Contracts, Monitoring, and Honesty: Ethical Issues in Philippine Virtual Assistant Start-up Agencies

1Introduction

1.1Background of the study

The Philippine information technology and business process management (IT-BPM) industry is one of the country’s largest sources of foreign income. It ended 2025 with about US$40 billion in export revenue and around 1.9 million workers, and its industry group expects US$42 billion and close to 1.97 million jobs in 2026 [1].

Outside the large call centers, many Filipinos now work from home as virtual assistants (VAs). They handle email, scheduling, bookkeeping, social media, customer support, and similar tasks for clients in other countries. There is no official count, but one industry adviser estimates the number of Filipino VAs at around one million [2]. The Department of Labor and Employment (DOLE) describes a VA as “a self-employed worker who specializes in offering administrative services to clients from a remote location” [3].

Many VAs find clients on their own through websites such as Upwork and OnlineJobs.ph. A growing number, however, work through VA agencies. An agency finds clients, recruits and trains VAs, places them with clients, and handles billing and day-to-day concerns. In return, it keeps part of what the client pays. Many of these agencies are started by former VAs who had more work than they could handle alone. Because an agency needs little more than a laptop, an internet connection, and a few clients, it is one of the easiest service businesses to start.

This ease of entry comes with ethical questions. The agency stands between a foreign client and a Filipino worker, so the owner must decide early on how much to pay workers, whether to give benefits, how closely to watch their work, how honestly to describe their skills to clients, and how to protect client data. These decisions often have to be made without clear legal guidance. A University of the Philippines law lecturer told Agence France-Presse that VA work falls under no existing government category, and that no law forces employers outside the country to honor agreements with Philippine-based workers [2]. A Freelance Workers Protection Act has been filed in several versions in the 20th Congress [4, 5], but it has not yet become law.

For a new business, choices made at the start tend to become habits as the business grows. Knowing which ethical issues new VA agencies face can help future founders plan for these issues instead of only reacting to them.

1.2Statement of the problem

This study describes the ethical issues reported by owners and managers of start-up VA agencies in the Philippines. Specifically, it answers the following questions:

1. 1. What ethical issues do owners and managers encounter in starting and running a VA agency?
2. 2. Whom do they consult, and how do they decide, when facing these issues?
3. 3. What policies and practices have they adopted, or do they recommend, to manage these issues?

1.3Significance of the study

The results of this study may be useful to the following:

1. 1. Agency founders and aspiring entrepreneurs, who can plan for common ethical issues before these happen.
2. 2. Virtual assistants, who can learn what practices to look for when choosing an agency.
3. 3. Foreign clients, who can use the results to choose agencies that treat workers fairly and protect data.
4. 4. Government offices and lawmakers, such as DOLE, the Department of Trade and Industry (DTI), the Department of Information and Communications Technology (DICT), the National Privacy Commission (NPC), and Congress, who need field data for policies on remote workers.
5. 5. Business schools, which can use the VA agency as a local case for teaching ethics in new enterprise planning.

1.4Scope and limitations

The study covers 15 owners, co-owners, and operations managers of VA agencies operating in the Philippines for five years or less, who answered an online questionnaire in October 2026. It describes what they report. It does not check their answers against the views of VAs or clients, measure how serious each issue is, or test relationships between variables. The results describe the respondents only and cannot be applied to all VA agencies in the country.

2Review of related literature

2.1Remote digital work

Wood, Graham, Lehdonvirta, and Hjorth [6] studied remote online workers in Southeast Asia and Sub-Saharan Africa through 107 interviews and a survey of 679 workers. They found that online work platforms control workers through ratings and other automated systems, and that the freedom of remote work often comes with low pay, long hours, and isolation. Kalleberg [7] calls this kind of arrangement precarious work: work that is uncertain, unpredictable, and risky from the worker’s point of view. When a VA agency places workers with foreign clients on short or informal contracts, it may pass this same insecurity on to its VAs.

