European businesses in the Philippines are delaying or cancelling investment decisions due to the impact of the new coronavirus disease 2019 (COVID-19) and the corresponding lockdowns.
A study by the European Chamber of Commerce of the Philippines (ECCP) also showed European businesses lament the pace of government response to the pandemic and are calling for swift policy reforms.
A survey conducted on more than 200 predominantly European companies operating in the Philippines showed an overwhelming majority or 91.8 percent of respondents said they are significantly affected by COVID-19 and the quarantines.
This led 71.5 percent of the respondents to delay or cancel altogether their investment decisions and only 28.5 percent indicated minimal changes in their investment plans.
While 86.9 percent of the respondents are aware of the government’s assistance programs for businesses, 75 or around three-fourths said they are unsatisfied with the available support measures.
Respondents elaborated in interviews that lack of communication on state relief programs as well as inconsistencies in the implementation of policies between the national and local governments on restriction orders are affecting their operations.
“It is undeniable that there is a general sense of anxiety among the European business community when you look at the data as the environment grows even more uncertain,” said ECCP president Nabil Francis. “The COVID-19 pandemic is taking its toll on the health not only of the population but also of the economy.”
Francis said European companies are urging the government to further improve ease of doing business by simplifying processes for government transactions, and support granting business tax breaks during the health emergency.
Francis also stressed the need to implement stimulus measures to accelerate economic recovery such as enacting a competitive corporate taxation regime and expediting infrastructure development to generate employment and make the Philippines an attractive destination for more European trade and investments.
“Putting in place these measures will provide guidance and clarity to business leaders who are dealing with a new kind of risk. The European business community stands ready to work with the government in this regard,” said Francis.
The respondents listed travel restrictions, weaker demand, and increased costs for health and safety compliance are among their top business concerns. They also cited logistical constraints, order delays, and sourcing input difficulties, among others, in their regional supply chains have caused disruptions to their business engagements with the European Union. — Irma Isip