Foreign businessmen are cautious over the country’s quick economic recovery with the omicron variant of the new coronavirus disease 2019 sending uncertainty globally.
For Lars Wittig, president of the European Chamber of Commerce of the Philippines (ECCP) , part of that recovery rests in the hands of the next administration.
“Hopefully by mid -2022, the time to fully repair the scarring of the economy begins. This will become the focus and responsibility of the next administration,” Wittig told the 10th Arangkada Forum yesterday.
Wittig also said the country should not “get too excited” as the economy strengthens this quarter and the next.
“That’s because of low base effects and also (because of the reopening (of the economy) … for example the resumption of construction, retail and domestic tourism,” he said.
Wittig said initially, the growth will just bring the economy back to where it was in first quarter of 2020.
For him, this just means “recovery of the lost GDP” before the country sees the start of the “healing of the many major scars, closed businesses, the unemployed, increased poverty, less educated students, reduced investment, greater national debt and more.”
“Should we see effective national leadership, good economic management, continuity of sound policies from one administration to the next, we expect recovery and growth will come. But recovery is just the old normal. We think there must be a better normal to attract substantial foreign investment and trade to really boost the economy,” Wittig said.
While he acknowledged the Philippines has amazing potentials, Wittig said the country “for a long time has fallen short of realizing them.”
Keiichi Matsunaga, president of the Japanese Chamber of Commerce of the Philippines Inc., in the same forum said while foreign businessmen are hopeful that 2022 will be a year of economic recovery, followed by a resumption of the high growth momentum and declining poverty “we continue to have concerns” especially with the new omicron variant and with a large percentage of population still unvaccinated.
“We hope government will accelerate vaccinations and booster shots as quickly as possible while scientists are hunting evidence to better understand this new variant,” Matsunaga said.
He added the country must “keep in mind all lessons learned from this pandemic.”
“As we are forced to quickly adapt and conquer challenges, much work needs to be done to improve public education and health, adapt flexible work, speed up the digital economy, prepare for climate change, lift restrictions on foreign investment, (implement) more Build, Build, Build projects and address other challenges,” Matsunada said.
Matsunaga also expressed hope the next administration can implement more programs and policies that will address poverty and realize the great potentials of the Philippines.
According to Wittig, JFC will publish a summary of formal recommendations to be shared with the new administration where it hopes to assist the government in encouraging new inbound investment based on the new CREATE (Corporate Recovery and Tax Incentives for Enterprises) Act and the Retail Trade Liberalization bill.
Meanwhile, the German Chamber of Commerce of the Philippines Inc. yesterday released the results of the AHK World Business Outlook Fall 2021 Survey indicating its members’ optimistic outlook on the gradual recovery of the Philippine economy as the COVID-19 situation improves.
German-Philippine businesses, however, are still encountering problems from growing travel restrictions and supply chain concerns.
Done between September and October 2021 before the omicron variant was discovered, the survey indicated much improved sentiment from the Spring 2021 and Fall 2020 surveys.
For example, 26 percent of companies are looking at an increase in their local investments (from 14 percent in Spring 2021). However, the majority still say that it will remain the same.
As for employment projections, 34 percent expect a higher likelihood of development in local employment over the next 12 months which numbers are more than twice in Spring 2021 (15 percent), and companies who intend to reduce their workforce also continues to decline at 15 percent from more than a quarter of participants in both Spring 2021 (29 percent) and Fall 2020 (35 percent).
In assessing the top three risks of the respondents, lack of demand (55 percent) remains to be at the top risk in Fall 2021, followed by the country’s risks in the economic policy framework (51 percent) and risk associated with rising prices of raw materials at 49 percent.
When asked about the negative effects brought up by the pandemic, 85 percent of respondents said travel restrictions pose as their greatest concern and has been consistently expressed by 4 out of 5 of the participating firms from the past surveys. Irma Isip