2.2Filipino online freelancers

Soriano and Cabañes [8] interviewed 31 online freelancers in Manila, Cebu, and Davao who get work from platforms such as Upwork and OnlineJobs.ph, and observed their Facebook groups. They found that these groups help freelancers share tips, warn each other about bad clients, and support one another. They also found that the groups mostly help members cope with existing conditions rather than push for better ones. This matters for the present study because many VA agency owners come from these same online communities.

The Fairwork Philippines 2022 report rated nine local digital labor platforms on five principles: fair pay, fair conditions, fair contracts, fair management, and fair representation. Most of the platforms could not show that they met basic fairness standards [9]. The report covered ride-hailing and delivery platforms, not VA work, but its five principles are a useful checklist for judging how a VA agency treats its workers.

2.3Philippine rules that affect VA agencies

Four sets of rules shape the ethical choices of a VA agency owner (Table 1).

Rule	What it requires	Question it raises for an agency
Data Privacy Act of 2012 (RA 10173) and its IRR [10, 11]	Those who handle personal data must use reasonable organizational, physical, and technical security measures	How much client data may a VA see, and who is responsible if it leaks?
NPC Circular 16-03 [12]	Data breaches that require notice must be reported to the NPC and to affected persons within 72 hours	Will the agency report a breach caused by its own VA?
DOLE Department Order 174, s. 2017 [13, 14]	Bans labor-only contracting; a later DOLE circular said it does not cover IT-enabled outsourcing of a business process	Are agency VAs truly independent contractors, or employees in practice?
TRAIN Law (RA 10963), BIR RMO 23-2018, and Social Security Act of 2018 (RA 11199) [15–18]	Self-employed persons earning up to ₱3 million may choose an 8% tax on gross receipts above ₱250,000; self-employed SSS members pay the full 15% contribution	Does the agency register, pay taxes, and help VAs get social protection?

Under the Data Privacy Act, a VA agency that handles a client’s customer records usually acts as a personal information processor, while the client is the personal information controller [11]. This means the agency owner carries legal duties for workers whom the owner may never meet in person.

2.4Ethics in new businesses

Stinchcombe [19] observed that new organizations are more likely to fail than older ones because they lack set routines, a track record, and resources. This idea later became known as the “liability of newness.” Under this pressure, founders may put off ethical and legal duties until the business is stable. The VA agency model adds to this temptation because the agency’s income comes from the gap between what the client pays and what the VA receives, and because many rules are unclear.

2.5Theoretical framework

Two theories guide this study. Stakeholder theory [20] holds that managers have duties to everyone affected by the business, not only to its owners. For a VA agency, the main stakeholders are the foreign clients, the VAs, the clients’ own customers whose data VAs handle, and the Philippine government. Carroll’s pyramid of corporate social responsibility [21] arranges a firm’s duties in four levels: economic (to make a profit), legal (to obey the law), ethical (to do what is right beyond what the law requires), and philanthropic (to give back to society). Together, the two theories shaped the questionnaire items, which ask who is affected and which duty is at stake, and they are used to interpret the results.

2.6Research gap

Studies on Filipino digital workers have focused on individual freelancers and online platforms. Few, if any, have looked at the small agencies that now stand between them, and none that the authors found has asked agency founders about the ethical issues they face. This study helps fill that gap.

3Methodology

3.1Research design

This study used a descriptive research design. It describes the respondents’ agencies, the ethical issues they report, the people they consult, and their policies as these are, without changing any conditions or testing hypotheses.

3.2Respondents and sampling

Fifteen owners, co-owners, or operations managers of VA agencies served as respondents. They were reached through purposive sampling in Philippine VA and freelancer online communities, followed by snowball referrals. To take part, respondents had to confirm all of the following:

1. 1. They are the owner, co-owner, or operations manager of a VA agency based in the Philippines.
2. 2. The agency has operated for five years or less.
3. 3. The agency places or manages at least three VAs serving clients outside the Philippines.
4. 4. They have held their role for at least six months.

All 15 respondents gave their consent and confirmed that all four criteria applied to them.

