MANILA: German companies operating in the Philippines have turned less optimistic about their prospects in the country, citing frequent policy changes and high energy prices being among the risk factors affecting their bottom line.
According to the Spring 2024 AHK World Business Outlook Survey conducted by the German-Philippine Chamber of Commerce and Industry (GPCCI), the number of German companies here that are optimistic about their current business situation dropped to 50% in the May 2024 survey from 62% in May 2023.
But the number was unchanged compared with the business group’s November 2023 fall survey.
The latest spring survey that polled 70 companies also showed that those who have better expectations about the next 12 months declined to 61% from 74% in the May 2023 survey and 68% in the November 2023 survey.
The latest survey pointed to economic policy as the top concern related to risks, citing complex regulations, frequent policy changes, and extensive bureaucracy that is creating an unpredictable environment.
The respondents also cited high energy prices as a significant concern, adding that these are impacting profit margins and operational costs, particularly in the manufacturing sector.
Additional challenges cited include supply chain disruptions and infrastructure as contributors to operational inefficiencies.
“It’s imperative that the Philippine government works closely with businesses to resolve these identified challenges,” said Marian Norbert Majer, GPCCI board director and policy and advocacy chairperson.
“Addressing these issues can help create a more predictable and favourable business environment and ensure that this bullish momentum translates into substantial outcomes that will help the Philippines attain its sustained economic growth,” she added.
Meanwhile, those that have higher or better economic projections in the next 12 months improved to 55% from the May 2023 survey and 38% in the November 2023 survey.
As for those who have better expectations on investments, the percentage eased to 44% from the 46% survey in May 2023, but was an improvement from the 39% in November of the same year.
On employment, 61% see the situation improving, up from 50% in the earlier survey in 2023 and 54% in the latter part of the year.
The GPCCI said it was “encouraging to see such confidence”, seeing the reported percentages as a forecast of a bullish economy.
“This optimism surely points to a thriving environment in the Philippines for both investment and job creation over the next 12 months,” GPCCI President Marie Antoniette Mariano said in a statement. — Philippine Daily Inquirer/ANN