Business outlook of German companies in the Philippines turned more positive but economic expectations are clouded by the impact of the Russia-Ukraine war.
The Spring 2022 survey conducted by the German Chamber of Commerce of the Philippines Inc. (GPCCI) said more than half (55 percent) of the respondents are expecting a better business outlook in the next 12 months.
However, 51 percent of the respondents expect the local economic development of the country will remain stagnant for the next 12 months while 41 percent expect improvements in the same period.
“The improving situation of the pandemic in the Philippines is evident with the low case reports and relaxed business restrictions, this is felt by the German business community in the country,” said Christopher Zimmer, GPCCI executive director. We also have observed an uptick in investment interest which shows the optimism of companies involved in German-Philippine business relations.
The survey showed 47 percent of the respondents are in a better business situation and 43 percent remain at a satisfactory situation.
There is, however, a significant decrease observed in companies that consider themselves in a bad situation since Spring 2020 (36 percent).
The survey also depicted a positive investment outlook as 44 percent of the respondents anticipate investment developments in the next 12 months, a notable increase from 13 percent two years ago.
This has a positive impact on employment as 48 percent of the respondents will retain the same number of employees in their workforce. About 46 percent are considering to increase their employment in the next 12 months, considerably higher than the previous four surveys.
The respondents have identified prices of energy as the biggest risk for companies (49 percent) followed by prices of raw materials (45 percent and concerns on exchange rates ( 41 percent).
An overwhelming 78 percent see higher costs for energy, raw materials, and intermediate goods as the short-term consequences of the Russian invasion of Ukraine while 61 percent tagged disruptions of logistics and supply chain as the second short-term consequence.
“Most businesses are reeling from the impact of the Russian-Ukraine war since many European countries are heavily dependent on Russian energy imports. The sanctions that have been imposed because of the outcomes of the war have resulted in significant energy price increases and supply chain disruptions globally,” said Stefan Schmitz, GPCCI president. Irma Isip
