Economic policy, volatile forex top concerns of German firms

Economic policy and the volatile exchange rate have emerged as the top business concerns among German investors in the Philippines, who remain generally bullish on their business outlook for the country.

Results of the Spring 2018 Survey of the Network of German Chambers of Commerce Abroad (AHK) released yesterday showed that economic policy has been cited as the top business challenge in the country at 48 percent, closely followed by the volatile exchange rate at 47 percent.

“So these issues have to be addressed first and foremost,” said Peter Kompalla, executive director of the German Philippine Chamber of Commerce and Industry (GPCCI).

Other major challenges identified in the country are the lack of skilled workers (37 percent), infrastructure (35 percent), as well as legal certainty and energy/ commodity prices (28 percent each). Despite these concerns, however, German investors expressed a generally positive business outlook for the next 12 months, with 71 percent expecting it to be better, while only two percent see it worsening.

While being slightly more skeptical concerning the mid-term economic outlook in the country, with 58 percent answering “better,” the majority of German businesses in the Philippines still intends to invest and create more jobs, the report showed.

The survey revealed that about 55 percent of the German companies in the country are keen to expand, while 52 percent intend to hire more.

“The main message we got from almost two-thirds of our participating members here is that their current business situation is good. For us, still no reason to slow down our efforts creating the best possible business environment here in this country,” Kompalla said.

“But here we see potential to be worked on. GPCCI will contribute with all its resources to raise the full potential, to create a reliable business environment for our companies to thrive and translate growth into jobs. That has to be the focus of all our work as there are also challenges, of course,” he added.

The AHK World Business Outlook is based on a regular survey among member companies of the German chambers of commerce abroad, delegations and representative offices.

For the Philippines, 130 member companies participated out of about 283 members of GPCCI, in the survey conducted from March to April this year.

In the survey results for the Philippines, 61.5 percent of the respondents came from the retail trade, 22.3 percent from industry and construction, and 16.2 percent from the service sector.

Small companies with less than 100 employees accounted for 41.1 percent of responses, while large companies with more than 1,000 employees made up 29.5 percent of the respondents.