A MAJORITY of German businesses active in the Philippines said they expect trading conditions to improve over the next 12 months, the German-Philippine Chamber of Commerce and Industry (GPCCI) said.
“Our recent survey shows adequate satisfaction among German businesses in the Philippines” accompanied by caution and awareness of “notable challenges,” GPCCI President Stefan Schmitz said in a statement.
“We have observed these developments this year in our events, partnerships, and dialogues with both public and private stakeholders and we are happy that more German companies would like to contribute to job creation,” he added.
In the Fall 2023 AHK World Business Outlook Survey, 68% of the 100 companies expressed optimism in Philippine business conditions over the next year, an increase from the 61% expressing optimism a year earlier.
However, the reading was lower than the 74% of companies expressing optimism in the survey’s Spring edition.
The survey also found that only 50% of the participating firms said that they are in a better position, lower than the 62% reading in the Spring edition and the 53% posted a year earlier.
GPCCI said only 39% of respondents plan to increase their investments in the Philippines over the next 12 months.
Meanwhile, 41% are planning to maintain current invest levels, 16% are planning to invest less, and 4% have no plans of investing.
Asked about which operations they plan to invest in, 45% said they will invest in sales and marketing, 39% in services, and 27% in research and development.
Around 54% of survey participants said that they will hire more workers in the next 12 months, with 6% saying they will hire less.
Respondents named the top sources of risk to be energy prices, demand, lack of skilled workers, exchange rates, and economic policy.
“We can see that while many of our respondents want to employ more, we see that the lack of skilled workers remains one of the top issues,” GPCCI Director and Policy and Advocacy Chairperson Marian Norbert Majer said.
“We ask the government to look at strategies and policies that promote skills development that can (boost) local and foreign employment opportunities,” he added.
Meanwhile, 46% of respondents said the EU-Philippine Free Trade Agreement will be crucial to the success of their operations.
“We are pleased to see that our respondents are motivated by the possibility of the Philippines entering into a Free Trade Agreement with the European Union,” GPCCI Executive Director Christopher Zimmer said.
“The first part of the dialogue is currently in motion, and we hope to hear the good news about the scoping procedure and that negotiations will commence in 2024,” he added. — Justine Irish D. Tabile