German business sentiment toward PH wanes
MANILA -Optimism among German companies which have operations in the Philippines declined in the last six months according to the results of a survey by the German-Philippine Chamber of Commerce and Industry (GPCCI), with fewer of these foreign firms expressing confidence that their situation will get better in the next 12 months.
Results of the Fall 2023 AHK World Business Outlook Survey that were released on Thursday showed that 50 percent of these firms are still optimistic of their business situation, marking a decline of more than 10 percentage points compared to the 62 percent recorded in the poll conducted in April.
The latest survey conducted last month among 100 German firms operating in the country also showed that 68 percent expressed confidence in business development for the next 12 months, down from the 74 percent of the previous poll.
Despite these downturns, the GPCCI said the results still showed that these firms have expressed satisfactory local business prospects amid a number of challenges, mentioning rising energy costs, the lack of skilled workers, demand, economic policy conditions, and volatile exchange rates.
“Our recent survey shows an adequate satisfaction of German businesses in the Philippines, matched with careful considerations and notable challenges. 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.” GPCCI president Stefan Schmitz said in a statement.
Amid decline in optimism, 46 percent of these German businesses still said they plan to invest more in the Philippines in the next 12 months, while 50 percent cited that they will hire more people locally.
The top three areas of current and potential investments cited in the survey are sales and marketing, services, and research and development.
The factors that companies said they are considering when making investment decisions include market size and market development, local economic policy framework, and diversification.
Asked to identify what challenges they are seeing, 38 percent cited energy prices, while 37 percent noted a lack of skilled workers.
“We can see that while many of our respondents want to employ more, we see that the lack of skilled workers remains to be one of the identified top issues. We ask the government to look at strategies and policies that promote skills development in our country that can both benefit local and foreign employment opportunities for Filipinos,” said GPCCI.
Director and Policy and Advocacy chairperson Marian Norbert Majer. The companies polled in the survey also raised current export challenges, with 39 percent highlighting cumbersome customs procedures, 37 percent citing tariffs and quota issues, and 36 percent mentioning issues on technical trade barriers.