A Series A software company, engineering team of 8 to 12 at home, a roadmap that requires roughly double the delivery capacity, and a runway that does not support doubling headcount at domestic salaries.
The typical trigger is not cost in the abstract. It is a specific decision: either slow the roadmap, or find capacity that fits the plan. The Philippines enters the conversation as one answer among several, usually alongside Latin America and Eastern Europe.
What tends to decide it is not price. It is whether the work can be structured so that a 12 to 16 hour time gap is workable, which is a question about how the engineering team already operates rather than about the Philippines.
Market Guides
What building an engineering team in the Philippines looks like for a Series A company
In short
This is an illustrative scenario rather than an account of a specific client. A Series A software company building 5 engineering seats in the Philippines typically faces 3 decisions that matter more than the individual hires: which role goes first, when coordination stops being a founder task, and whether the entity question has actually arrived.
The following is a typical shape rather than a case study. It describes what companies at this stage generally encounter, the decisions that recur, and where the surprises usually sit. No specific company is described and no results are claimed.
The starting position
The first decision, which role goes first
The instinct is to hire the most needed specialism. The pattern that works better is to hire the role whose absence blocks the most other work, and to hire it strongly.
At this stage that is frequently a senior or strong mid level engineer who can operate with imperfect information, because the process for working with a distributed team does not exist yet and someone has to absorb that.
The reason it matters disproportionately: this person participates in later interviews, becomes the reference point new joiners calibrate against, and defines what normal looks like. Under-hiring here is the most expensive saving available.
At this stage that is frequently a senior or strong mid level engineer who can operate with imperfect information, because the process for working with a distributed team does not exist yet and someone has to absorb that.
The reason it matters disproportionately: this person participates in later interviews, becomes the reference point new joiners calibrate against, and defines what normal looks like. Under-hiring here is the most expensive saving available.
What the time gap actually forces
The Philippines is 12 to 16 hours ahead of the US and 7 to 8 ahead of the UK.
For a UK company this is manageable with a shifted Manila start and a real afternoon overlap. For a US company there is no arrangement where both sides keep standard hours, and the choice is an early Manila start, a night shift, or asynchronous working with a fixed overlap window.
Night work carries a statutory differential of at least 10 percent for hours between 10pm and 6am, and it is the largest single driver of attrition in this arrangement. Companies that decide the shift before writing the job description do considerably better than companies that discover it in month 3.
For a UK company this is manageable with a shifted Manila start and a real afternoon overlap. For a US company there is no arrangement where both sides keep standard hours, and the choice is an early Manila start, a night shift, or asynchronous working with a fixed overlap window.
Night work carries a statutory differential of at least 10 percent for hours between 10pm and 6am, and it is the largest single driver of attrition in this arrangement. Companies that decide the shift before writing the job description do considerably better than companies that discover it in month 3.
Where the surprises usually are
Statutory cost. Employer contributions plus 13th month pay add roughly 11 to 16 percent depending on seniority, falling as salary rises because SSS, PhilHealth and Pag-IBIG all cap out. Budgeting from salary alone understates the number.
Payroll cadence. Wages are paid at least twice a month at intervals not exceeding 16 days, which is a cash planning detail that catches companies used to monthly cycles.
Security of tenure. There is no at-will employment. Ending an employment relationship requires a just or authorised cause and the correct process, which changes how probation and documentation should be handled from day 1 rather than at the exit.
Coordination. Around the fourth hire, the constraint stops being capacity and becomes decisions. This arrives earlier than most plans assume.
Payroll cadence. Wages are paid at least twice a month at intervals not exceeding 16 days, which is a cash planning detail that catches companies used to monthly cycles.
Security of tenure. There is no at-will employment. Ending an employment relationship requires a just or authorised cause and the correct process, which changes how probation and documentation should be handled from day 1 rather than at the exit.
Coordination. Around the fourth hire, the constraint stops being capacity and becomes decisions. This arrives earlier than most plans assume.
The entity question, and why it usually has not arrived
At 5 people it generally has not.
Building your own Philippine entity generally requires around USD 200,000 in paid-up capital under the Foreign Investments Act and up to 5 months of setup. A widely used rule of thumb puts the crossover somewhere around 10 to 15 people, with the real drivers being that capital lock, the setup time, and whether you need a local finance and human resources function.
Companies that go straight to entity setup for an early team frequently find themselves most of a year in with nobody hired.
Building your own Philippine entity generally requires around USD 200,000 in paid-up capital under the Foreign Investments Act and up to 5 months of setup. A widely used rule of thumb puts the crossover somewhere around 10 to 15 people, with the real drivers being that capital lock, the setup time, and whether you need a local finance and human resources function.
Companies that go straight to entity setup for an early team frequently find themselves most of a year in with nobody hired.
What determines whether it works
Not the calibre of the individual hires, which at this size is rarely the binding constraint given the depth of the market.
Three things decide it. Whether the first hire was strong enough to set a standard. Whether someone owns coordination before quality drops. And whether the shift arrangement is one people will still accept in year 2.
All 3 are decisions made before anybody is hired, which is why the specification stage repays more attention than the search stage.
Three things decide it. Whether the first hire was strong enough to set a standard. Whether someone owns coordination before quality drops. And whether the shift arrangement is one people will still accept in year 2.
All 3 are decisions made before anybody is hired, which is why the specification stage repays more attention than the search stage.
Hiring in the Philippines?
Book a 30-minute call. We scope your role, share market context, and confirm a realistic timeline. No pitch, no pressure.
Book a FREE 30-minute callKeep reading