A lesser proportion of German businesses in the Philippines see the economy and their businesses in a better position compared to their sentiments in the early part of the year, a survey conducted by the German—Philippine Chamber of Commerce and Industry (GPCCI-AHK Philippinen) in October 2023.
The Fall 2023 AHK World Business Outlook Survey showed except for employment, the numbers were lower this year.
The survey also identified prices of energy, the lack of skilled workers, demand, economic policy conditions, and exchange rates as risks to their businesses’ economic development.
The Fall 2023 survey reports that half (50 percent) of the German-Philippine businesses are still optimistic in their business situation following the Spring 2023 forecast, lower than the 62 percent proportion in the Spring edition.
The same trend is reported on company expectations, which still showed positive results, with the majority (68 percent) of the responding firms forecasting confidence in business development for the next 12 months. But that is lower than the 74 percent proportion in the previous survey.
For local economic projections in this survey, only 38 percent compared to 54 percent in early 2023 of the participating companies anticipated favorable advancements in the local economy. Approximately 46 percent see stagnant growth.
The same sentiments are reflected on investments also followed this trend as there are now fewer respondents (39 percent) who plan to expand their investments over the next 12 months (from 46 percent in early 2023).
Meanwhile, a majority (54 percent) of respondents have affirmed their intention to hire more Filipino workers, slightly higher than the 50 percent in the early part of the year.
However, one of the major highlights for the Fall 2023 Survey is the concern for skilled workers and demand. About 37 percent of respondents said lack of skilled workers and demand are a top risk, which ties into the employment demand of respondents.
The results showed that the top three areas of current and potential investment include sales and marketing (45 percent), services (e.g., shared service centers) (39 percent), and research and development (27 percent).
Prices of energy (38 percent) consistently remain the topmost concern for participating companies.
The Fall 2023 survey reports pertaining to the European Union-Philippine free trade agreement showed most companies placing the impact of this agreement as crucial to their operations in the Philippines – from expansion and maintenance of their business’ current investments (40 percent), gaining a competitive market advantage (33 percent), and exploring new investment prospects (32 percent). Opportunities in trade in goods (58 percent), trade in services (51 percent), and supply chain optimization (36 percent) were also highlighted.
