s per day!

  3. Henry,getting involved in labor are ya now.hows the work ethic,ie craftsmanship of the labor in general.can you hire your own crew mius the contractor? an cut out the guy who wants the bigger money.basically can you hire workers an direct work or is that frowned upon.thanks henry.

  4. Usually the ‘Contractor’ for local jobs is just what we’d call a ‘Handyman’ back in the States.. not a real Contractor who employs others. He’s usually a guy who has some tools and knows how to build stuff. My limited experience is that quality is all over the map and the only thing you can count on is a high quote.

  5. By comparison to US wages.. very true, a good bargain. My beef is dealing with the dishonesty and scamming of getting their foot in the door on the project and then basically dragging out the work or changing the terms midstream for whatever reason they whip out of thin air. To me, if an agreement has been made.. stick to it. Nobody likes ‘surprises’ and new costs once the project is underway.

  6. Yah, and the way I see it.. that was no accident. What contractor who builds houses for a living makes an estimate mistake of 6 times the initial estimate? He’s either incompetent or dishonest. But.. at least now you know for next time.

  7. Agreed. Scammers and dishonest contractors also victimize State – side too. On a bigger scale even. When I have projects done in the Philippines, it saved me a ton of money when I have a local or trustworthy friend arrange the work. You are right, a foreigner or expat has to be more vigilant. No one likes being taken advantage of.

  8. Hey Henry, thanks for your videos they are all really good and informative. Keep them coming. Cleaning guts in the background Karaoke videos LOL.

  9. Yep.. and that’s my only beef, not the actual wages since it’s pretty cheap. But just because I can afford it does not mean I should be lied to or scammed. That’s the mentality I don’t care for no matter what country it’s happening in. A deal is a deal, none of this bait-and-switch pricing nonsense.

  10. That’s the way you think because we were raised that way. They were not. I know lots of Filipinos is the US. I do not know one who doesn’t have a story of woe from doing business there. They speak the language and often they are dealing with family. So I would say what ever you do and how ever you plan it. Stay on top of things and don’t trust anyone with big advance payment…

  11. you got the wrong persons for the job.canvass, and get an overview of your contractors.have a contract.other supporting docs are technical specification and bill of materials.a contract basically states the amount of that project,  the scope of work, duration,responsibilities of contractor and so is the owner and other relevant details. have it notarize by a lawyer.any variations from the contract docs is subject to change orders.

  12. Best thing is get a contract drawn up with a licensed contractor. Period. Don’t gamble with your money thinking someone will do a job, pay him 10% down upfront then he doesn’t show up. You get screwed left and right. You go to a contractor development company, they do it up to your specs and there is a contract to sign. I mean calculate the exchange rate, you still save compared to U.S. or European rates for building a house. And it’s going to be done correctly. I hate being ripped off little bit at a time because if you add it all up, it becomes a very large sum eventually. For your safety, get a contract. That will specify that if the work is not done or something is wrong, you don’t pay him. He signs on it, you sign on it. Get it notarized. 150 to 300 pesos to notarize a contract through a licensed notary public.

    1. Good advice.  The worst mistake an expat can make is letting a new relative say, “Oh.. my friends and I can build that for you!”, no contract, no business entity.  Next thing you know the nickel-and-diming begins until you’re broke.  The assumption is that, “family wouldn’t screw us over.”  Oh, yes they would.  🙂

  13. Thank you for your video and advice. Would you add any additional information to the following two circumstances. I have planned to buy some property in a subdivision in Cebu City that I was going to have a house built. To maximize our money I was going to get it built outside and then finish the inside. My wife is a native to Cebu with lots of friends and family there. I was planning on using some good friends, my wife and a few trusted family members to be the middle man to the contractors so they do not see the “rich American. “. The second project is to start a Christian school as a missionary venture. The children would receive a good education and an hour a day of bible study from me. I know they have foreclosures there as well and was hoping we could purchase it and fix the needed repairs with a contractor. Our plans are to be lifetime missionaries and live in Cebu the rest our of lives. I have continuous monthly income that would allow us to live comfortably in Cebu if we had our home. We will be there in 2-3 years but will be visiting in the next few months. By the time we arrive in 2-3 years I am hoping to have the property bought and the home completed to the point it would only need to be finished on the inside.

    1. @John Christopher i would recommend checking with the PH immigration website regarding any filings or limitations or requirements on running what they may consider either a charity or business regarding the christian school. any time foreigners will be in close contact with filipino children you are entering tricky waters so, be sure of the requirements before getting too far along on that project. as for the house, your plan could work out very or not so well… depending on the character of the people you entrust. be careful anytime you hand over money for materials, verify in some way the true cost of what your are purchasing. involve your wife to participate as much as possible when purchasing or bargaining for materials/labor.

    1. +Don Moh 2009 in rented a 2 bed room full furnished condo in pasay for 13,000 a month for i think 4 months, the listed price was 20,000 a month but i talked the price down with the owner.

  14. in france the habit is to pay 10 to 20 % up front ( which usually pays the materials ) and then let’s say in the middle of the work done pay half of it ( which usually pays the labor ) and when it’s done finally pay what’s left so basically the 40 % left after the work is done, would that sound acceptable with the local mentality ?

  15. Yeah Contractors here in the Philippines can be a strange breed… I have found over the years no matter what town or island I go to EVERYONE can do what ever job you need(or so they say ) and they really hate it when you already have a good idea of the NEEDED Materials and Cost for them… That kills there “PADDING THE POCKET PROGRAM”….One thing to be careful of and keep in mind is ROOM EXTENSIONS or even HOME BUILDING, They only want to give you the materials list for the COMPLETE WALLS SIZES.. Without deducting the space and materials for the DOODS and WINDOWS…Be very careful of that because the savings can really add up when you DEDUCT that area / materials need…And like you say…”Let them know in no uncertain terms YOU ARE GOING TO BUY THE MATERIALS YOURSELF !!!!!!

  16. Even in the U.S. I don’t like paying contractors until the job is complete. I am a retired plumbing contractor and project contracts that stipulates payments and completion dates protect the customer and contractors

  17. Very good video!
    This is so helpful! All u said on this video is very very true not just based on your experience but my experience. I like the psychology u added to this video and best of all it’s not really condescending. You are just helping all of us to be smart and be in control cuz its tue lots of pinoy takes advantage

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