Majority of German firms here in the Philippines are anticipating their incomes to plunge as an effect of the lockdown, and they are seeking the government’s help in reducing administrative burdens to recover their losses.
In a survey, 86 percent of German investors said they are expecting sales to decline this year due to the coronavirus pandemic and the consequential quarantine. Among those projecting a sales decrease, most are staring at double-digit losses of up to above 50 percent.
Travel restrictions in effect remain to be the most concerning issue for business, while over half of German firms reported issues relating to postponement of investments, cancellation of trade fairs and disruption in the supply chain and logistics.
“While postponed investments [55 percent] and problems in supply chain and logistics [54 percent] remain high like in the April WBO [World Business Outlook], the importance of concerns regarding the cancellation of scheduled trade fairs/events rose from 47 percent to 54 percent. This shows the interest of the economic stakeholders to meet clients and exchange about the trends in these disruptive times,” the survey read.
In terms of state measures, German firms said they will most appreciate if the government reduces administrative burdens, particularly on customs, permits and licenses.
Second priority for them is the passage of stimulus packages that would result in the provision of fiscal incentives to investors and of support for consumption. More than half of the respondents said the legislation of corporate tax rate reduction proposed under the Corporate Recovery and Tax Incentives for Enterprises Act would be most appreciated at this time.
Likewise, 47 percent of German firms said they would need financial liquidity measures, such as access to financing and loans, in the lockdown aftermath, while about 42 percent said they would require provision of essential health needs, particularly test kits.
For Tristan Arwen G. Loveres, president of the German-Philippine Chamber of Commerce and Industry, the poll only illustrated how far reaching the impact of the pandemic is to the business operations of investors. As such, he argued it is critical for the government to concentrate on passing the stimulus packages to alleviate the economic impact of the health crisis.
“We encourage all stakeholders to get the proposed economic stimulus packages quickly approved to mitigate the negative impacts on the economy,” said Loveres.
The survey was conducted between June 5 and June 12. It gathered the insights of 87 German investors here in the Philippines.