Should I Hire Software Developers in Costa Rica or the Philippines?

When you’re looking outside of the US for skilled software engineers, you may think of Asian markets like the Philippines first. After all, the region has long been considered a top destination for tech talent, given the high concentration of low-cost developers.

But in recent decades, Latin America has emerged as a go-to source of quality engineers—ones who not only have the necessary technical skills but also possess strong soft skills and cultural similarities to their US counterparts. Costa Rica, for example, boasts a robust and growing workforce of skilled software engineers and other tech talent across hubs like San José, Heredia, Santa Ana, Alajuela, and Cartago.

So, should you hire software developers in Costa Rica or the Philippines? Let’s take a look at the strengths and weaknesses of each option.

Business Environment and Economic Growth

Both Costa Rica and the Philippines have favorable business environments and are showing economic growth. However, Costa Rica has shown greater political and economic stability in recent years. While it has a relatively smaller market, its focus on technology and its highly skilled engineering pool make it appealing.

Meanwhile, the Philippines’ economic outlook is less certain, as the country deals with challenges like political instability. In December 2025, the OECD downgraded its economic projections for the rest of 2025 and 2026, with Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan saying the country was “very unlikely” to achieve its growth target.

This instability can make it riskier to work with software engineers in the Philippines, as opposed to when you hire software developers in Costa Rica.

Costa Rica, on the other hand, has seen strong business and economic growth, particularly in the technology sector, with the country investing heavily in the industry.

Education

Costa Rica has long been prioritizing education, particularly in terms of digital readiness, beginning in primary school. At the end of 2024, the World Bank and the Ministry of Public Education (MEP) in Costa Rica announced the Costa Rica Results in Education initiative to benefit one million students in public primary and secondary schools, helping the country improve foundational learning, digital competencies, and employability skills.

Among other areas, the project supports the creation of the National Program for Technological Preparedness, boosting computational thinking instruction. 

This is just one example of Costa Rica’s commitment to promoting digital skills in its population. Recently, the National Institute of Learning of Costa Rica (INA) signed a General Collaboration Agreement with Ericsson to promote collaboration among experts, teachers, and students with the goal of enhancing the development of digital skills, providing tools for digital transformation, and leveraging the full power of 5G technology.

Today, Costa Rica boasts highly affordable tech education at institutions like Universidad de Costa Rica (UCR) and TEC (Technology Institute). 

Unfortunately, education in the Philippines has been less of a priority. Filipo students score significantly lower than the OECD average in creative thinking (14/60, compared with the OECD average of 33).  Meanwhile, more than 35% of public schools in the Philippines have no internet, and roughly 20% have no functioning computers.

Education is lagging, with schools failing to teach students important modern skills that are necessary for today’s work environment—including core concepts like digital problem-solving. While the Philippines is attempting to build a more robust and modern educational ecosystem through reforms, it is not yet keeping pace with many other countries with high concentrations of tech talent like several in Latin America.

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Location and Time Zone Alignment

The Philippines observes Philippine Time (PHT), which is 13 hours ahead of New York City and 16 hours ahead of San Francisco (no DST). Costa Rica, meanwhile, is in Central Time (CT), in the same time zone as Chicago, just one hour ahead of San Francisco and one hour behind New York City (no DST).

Asynchronous collaboration is not impossible, of course. However, sharing the majority of your business hours can facilitate stronger collaboration and remove communication barriers.

For example, you can have meetings in real-time, allowing you to troubleshoot issues without delay. You can also read nonverbal cues, which makes it easier to understand one another. This is possible when you hire software developers in Costa Rica. It’s not the case with those in the Philippines, given the large time discrepancy. 

Integration into company culture can also be a problem, since Filipo engineers are unlikely to be able to communicate with their teammates face to face, making it difficult to develop rapport. 

Internet Usage and Pervasiveness

Digital usage is a bit higher in Costa Rica than in the Philippines: 92.5% vs. 89.3% in 2024. This is a testament to the developing nature and dedication of the Latin American country to ensuring widespread internet access. It also speaks to the population’s ability to gain critical digital skills, which are necessary, of course, for any software engineer.

Relatedly, as both countries see internet usage expand, they also grapple with an increase in cyber attacks. The Philippines faces high instances of threats, which can put businesses working with developers in the market at risk. The country does react to widespread instances, but Costa Rica has instituted a National Cybersecurity Strategy to build resilience and prioritize security before attacks happen.

Conclusion: Should I Hire a Software Developer in Costa Rica or the Philippines?

While Costa Rica and the Philippines both offer tech talent at an affordable price tag, Costa Rica’s growing pool of skilled software engineers, nearshore alignment, similar culture, educational initiatives, and evolving digital scene make it the better choice for hiring quality developers.

If you’re looking for top software engineers in Costa Rica and beyond, partner with Terminal. We vet talented professionals in Latin America, Europe, and Canada. Only the top 7% pass our rigorous screening, so you can rest assured that the contractor or full-time developer you work with is among the best of the best.

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