BUSINESSES engaged in German-Philippine economic relations have expressed significant optimism regarding their local commercial prospects.
However, they also identify certain risks, such as shortages of skilled labor, disruptions in supply chains and economic policy uncertainties. Additionally, these companies anticipate an increase in geopolitical obstacles such as inflation, trade barriers and cyber security threats over the next five years.
These were the results from the Spring 2023 AHK World Business Outlook Survey conducted by the German-Philippine Chamber of Commerce and Industry (GPCCI-AHK Philippinen) in April 2023.
“Our recent survey shows a bullish business interest of German businesses in the Philippines,” said Executive Director Christopher Zimmer of GPCCI. “We are excited about more developments soon, as we promote the Philippines in our lined-up activities this year such as Trade Secretary Pascual’s Germany visit this July, future business delegations and our flagship event: Mabuhay Germany.”
Confident local business prospects
THE Spring 2023 survey reports that more than half (62 percent) of German-Philippine corporations are in a better business situation, with a significantly improving trend compared to Spring 2021 (21 percent). Expectations also showed positive results, with a vast majority (74 percent) of responding firms forecasting confidence in business development for the next 12 months, with notable 0 percent in worse ratings.
More than half (54 percent) of participating companies anticipate better development of the local economy in the next 12 months, with a drastic decrease (-24 percent) in “worse” ratings from Fall 2022 (from 27 percent to 3 percent). Investments and employment also show higher uptick: 46 percent said they plan to invest higher in the country in the next 12 months, and 50 percent said they will hire more people locally.
In addition, when compared to Asean and Asia-Pacific neighbors, the Philippines generally exhibited “better” or “higher” results in almost all areas of the survey.
“The positive outlook of companies engaged in German-Philippine economic relations is attributable to the recent activities of the Philippine government in the EU,” said GPCCI president Stefan Schmitz. “We urge the government to capitalize on this positive momentum, as it can generate renewed interest in the [local] market, given the country’s ongoing economic development.”
New risks, geopolitical challenges
THE Spring 2023 Survey included questions about major risks anticipated by respondents for their companies in the next 12 months. It found that 44 percent identified the lack of skilled workers as the most significant risk, followed by supply-chain disruptions at 39 percent, and economic policy conditions at 35 percent.
With regard to potential geopolitical challenges for their respective companies in the next five years, inflation/monetary policy environment (47 percent) was identified as the most pressing concern, followed by an increase in political influence on supply chains (42 percent), and cyber security issues (37 percent).
“We are pleased to announce that the Philippines has achieved exceptional results in the Spring 2023 survey, leading among its neighboring countries in the Asean region,” said GPCCI director and Policy and Advocacy chairperson Dr. Marian Norbert Majer. “This is a testament to the concerted efforts of the government, private sector, and the Filipino people to enhance the business environment.”
“However,” Majer cautioned, “we urge the government to take action on the challenges identified by participating companies—particularly in the area of human-capital development—given that it is the country’s most valuable resource.”
