More than half or 54 percent of businesses under the auspices of the German-Philippine economic relations expect an expansion in their workforce this year, results of the AHK World Business Outlook fall edition showed.
The German Chamber of Commerce of the Philippines Inc. (GCCPI) in a statement yesterday said it was the highest business sentiment compared with the global average of 36 percent.
The AHK World Business Outlook is based on a regular DIHK survey of member companies of the German chambers of commerce abroad, delegations and representative offices.
The survey also showed 44 percent of respondents in the Philippines acknowledged that they have plans to increase investments in the next 12 months.
The overall satisfaction of German businesses in the Philippines in terms of the current business climate was notable, with 55 percent of businesses expressing positive sentiment, the chamber said.
That was well above the global average of 48 percent, it added.
Those numbers are a reflection of confidence in the country’s business environment, but such optimism is tempered by the lag in the country’s performance when it comes to global competitiveness rankings, according to the GCCPI.
“While this optimism is encouraging, we must remain vigilant in addressing the structural challenges that could hinder sustained progress,” said chamber president Marie Antoniette Mariano.
The survey showed only 48 percent of businesses reported an improvement in competitiveness during the past five years, trailing regions like the Middle East and North Africa (57 percent), Africa (52 percent), North America (52 percent), and South America (49 percent).
It will be recalled that the Philippines placed 52nd out of 67 economies in the 2024 World Competitiveness Report conducted by the International Institute of Management Development (IMD). The Philippine ranking was unchanged from 2023.
The IMD competitiveness report is a yearly ranking of the world’s economies based on their competitiveness.
Among the challenges cited by respondents to are rising energy costs, inadequate infrastructure, and ongoing supply chain disruptions, the GCCPI said.
Globally, infrastructure bottlenecks were cited as a more prominent issue for businesses in the Philippines than for those in other regions.
Among the German companies operating abroad, about 27 percent cited infrastructure as quite risky for businesses in the Philippines, which ranked second only to Kazhasktan, where 43 percent of the respondents cited infrastructure as a risk factor.
Thirty-five percent of the respondents also cited energy prices as a risk factor while 31 percent pointed at commodity prices.
“Despite the optimistic outlook, businesses in the Philippines face pressing risks such as high energy costs, infrastructure gaps, and supply chain disruptions,” said Dr. Marian Majer, the chamber’s board director and concurrent Policy and Advocacy chairperson.
“It is crucial to prioritize policies that enhance energy efficiency, modernize infrastructure, and build resilient supply chains to ensure long-term competitiveness and sustainable growth,” he said.
The AHK World Business Outlook fall edition 2024 edition surveyed nearly 3,500 German companies, branches and subsidiaries
worldwide as well as companies with close ties to Germany. The survey was conducted from September 23 to October 16, 2024. The profile of Philippine respondents was not disclosed.