3.3Research instrument

The instrument was a researcher-made online questionnaire built in Google Forms (see Appendix A). It has 20 items in five sections: (1) informed consent, (2) eligibility, (3) agency and respondent profile, (4) ethical issues and practices, and (5) optional follow-up. Section 4 has checklist items on issues encountered and sources of advice, plus open-ended items matched to the three research questions. The items were based on the literature and the theoretical framework and were reviewed by [number] experts in business ethics, research methods, and the VA industry.

3.4Data gathering procedure

The questionnaire link was shared online with qualified agency owners and managers, who answered it on their own. Responses were collected in October 2026 and exported from Google Forms to a spreadsheet. Each respondent was given a code (R1 to R15) based on the order of submission.

3.5Data analysis

Profile and checklist items were analyzed using frequency counts (f) and percentages, computed as (f ÷ 15) × 100. For checklist items that allowed more than one answer, percentages are based on all 15 respondents, so totals may go over 100%. Tied items were given the average of their ranks. The open-ended answers were too few to group into themes, so they are quoted as typed by the respondents to illustrate the numbers.

3.6Ethical considerations

The study protocol was submitted to [name of Research Ethics Committee] and approved on [date, approval number]. The first page of the questionnaire explained the purpose of the study, that taking part was voluntary, and that respondents could skip questions or stop at any time. Respondents could go on only after giving consent. No names or agency names were collected, contact details were optional, and the data were kept in password-protected files in line with the Data Privacy Act of 2012 [10].

4Results

4.1Profile of respondents

The respondents were evenly split among owners, co-owners, and operations managers, with five in each group (Table 2). Most led young, small agencies: seven agencies (46.7%) had operated for less than a year, and ten (66.7%) placed or managed 3 to 10 VAs. Twelve respondents (80.0%) had worked as VAs before, and nine (60.0%) were based in Luzon.

Characteristic	Category	f	%
Role	Owner	5	33.3
	Co-owner	5	33.3
	Operations manager	5	33.3
Agency operating	Less than 1 year	7	46.7
	1–2 years	5	33.3
	3–5 years	3	20.0
VAs placed or managed	3–10	10	66.7
	11–30	4	26.7
	More than 30	1	6.7
Time in current role	6–12 months	5	33.3
	1–2 years	4	26.7
	More than 2 years	5	33.3
	No answer	1	6.7
Location	Luzon	9	60.0
	Visayas	4	26.7
	Mindanao	2	13.3
Former VA	Yes	12	80.0
	No	3	20.0

Clients were most often based in Australia (53.3%), followed by Canada and Europe (40.0% each). Bookkeeping was the most common service (66.7%), followed by e-commerce support (46.7%) and real estate support (40.0%) (Table 3).

Item	Category	f	%
Main client locations	Australia	8	53.3
	Canada	6	40.0
	Europe	6	40.0
	USA	5	33.3
	United Kingdom	2	13.3
Services offered	Bookkeeping	10	66.7
	E-commerce	7	46.7
	Real estate support	6	40.0
	Administrative support	5	33.3
	Customer service	4	26.7
	Social media / marketing	4	26.7

4.2Ethical issues encountered

VA benefits and contracts was the issue reported most often, by 10 of the 15 respondents (66.7%). Monitoring of VAs came second (53.3%), and honesty with clients about VA skills came third (40.0%) (Table 4). On average, each respondent reported 2.6 issues, with a range of 1 to 7. No respondent chose business or tax registration, and no one added an issue under “Other.”

Ethical issue	f	%	Rank
VA benefits and contracts	10	66.7	1
Monitoring VAs	8	53.3	2
Honesty with clients about VA skills	6	40.0	3
Client data privacy	5	33.3	4
Fair pay and agency fees	4	26.7	5.5
Charging applicants fees	4	26.7	5.5
Non-compete clauses	2	13.3	7
Business or tax registration	0	0.0	8

Three respondents described an issue in their own words. R2 wrote, “A client tried to lower agreed hourly rate after the first week of working.” R3 wrote, “editing their time,” and R4 wrote, “not honest.” R2 also named the hardest decision as “choosing to turn down high-paying projects that didn’t align with our long-term strategy or capacity.”

