German businesses in the Philippines perceive the economic environment in the country as optimistic, but cites hurdles hampering competitiveness.
This is according to the Asean Business Climate Survey conducted by the network of German Chambers of Commerce in the region.
The German-Philippine Chamber of Commerce Inc. (GPCCI) recently conducted the local edition of the survey, and found that 46.67 percent of the 60 respondents rated the overall economic environment of the Philippines as “good.”
This tied with an equal number of respondents rating the economy as “satisfactory,” while only four respondents perceive the overall economic climate as “bad.”
The survey measured German companies’ business confidence, growth expectations, and investment sentiment in the Philippines.
A separate part of the survey queried companies on specific indicators of their performance.
According to GPCCI, respondents are mostly from the manufacturing sector, mainly from the machinery, automotive, electrical equipment, chemical and food industries, as well as some sectors in the services sector (health, logistics and engineering).
Another notable feature is that half of the respondents, or 50.85 percent, see the economic setting as progressively getting better since the last survey in 2014.
Certain areas of concern, however, were raised in the survey.
“Now is the right time for German companies to… invest in the Philippines or extend their business. There are still bureaucratic hurdles and tax burdens making it difficult at the moment to decide for the Philippines. However, the European companies trust in the Philippine government to level the playing field with regards to the other Asean member countries,” said Dr. Bodo Goerlich, GPCCI president, in a statement.
Aside from the tax burdens, the GPCCI head also said that in terms of policies and regulations, trade barriers to imports are also hurdles for German companies.
The outlook of German companies in the Philippines mirror that of the region as a whole, as German businesses in the Asean region judge the current overall economic situation also satisfactory.
Only 17.0 percent of the respondents rated the overall economic situation as bad and 27.0 percent of the respondents rated it as good.
Compared to 2014, the percentage of respondents rating the economic situation as bad has increased by 4 percentage points and respondents that rated it as good decreased from 32.6 percent in 2014.
These numbers also indicate that the overall economy situation is seen weaker compared to 2014.
A common concern to Asean nations in view of the upcoming economic integration at the end of the year is labor mobility, according to the survey conducted by the seven German Chambers of Commerce and Industry in the Asean region who have formed the German Asean Chamber Network (Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam).