German firms seek government support amid COVID

MANILA, Philippines — German companies operating in the Philippines have urged government to cut red tape, pass economic stimulus packages and reduce the corporate income tax (CIT) rate as relief measures as the coronavirus disease 2019 or COVID-19 crisis has taken a high toll on their operations.

A survey conducted by the German-Philippine Chamber of Commerce and Industry (GPCCI) from June 5 to June 12, covering 87 companies involved in German-Philippine business relations, showed 71 percent consider reduction of administrative burdens as the most important form of support government could provide amid the pandemic.

This was followed by the passage of economic stimulus packages (59 percent) and CIT reductions (53 percent).

The survey showed the number of companies expecting a decline in sales by more than 50 percent as a result of the COVID-19 outbreak doubled to 26 percent from 13 percent when the survey was first conducted in March to April.

Businesses anticipating a decline between 25 percent and 50 percent in sales grew to 30 percent from 24 percent.

Meanwhile, businesses anticipating no change in sales are down to two percent from 18 percent the previous survey.

When asked for negative effects of the COVID-19 pandemic, 84 percent cited travel restrictions.

Similar to the previous survey, businesses remained concerned about postponed investments (55 percent) and problems in the supply chain and logistics (54 percent).

The survey also showed 43 percent of businesses expect supply chains to be back to the way it was prior to the health crisis by December this year, while 26 percent were more optimistic to say it would be in place by September.

Meanwhile, 30 percent said they expect supply chains to be reestablished by June next year.

In terms of how the easing of community quarantine restrictions would affect operations, 47 percent it would help moderately, 39 percent said it would help a lot, and six percent said it would negatively affect their business.

GPCCI president Tristan Arwen Loveres said the survey shows the enormous effect of COVID-19 on companies.

“We encourage all stakeholders to get the proposed economic stimulus packages quickly approved to mitigate the negative impacts on the economy,” he said.

Among the proposed stimulus measures are the Accelerated Recovery and Investments Stimulus for the Economy (ARISE) bill and COVID-19 Unemployment Reduction Economic Stimulus (CURES) bill.

ARISE aims to provide a P1.3 trillion stimulus package to be used for an enhanced Build Build Build program with projects on health care, education and food security, as well as for mass testing, wage subsidies, loans for micro, small and medium enterprises, and assistance to tourism, transportation, manufacturing, and agriculture and fishery sectors.

The proposed P1.5-trillion CURES, meanwhile, aims to set aside a special fund for infrastructure projects to create jobs.

“Companies quickly need huge support to tackle these trying times and to emerge more competitive on the international level afterwards,” GPCCI executive director Martin Henkelmann said.