Oh my goodness Phillippine jail cells?
I agree that if you can add extra value you will keep clients even though there are people offering the service for a much lower price. I'm sure many of my clients know they could find someone at a lot lower rate than me, but do they want to bother going out and searching, possibly finding someone who's not as good and having to then search again, etc..? probably not.
I posted about Tim Ferriss' 4-hour workweek' on my blog, which talks about outsourcing to india for $5/hr. It's funny because now a lot of people doing a search find my site w