WITH the majority only seeing economic recovery beginning next year, German firms doing business in the Philippines identified demand, economic policy framework and financing as major risks for their operations in the next twelve months.
A recent survey by the German-Philippine Chamber of Commerce and Industry (GPCCI) revealed that 64 percent of the German-Philippine businesses tagged the demand, or lack thereof, as their primary concern in pandemic. This has been their worry even in the past two surveys conducted by the chamber.
“The risks and concerns are still the same as when the pandemic started: travel restrictions worldwide, lesser demand, uncertainty regarding the policy framework and finance issues,” GPCCI Executive Director Martin Henkelmann said in a news statement issued on Wednesday.
More than half or 55 percent are concerned with the country’s economic policy framework, while 44 percent of the German firms have worries over financing.
Other risks flagged by the companies include labor costs, skills shortage, energy prices, infrastructure, trade barriers, exchange rate and legal certainty.
About 91 percent of the German firms are anticipating Philippine economic recovery by 2022 and beyond, the survey concluded.
No company expects the economy to bounce back in the first half while only 9 percent are optimistic for potential recovery by the second half, which is a 22-percent decline from the previous survey.
“Companies feel the negative economic effects of the Covid-19 surge in Q1 2021, and they are unsure about the economic development,” GPCCI President Stefan Schmitz said. “Only one out of 10 companies expects economic recovery this year. Six months ago, the number was three times higher.”
Half of the respondents said their current company situation is “satisfactory,” which is an improvement from 45 percent previously. The percentage of German companies under a “bad” situation was reduced to 29 percent from 36 percent.
Majority or 62 percent of the German firms are expecting status quo in terms of business developments in the next twelve months. Some 29 percent are seeing positive developments, while 9 percent said worse situation is anticipated.
In the next year, 42 percent of the German firms will have “little to no changes” in terms of investments while 14 percent expect more.
For employment, only 15 percent said they are expecting growth while 85 percent will not increase and even reduce their workforce.
GPCCI conducted the survey from March 18 to April 9 with a total of 66 respondents. Majority or 51 percent came from the services industry; 29 percent, trade; and 20 percent, manufacturing industry and construction.
Image credits: Nonie Reyes