4.3Sources of advice and decision-making

When unsure of what is right, most respondents consulted a lawyer or accountant (80.0%). Other agency owners and online groups tied for second (53.3% each), followed by family or friends (40.0%). No respondent chose a faith or spiritual adviser or “No one” (Table 5).

Source	f	%	Rank
Lawyer or accountant	12	80.0	1
Other agency owners	8	53.3	2.5
Online groups	8	53.3	2.5
Family or friends	6	40.0	4
Faith or spiritual adviser	0	0.0	5.5
No one	0	0.0	5.5

Three respondents described how they handled a specific dilemma:

“A client asked me to monitor a VA’s screen all day without telling them. I decided to be transparent and propose a time-tracking tool instead of covert spyware.” (R2)

“fire that persom” [sic] (R3)

“did not time in properly” (R4)

4.4Policies and recommendations

Only two respondents described their agency’s written policies. R2 wrote, “Our agency protects clients and contractors using a comprehensive Independent Contractor Agreement alongside a strict Non-Disclosure Agreement (NDA).” R3 wrote, “clauses.” The same two respondents gave recommendations. R3 wrote, “have a lawyer.” R2 wrote:

“Owners must ensure fair wages and transparent pricing. VA associations should establish a unified, verifiable certification code of ethics. Meanwhile, the government needs to update labor regulations to protect remote freelancers from exploitation and clearly define digital contract work.” (R2)

Across the six open-ended items, only two to three of the 15 respondents gave an answer to each. Twelve respondents left all open-ended items blank, and R4 wrote “n.a” for four of the six. None of the 15 agreed to a follow-up interview.

5Discussion

5.1Worker benefits and contracts come first

VA benefits and contracts was the issue reported most often (66.7%). This is not surprising, since VA work fits no clear legal category and the Freelance Workers Protection Act is still pending [2, 4]. With no clear rule, each owner has to decide alone what a VA is owed. If the agency treats VAs as independent contractors, the VAs must pay their own social security contributions in full [18] and usually have no paid leave. This matches the insecure work that Kalleberg [7] describes and the weak contracts that Fairwork [9] found on local platforms. R2’s only written policy, an independent contractor agreement with a non-disclosure agreement, shows a common approach: the agency protects itself through contracts rather than by giving benefits.

5.2Monitoring cuts both ways

Monitoring of VAs ranked second (53.3%). Wood et al. [6] found that close tracking is central to remote online work. For VAs placed by an agency, it is often the agency that decides how much tracking takes place. R2 described refusing a client’s request to secretly watch a VA’s screen all day, and offering instead a time-tracking tool that the VA would know about. In stakeholder terms [20], R2 weighed what the paying client wanted against the worker’s right to know. The short answers of R3 (“editing their time”) and R4 (“did not time in properly”) point to the opposite worry: owners who suspect VAs of misreporting their hours. Monitoring is therefore a problem in both directions. Agencies must protect VAs from too much watching, and must also protect clients from paying for time that was not worked.

5.3Honesty with clients

Four in ten respondents (40.0%) reported issues about honesty with clients regarding VA skills. An agency earns only when its VAs are placed, so there is pressure to describe workers as more skilled or experienced than they really are. In Carroll’s terms [21], this is a clash between the economic duty to earn and the ethical duty to tell the truth. Over time, overselling can also cost the agency its reputation once clients find that a VA cannot do the job.

5.4Data privacy may be overlooked

Only a third of respondents (33.3%) reported client data privacy as an issue. Yet VAs often log in to client email, customer lists, and payment systems. Under the Data Privacy Act, an agency that handles such data has legal duties as a personal information processor [11], including helping report breaches within 72 hours [12]. The low figure may mean that these agencies have had few problems, or that owners do not yet see the handling of data as an ethical issue. This study cannot tell which.

