MANILA, Philippines—The Asean region has become a more attractive destination for foreign investments and trade in the aftermath of the global economic crisis due to its potential as a market for goods and services, according to a survey commissioned by the 10-member body.
At the same time, however, the survey showed that the Philippines remained one of the least-preferred investment destinations for foreign businessmen in the region over the medium term due to perceived limitations of the local market in terms of growth potential.
According to the survey commissioned by the Asean Business Advisory Council (Asean-BAC), the Philippines ranked ninth in terms of investment preference—ahead only of Brunei—in the 10-nation survey, with Vietnam leading the pack as the most preferred destination for foreign investors over the next three years.
This was followed by Singapore, Thailand, Indonesia, Malaysia, Laos, Myanmar and Cambodia, in that order.
At least 85 percent of the survey’s respondents said their firms had plans of expanding in at least one Asean country over the next three years.
The survey was conducted recently by the Lee Kwan Yew School of Public Policy at the National University of Singapore and covered 355 business respondents from across the region, but predominantly from Singapore and Thailand.
About 67 percent of the respondents ranked the countries due to the growth potential of their local markets, followed by the presence there of their main clients or suppliers.
On the whole, however, prospects for the region looked rosy despite the competition offered by China as an investment destination.
According to the survey, about half of the respondents named the Asean as the most attractive location in the world for their firms’ offshore direct investments between 2010 and 2012, with China getting the nod of 29 percent of the surveyed firms.
The majority of small firms (defined as those employing less than 50 people) perceived one of the Asean countries to offer the best prospects for their offshore investments, while a higher share of large firms found China as the most attractive market for the sale of goods and services over the next three years.
“The survey results are substantiated by the individual assessments of Asean-BAC members from their engagement in various national and regional [fora],” Asean-BAC chairman and Indonesian representative Anangga Roosdiono said in a statement.
“The interim findings have helped [us] tremendously in our provision of feedback and policy recommendations to Asean leaders and economic ministers last year,” he added. “This final survey report will also be presented to the Asean official process for information.”
As such, the group has proposed that Asean members ensure full and timely implementation of their commitments in the so-called Asean Economic Community blueprint.