Most German firms in Philippines bullish on business prospects

MANILA, Philippines — More than 70 percent of German firms operating in the country are bullish on business prospects this year, a survey of the German-Philippine Chamber of Commerce and Industry (GPCCI) showed.

GPCCI’s 2019 AHK World Business Outlook showed more than 70 percent of the participating firms see their current business situation in the country as better compared to the previous year.

In addition, the survey showed employment intentions also improved this year from last year.

When asked about business development, investment intentions and general economic development, however, the survey showed respective declines of eight percent, six percent and eight percent compared to the previous year.

The survey also showed German firms see economic policies as the biggest risk which may affect their businesses in the next 12 months.

Among the economic policy changes seen is the reduction in the corporate income tax (CIT) and rationalization of fiscal incentives through the second package of the government’s tax reform program, as well as the progression of the security of tenure bill.

German firms also see exchange rate volatility as another risk which can affect business operations this year, as well as challenges in securing skilled labor.

Amid concerns on pending economic policy changes, GPCCI president Tristan Arwen Loveres said there is a need for government to finalize the reforms.

“They need to create a business- and investor-friendly environment,” Loveres said.

As the government is looking to reduce the CIT and rationalize incentives given to investors through the Tax Reform For Attracting Better and Higher Quality Opportunities bill, GPCCI said it should take into account the concerns of the industry to create an attractive incentive and fiscal structure for both existing and incoming firms. It added that the government should proceed with the fast implementation of the Ease of Doing Business Act which aims to rid government of bureaucratic red tape by providing a required period of time for transactions with agencies to be completed.