Nine in 10 Filipino executives are optimistic of business conditions in the country for the next 12 months, boosting confidence among 7 in 10 to invest more.
But the 2019 edition of the Business Barometer: The Philippines CEO Survey carried out by Oxford Business Group (OBG) showed over half (54 percent) of respondents also described the Philippines’ tax environment as uncompetitive or very uncompetitive on a global scale, with just 17 percent giving a favorable response.
Respondents also had mixed reactions on the impact of the Tax Reform for Acceleration and Inclusion (TRAIN).
The survey covered 100 C-suite executives from various industries.
When asked their expectations of local business conditions for the coming 12 months, the vast majority (92 percent) of respondents described them as positive or very positive, with 74 percent also saying they expected their firm to make a significant capital investment in the year ahead.
However, more than one-third (35 percent) of those surveyed told OBG that TRAIN had affected local business conditions in a negative way, while 33 percent viewed its impact as neutral.
About 30 percent described the tax reform as having had a positive or very positive effect on local business conditions.
On a more positive note, the government’s flagship Build, Build, Build program was largely viewed by business leaders favourably, with 56 percent telling OBG that they believed the infrastructure drive was impacting the wider economy in a positive or very positive way, despite the limited scope for private investment in major infrastructure projects as a result of the government’s preference for official development assistance (ODA) and public funding.
Against this backdrop, 33 percent of respondents identified engineering as the skillset in greatest need among the domestic workforce, followed by leadership (25 percent), and research and development (18 percent).
Unsurprisingly, given last year’s high levels of inflation, a plurality (43 percent) of executives chose commodity price rises as the external factor that could most impact the Philippine economy in the short to medium term, well ahead of trade protectionism (27 percent), despite the global disruption caused by the US-China trade war.
Inflation averaged 5.2 percent for 2018, well outside the central bank’s target range of 2-4 percent, but the rate has eased in 2019.