Majority of Swedish companies in the Philippines expect their sales to grow 10 percent annually in the next three years, according to a survey, tempered only by “cautious optimism” due to red tape and regulatory unpredictability.
This is according to a report from Business Sweden, a trade council jointly owned by both the Swedish government and the private sector.
The report surveyed 13 Swedish companies in the Philippines in the last quarter of 2018, asking for their views of the local market. There are around 30 active Swedish companies in the country.
The organization said nine firms or 70 percent of respondents forecast solid performance.
“However, we are seeing cautious optimism. For one, respondents cited bureaucracy and regulatory changes as potential sources of risks,” the report, which is available online, read.
“Doing business in the Philippines is not easy, but if done right, it makes a lot of business sense, both from a bottom line perspective as well as a way of increasing your presence in the region,” the report said.
Sixty-nine percent of respondents said dealing with government permits was the top challenge, followed by infrastructure constraints cited by 54 percent.
Sector-specific policies and high operational expenditures concerned 31 percent, while enforcing contracts challenged 23 percent.
Four respondent companies, the report said, expected economic conditions in the country to either stay the same “or even decline.”
Nevertheless, majority still expected economic improvements, citing “average” confidence in the infrastructure push of the Duterte administration.
In line with this, majority also said they wanted to stay invested in the country, “and even plan to expand operations in the country in the long term.”