2019 AHK ASEAN Business Outlook Survey: The Philippines – a Bullish Economy
The 2019 AHK World Business Outlook survey reiterates the German companies’ bullishness regarding the Philippine market despite global uncertainties and local policy adjustments.
According to the study, more than 70% of respondents evaluate their current business situation in the country as “good”. This is a 5% increase compared the last year’s survey. Similar positive figures persist when it comes to business expectations in the next 12 months with almost two thirds anticipate growing business opportunities. Additionally, more than 53% say that they intend to increase their workforce.
Investment spending remains high, with almost a half (47%) of participants report that they have increased expansion plans. Additionally, 42% of the respondents claim to have the same amount of investments in the pipeline as last year. Although high, these positive numbers are lower than last year as the final design of a corporate tax and incentive reform is not yet clear.
The development of German businesses in the Philippines continue to face challenges. A plurality of respondents (46%) describe that economic policies mainly contribute to business challenges in the next 12 months. Exchange rate volatility comes in second at 36%. Sharing the third place (34%) are challenges in securing skilled labor and international / domestic market demand. Meanwhile, concerns on infrastructure seem to have lost its momentum from 3rd place last year as the government’s “Build, Build, Build” program – with planned investments of up to USD 160 billion – shows its first results.
When it comes to the business climate at large, political stability and corruption are considered to be the most significant factors influencing the business climate with ratings of more than 50% of the total respondents.
With regard to the ASEAN Free trade agreement, companies emphasize the important influence of this cooperation.
Overall, the positive and confident business outlook of this survey reflects the general economic situation in the Philippines where the GDP is expected to grow – for the 8th consecutive time - by more than 6 % in 2019.