5.5Advice from professionals and peers

Most respondents (80.0%) consulted a lawyer or accountant. This suggests that young agency owners see ethical questions partly as legal or money questions. Peer sources were also common: other agency owners and online groups (53.3% each). Since 80.0% of respondents were former VAs, this agrees with Soriano and Cabañes [8], who found that Filipino freelancers rely on online groups to share know-how. Peer advice is fast and free, but it can spread shortcuts as easily as good practice.

5.6Young agencies under pressure

Almost half of the agencies (46.7%) were less than a year old. Stinchcombe [19] noted that new firms face a higher risk of failure, and this risk can push owners to put survival ahead of legal and ethical duties. No respondent reported business or tax registration as an issue. This may mean that all the agencies are registered, or that owners do not see registration as a matter of ethics. The questionnaire did not ask whether agencies were registered, so this cannot be confirmed.

5.7Implications for new enterprise planning

The results suggest that a business plan for a VA agency should cover more than the market, pricing, and staffing. Before signing the first client, the founder should be able to answer the following:

1. 1. How will VAs be engaged, as employees or as contractors, and what benefits will they receive? The cost of these benefits should be built into client rates.
2. 2. What monitoring will be used, and how will VAs be told about it?
3. 3. How will VA skills be checked and described to clients?
4. 4. Who can access client data, and what will the agency do if there is a breach?
5. 5. Where will the owner get legal and accounting advice, and how much will it cost?

Settling these questions at the start costs less than fixing them after a dispute with a client or a worker.

5.8Limitations

This study has six main limitations. First, the sample is small and was not randomly chosen, so the results describe these 15 respondents only. Second, the results rely on what respondents reported about themselves. Third, the checklist may have led some answers and left out others, and it does not show how serious each issue was. Fourth, only 3 of the 15 respondents answered the open-ended items, and none agreed to a follow-up interview, so the second and third research questions are only partly answered. Fifth, two respondents reported holding their role for more than two years in agencies that had operated for less than a year. This may reflect work that began before the agency was formally organized, but it could not be confirmed. Sixth, the data were gathered over a single period. Future studies should make open-ended items required, hold follow-up interviews, and survey a larger sample to compare issues by agency age and size.

6Conclusion and recommendations

6.1Conclusion

On the first research question, the respondents, who were mostly former VAs leading agencies less than two years old, most often encountered ethical issues about VA benefits and contracts, the monitoring of VAs, and honesty with clients about VA skills. Issues about client data privacy, fair pay, applicant fees, and non-compete clauses were reported less often.

On the second research question, owners and managers who are unsure of what is right rely mainly on lawyers or accountants, with other agency owners and online groups as the next most common sources. The one detailed account showed a decision guided by openness toward the affected worker.

On the third research question, the policies reported centered on contracts, specifically independent contractor agreements and non-disclosure agreements, although data on policies were very limited.

6.2Recommendations

Based on the findings, the following are recommended:

1. 1. VA agency founders should decide at the start how VAs will be engaged and what they will receive, and put this in a written contract that also states rates, the agency’s fee, the scope of work, and the terms for ending the engagement.
2. 2. VA agency founders should adopt a written monitoring policy that tells VAs what is tracked and why, and should decline requests for secret monitoring.
3. 3. VA agency founders should adopt a data protection policy covering who can access client data, how passwords are managed, and what to do in case of a breach, in line with RA 10173.
4. 4. VA agency founders should never charge applicants fees as a condition for placement.
5. 5. VA associations should develop a voluntary code of ethics for agencies that covers contracts, monitoring, and honest description of VA skills, as R2 also suggested.
6. 6. DOLE, DTI, and DICT may issue guidance on the status of VAs placed by agencies while the Freelance Workers Protection Act bills are pending.
7. 7. The National Privacy Commission may publish a simple data privacy guide for small outsourcing agencies.
8. 8. Future researchers should repeat this study with required open-ended items and follow-up interviews to explain how owners decide on the issues found here.

Acknowledgments

The authors thank the 15 VA agency owners and managers who took the time to answer the questionnaire.

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