ALTHOUGH there are several challenges to hurdle as far as investing is concerned, the country still offers endless opportunities to investors if they make the right decisions, according to an investor who chose the country as his base for Southeast Asia.
“Even though the Philippines was once labeled the ‘sick man of Asia,’ it has experienced unparalleled growth in the last seven years. It has become the fastest-growing economy in the region, surpassing China with a gross domestic product of 6.9 percent. The International Monetary Fund has predicted this growth to continue,” FlySpaces CEO Mario Berta said in a recent interview.
At present, Berta said, he is also optimistic on the growth of the coworking space in the country as many Filipinos, especially the millennials, are shifting to flexible working conditions mainly because of the burgeoning traffic situation in Metro Manila.
He added the emergence of several small and medium enterprises (SMEs) and the continuous influx of multinational corporations are the growth drivers for FlySpaces. “The current spacer is not enough for the big number of clients that want to setup offices in the country,” he said.
At present, FlySpaces has 3,000 coworking space facilities in Southeast Asia. It has a total of 600 sites in the Philippines present in Manila, Cebu and Davao. FlySpaces’s online platform build a link among entrepreneurs, SMEs and corporations searching for short-term rentals with property owners interested in renting their idle office and event space. Coworking, short-term conference, meeting and virtual office space can all be booked through the company’s web site or mobile app in hourly, daily and monthly arrangements. FlySpaces is present in five countries and operating in seven key cities.
Berta said the high occupancy rates and the high demand from multinational companies had made FlySpaces bullish in its Philippine operations. “Aside from these reasons, the Philippines is the growing market in the Asean region.’
Although it has been a laggard in the economic race in the Asian region in the past, Berta said, the Philippines has managed to get out of the doldrums and has been recognized as one of the stellar performers in terms of economic growth.
With an average age of 23.4 and an annual population growth of 23.4, Berta said the Philippines has the potential to be among the top 10 biggest economies in the next decade. “Consequently, there are opportunities everywhere—food and beverage, transportation, real estate, tourism, services, consumer goods and so on,” Berta said.
Berta added there are also huge opportunities for start-ups, as the government announced it plans to create 500 start-ups, with a total funding of $200 million by 2020. Although there are several challenges facing the start-up development program, Berta said he remains optimistic, as the government has shown a warm response to the development of start-ups.
Nevertheless, Berta added the Philippines is starting to see the emergence of start-ups as young Filipinos, particularly the millennials, have been enthusiastic in setting up businesses and due to the low market saturation, each of the companies have established their own niche in the market to fill.
“For instance, Zipmatch is an online real-estate matching platform that aims to make it easier for people to find their dream homes. First Circle, another tech start-up, provides short-term working capital for SMEs. Meanwhile, Acudeen Technologies Inc. is a P2P marketplace that offers discounted receivables to SMEs to ease cash-flow problems.
“The other opportunity is that even though many Filipinos are already shopping online and are familiar with e-commerce, they are currently only engaging with foreign companies due to lack of local options. So, there is an opening for local companies to fill the gap,” Berta explained.
Citing a study by Google and Temasek, on the status of ecommerce in Southeast Asia, Berta said the Philippines will experience a 10-year compound annual growth rate of 34 percent.
With current Internet users estimated at 60 percent of the population, combined with the growth of the economy and the relatively low market situation, Berta added it is the perfect time to enter the e-commerce business.