The song is alright. It loops perfectly, but it lacks more variation. It may be too repetitive. That, may not be a problem when you encounter a tropical village in your travels, buy some potions, some coconuts, and then leave, but it could be if you are going to spend some time in it like, who knows, completing some quests that requier to walk from one house to another, talking with different npcs, it could be a little annoying. So in that way, it could be perfect, or not, depending on the way you are going to use it. Also, it is good to remember that the music takes up much space in a game, and it is always good to have songs as short as possible, while not being excessive.
In my opinion, the percussion is great, and combined with the instruments used, helps the song to perfectly transmit its intention. I can perfectly imagine myself walking on a little tropical village, and that is very important when making game music.
Overall, I think the song would work very well combined with some ambient sounds.
Good Day =)