GPCCI poll shows positive business outlook for PHL in next 12 months

APOSITIVE business outlook is foreseen by the majority of the German business community in the Philippines, as shown by the results of the survey conducted by the German-philippine Chamber of Commerce and Industry (GPCCI).

This, despite the fact that 51 percent of those surveyed expect local economic development to remain “stagnant for the next 12 months.”

Moreover, more than half or 55 percent of the respondents are expecting a better business outlook in the next 12 months, while 41 percent of the respondents are expecting local economic improvements given the same timeframe.

On investment outlook, the survey also depicted that it has a positive outlook with 44 percent of the respondents anticipating investment developments in the next 12 months, which is a notable increase from 13 percent two years ago.

In terms of employment, 48 percent of the respondents will retain the same number of employees in their work force. However, it’s worth noting that 46 percent of the respondents are considering increasing their employment in the next 12 months, which is considerably higher than the past four surveys conducted.

The AHK World Business Outlook (AHK WBO) Survey initiated by GPCCI was participated by 87 companies related to the German-philippine relations. Thirty-one percent are from the manufacturing industry and construction, 18 percent come from trade, and 50 percent from services.

In terms of size, 52 percent of the respondents have less than 100 employees, 21 percent have 100 to 1000 employees and 25 percent have more than 1000 employees.

The AHK WBO is based on a regular DIHK survey among member companies of the German Chambers of Commerce abroad, delegations, and representative offices. It covers the feedback from more than 4,200 German companies, branches, and subsidiaries worldwide.

In relation to the biggest risk for a company’s economic development, survey results show that figures have changed from previous surveys. In Spring 2022 (March to June), the price of energy at 49 percent is reported to be the biggest risk for companies, noting the increasing prices worldwide. Meanwhile, the second biggest risk at 45 percent is the price of raw materials followed by 41 percent on concerns regarding the exchange rates.

Meanwhile, on the long and short-term consequences of the Russian invasion of Ukraine, most of the respondents at 78 percent see higher costs of energy, raw materials, and intermediate goods as the short-term consequences of the ongoing conflict. Moreover, disruptions of logistics and supply chain are also seen by 61 percent of respondent-companies as the second short-term consequence.

Results show that the said crisis further changed companies’ longterm strategies in the international division of labor, with 42 percent of respondents seeing that legislations and trade barriers will increase political influence on supply chains. 41 percent also expect changes in the risk assessment of locations.

“Most businesses are reeling from the impact of the Russian-ukraine war since many European countries are heavily dependent on Russian energy imports, the sanctions that have been imposed because of the outcomes of the war have resulted in significant energy price increases and supply chain disruptions globally,” said GPCCI President Stefan Schmitz.

Schmitz said that they are looking forward to working with the incoming administration to address these issues and to partner in fostering economic growth in the Philippines.

German businesses see the quality of education, and availability of qualified workers as location factors for business activity and trade and investment. In relation to this, the survey featured a question regarding the location factors for their respective business activity.

Results show that 57 percent voted for quality of education in technical fields while 55 percent are for transportation and logistics, with these as the top 2 factors.

Meanwhile, the level of corruption, legal predictability and certainty, and political stability were tied at 54 percent.

On the location factors for trade and investment, 68 percent of the participants see the positive impact of the availability of qualified workers in the technical field, while 61 percent see the quality of education in the technical field as a major factor for trade and investment.

Transportation and logistics are considered by 59 percent of the respondents to be trade and investment location factors.