Every business owner in the Philippines should avoid these contractors if:

Everything a business owner should know before signing a commercial space construction contract in the Philippines.

Everything a business owner should know before signing a commercial construction contract in the Philippines is in this letter.

If I had this, to read a year ago, it could’ve saved us at least 20 million pesos.

Meaning: this entire guide can save you anywhere from 0 to 20 million pesos, minimum.

Before we get to the 20 million pesos burning part, you need to know how I met the guy who burned it for us.

Which brings us to…

They are responsible for an incomplete building

This is first because it should’ve been obvious.

Obvious even to me (an up-and-coming, relatively young spa owner).

Sadly, it wasn’t obvious enough when my mother and I saw a building with more vacant units than occupied.

We walked toward the vacant units, curious just how cheap we could get a place that would earn us millions of pesos.

A vacant space big enough (roughly 70 sqm) to plant the seeds of our big plans, with small rent and an even smaller foresight.

We told the agent (spoiler alert: not really an agent):

“We’ll take 8 units.”

The agent happily replied:

“I’ll tell the building owner.”

We didn’t even hesitate to ask:

“Does he do construction also?”

They are experts in structure but not finishing (if renting commercial space)

I know, right? How f— dumb could I get?

I was so blinded by the fact that we got a giant space for a miniature price and a contractor who can build a building.

If he can build a building, he can easily build a spa. RIGHT??

NO! I’ve never been further from a YES in my entire life!

I couldn’t understand how I thought that someone with perfect bones equates to someone having perfect skin.

In case you didn’t get it yet:

Bone = Structure = The foundations of the building that keep the interior in check

Skin = Finishing = What the end user sees

I let my assumptions (and lack of research) get the best of me. I rushed this deal, shook hands, signed the check, and signed the contract.

Speaking of contracts..

Their construction contract does NOT include a timeline and payment schedule.

After my signing spree, I went home already envisioning myself as the next Henry Sy.

I called my business partner—aka my brother-in-law—and said:

“You can go to China and get our materials; the deal is done!”

He went to China, gathered all our materials, and purchased everything we thought was necessary.

When all was said and done, we had three 40-cubic foot containers parked outside our “good-deal” location.

Our plans and files were served to our chosen contractor on a silver platter: plumbing, electrical, CAD files, 3D render—you name it.

They just had to follow it.

Day 1-14: Plumbing = Done

Day 15-21: Walls = Done

Day 22-100: Spa = No progress

Day 101: Our other business partner was getting impatient.

She asked, “When will the first spa in the Philippines open?”

I didn’t know much about construction, but I knew then that we weren’t even close to finishing the entire project.

I called our contractor to ask when we could expect the spa to be finished, and he simply noted, “I don’t know, I probably need 30 more days.”

Day 131: Spa = Still no progress.

Like clockwork, every morning I called our contractor asking the same question, only to receive the same answer: 30 more days.

Day 181: Spa = Completed.

Our expected 90 days turned into 180 days. It might not seem like a big deal, but here are the additional expenses:

✅ 90 more days of salary paid

✅ 90 more days of rent paid

✅ 90 more days of food paid

✅ 90 more days of stress

✅ 90 more days of an unopened shop, with an estimated loss of 1.2M/month

By now, you should get it. This was an expensive series of mistakes that could’ve been avoided if we’d held our contractor accountable from the start.

To avoid the same mistakes I made, I prepared a short checklist for you:

Accountable Contractor Checklist

Checklist #1: Visit Their Past Projects

If you’re looking for a contractor for your business, ask for their portfolio. You should know and see their past and current projects before making a deal with them.

Personally visit some of their past projects to ensure their finishing meets your standards. Some projects, like gyms and studios, are simpler on the finishing side, while others, like premium cafes and spas, require a higher level of expertise.

Checklist #2: Understand Their Current Projects

Having an idea of how many projects a contractor currently has and their progress will give you insight into whether their promises to you are realistic.

For instance, if your contractor has a team of 100 workers and you’re their 10th client with a 90-day timeline, it may not be feasible.

Checklist #3: Have an Expert Review the Contract

Just like employment contracts, it’s always worth having a labor expert (attorney) review it before signing.

For construction contracts, have both an attorney and a seasoned contractor look at it before you commit.

They should understand the ins and outs of construction—ways to save the most money and ways you could potentially lose it.

Even now, as I prepare for our second branch, with all the experience I gained from the first one, I’ll still have an expert review my next construction contract.

One painful experience in construction taught me a lot, but I know it’s not enough. I’ll rely on someone with far more experience to ensure the next agreement is in my favor.

A Short Letter to My Last Contractor:

If you’re seeing this, I’d just like to say:

I’m sure there was no malicious intent in how our project progressed. You weren’t perfect, but you were kind to us and taught us a lot, both intentionally and unintentionally.

I’d still refer you to others who are looking—I already have. I’d still hire you as our contractor for our next project.

I just need to do a couple of things differently next time around.