They might want to listen to some of their fellow entrepreneurs who have invested in the Mactan Economic Zone (MEZ) in the central Philippines.

As with any location, problems exist, but to hear Taiwanese investors tell it, Filipino workers are obedient, loyal and easy to communicate with, and companies benefit from tax breaks, freedom from political interference and a pristine natural environment.

The MEZ, established on Jan. 15, 1979, is one of four government-owned zones under the administration of the Philippine Economic Zone Authority (PEZA). Covering a land area of 150 hectares, it is only 500 meters away from the international airport and 14 kilometers away from a port.

The zone,which began with two tenants in 1980 --TMX Philippines, Inc. and Fairchild Semiconductor -- was home to 108 companies employing 49,943 workers as of the end of December, 2007.

Among the 108 companies operating there, 54 percent are Japanese, 16 percent are Filipino and 12 percent are Taiwanese-owned businesses.

The Philippines often trails behind China, Vietnam, Indonesia and India as a "hot" destination for new manufacturing investments, in part because of concerns over labor quality and personal safety, but Taiwanese investors in the MEZ have found Filipino workers and the environment provided by the Philippine government to their liking.

"Filipino workers are optimistic and obey the the instructions of their employers," said Rain Chien, director of the Corporate Service Division at Metro Wear Inc., in an interview with the Central News Agency last week.

Jacky Chen, general manager of Tong Fang International Limited that opened a factory in the MEZ in 1996 to produce wrist watch dials, also commended Filipino workers as "really loyal to their company."

"They are also cute. As Taiwanese businessmen here in the Philippines, we always feel respected by them," said Chen, whose factory had sales of US$4.5 million in 2007.

Echoing Chen, Peter Liao, president and CEO of Headway Caps International Co., Inc., said that Filipinos are not against people of Chinese ancestry.

"On the contrary, people of Chinese origin in the Philippines are respected with dignity," Liao commented.

Chien, Chen, and Liao agreed that the English skills of Filipino workers was another key advantage compared to their counterparts in Vietnam, making communications between employers and employees much easier.

Ken Yu, a special assistant to the chairman (his father) at Paul-Yu Industrial Corp., a manufacturer and exporter of lamps, window blinds, screens, furniture, and home accessories, said that Filipinos are more open than Taiwanese and Chinese, resulting in more creative designs and products.

Also, "unlike in mainland China where everyone is eager to become a boss, workers in the Philippines are less ambitious," Yu added.

Aside from the quality of the labor force, the relatively open political environment in the Philippines and the Mactan Economic Zone's infrastructure have also proven attractive to foreign investors.

Noting that political interference from Chinese authorities has led to an "unstable" investment environment in the mainland, Chen said that investing in the Philippines is less complicated.

"Businesses don't have to worry about the political issues behind the investment," he said. "When I was working for our factory in China, I felt extremely uncomfortable when Chinese officials frequently visited my office."Political considerations were one of the main reasons that drove me to invest in the Philippines," he said.

Yu, whose company has already opened five factories in the MEZ since starting up in the Philippines in 2001 and intends to expand further in the near future, said that the infrastructure in Mactan "is really favorable to businesses."

He especially praised the zone's convenient location since it is in close proximity to an airport and port.

"I still feel that my decision to invest in the MEZ was correct," Yu emphasized without hesitation.

The financial incentives offered by the Philippine authorities also play a crucial role in luring not only Taiwanese businesses but also other foreign investors to open plants in the Philippines.

According to PEZA regulations, investors are given tax-exempt status for the first five years of their investment and also receive help in maintaining workforce stability.

"The Philippine government reduces our tax burden, which is really helpful to us and highly appreciated by investors, " said Chien, whose factory produces about 200,000 clothing items a month.

The PEZA guarantees that employees in the economic zones will not strike as long as the employers abide by local regulations, including paying the workers the nationally mandated minimum wage, which stands at approximately the equivalent of NT$200 for an eight hour day.

"There are many strikes in Vietnam, but within the economic zones in the Philippines, strikes will never occur if we follow PEZA regulations," Liao said.

While Chien, Chen, Liao and Yu all praised the MEZ's business environment, the four entrepreneurs, who have all lived and worked in China, were particularly enthusiastic about the high quality of life in the area, with its pleasant climate, natural beauty and lack of pollution.

"The sky in China is always gray from the heavy pollution, but in Cebu where Mactan is located, you quickly discover that the sky is always blue with plenty of sunshine," Yu said. "In the Philippines I spend more time on water sports, which is really good for my health." Liao said that his Taiwanese plant manager, Anson Wu, enjoyed life in the Philippines so much that he married a Filipino woman.

As with any location, the MEZ has idiosyncrasies that businessmen are forced to cope with if they want to be successful, and the entrepreneurs had some suggestions for those thinking about setting up a factory in the country.

Filipino workers are optimistic and cooperative, the four businessmen agreed, but they also noted that employers have to push the workers because they are really "passive."

"You have to supervise them even though you have given them instructions," Chen said. "Also, you cannot scold local workers in front of others because they are highly concerned about face."

Employers also need to organize social activities, such as birthday parties and outings, for the workers because these events are important to them, Chien and Liao suggested.

Another challenge is the rising Philippine Peso, and the Taiwanese businessmen hoped the government would pay more attention to controlling currency fluctuations and help local companies safeguard their revenues. On balance, however, the investors are happy to have located their factories in the central Philippines and hope to be there for a while.

"I sincerely hope that our investment in the Philippines is a long-term business," Chen said.