The Philippines
AHK World Business Outlook Survey Results Spring 2023
Summary – Spring 2023
Top 3 Risks
Overall, businesses engaged in German-Philippine economic relations express significant optimism regarding their local business prospects. However, they also identify certain risks, such as shortages of skilled labor, disruptions in supply chains, and economic policy uncertainties. Additionally, these companies anticipate an increase in geopolitical obstacles, such as inflation, trade barriers, and cybersecurity threats, over the next five years.
62%
Situation
74%
Expectations Economy Investment* Employment Better / Higher
35%
26% 0%
54% 46%
43% 38%
50% About Equal
3%
16% 10% 44%
Worse / Lower
3%
6%
44%
Lack of Skilled Workers
39%
Supply chain disruptions (e.g. logistics, missing intermediate goods)
35%
Economic Policy Conditions
Top 3 Geopolitical Challenges
47%
Inflation / Monetary Policy Environment
Increase of political influence on supply chains (e.g., through legislation, trade barriers) Cybersecurity
42%
37%
No Investment*
71%
61% 50%
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How do you assess the current situation of your company? 62%
Spring 2023
35%
3%
Better
About Equal Worse
53%
Fall 2022
47%
Spring 2022
Fall 2021
Spring 2021
41%
43%
32%
21%
6%
47%
50%
10%
20%
29%
62% of the
respondents are in a better business situation with a significantly improving trend. Spring 2023
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What business development does your company expect in the next twelve months? 74%
Spring 2023
26%
0%
Better
About Equal Worse
61%
Fall 2022
26%
13%
Spring 2022
55%
44%
1%
Fall 2021
57%
40%
3%
Spring 2021
29%
62%
9%
74% of participating
firms forecast optimism in business development for the next twelve months, with notable 0% in worse ratings
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How do you judge local economic development in the next twelve months? 54%
Spring 2023
43%
3%
Better
About Equal Worse
34%
Fall 2022
41%
Spring 2022
Fall 2021
Spring 2021
39%
51%
24%
15%
27%
8%
54%
45%
12%
40%
54%
of participating
companies forecast a better development on local economy in the next twelve months with a drastic decrease (-24%) in "worse" ratings from Fall 2022
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How do you think local investments of your company are likely to develop in the next twelve months? 46%
Spring 2023
38%
6% 10%
Higher About Equal Lower
35%
Fall 2022
44%
Spring 2022
Fall 2021
Spring 2021
44%
39%
26%
14%
15%
No Investment
14% 3%
43%
42%
6%
24%
29%
7%
15%
46%
of participating
companies are plan to invest higher in the country in the next 12 months
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How do think local employment of your company is likely to develop in the next twelve months? 50%
Spring 2023
44%
6%
Higher
About Equal Lower
Fall 2022
44%
50%
6%
Spring 2022
46%
48%
6%
34%
Fall 2021
Spring 2021
15%
51%
56%
15%
29%
50%
of survey
participants said that they will hire more in the next 12 months
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ASEAN Comparison: Overview
Vietnam
54%
Singapore
49%
Expectations
Indonesia
33% 74%
50%
8% 7% 20% 26% 0%
42%
68% 51%
8% 27%
35%
70% 47%
4%
53%
47%
Malaysia
Indonesia
43%
40%
Thailand Singapore
12%
43%
Philippines Vietnam
3%
52%
36%
Thailand Malaysia
35%
62%
14% 23%
40% Better / Higher
5% 7% 13%
About Equal
Investment*
Situation
Philippines
Employment
In comparison with countries in the ASEAN Region, the Philippines generally exhibited a better / higher results in almost all areas of the AHK World Business Outlook Spring 2023 Survey.
Economy
Philippines Vietnam
54% 21%
48%
Thailand Singapore
43% 30%
45% 24%
3%
50%
5%
55%
20%
Malaysia
33%
51%
16%
Indonesia
33%
53%
13%
Philippines
46%
Vietnam
37%
Thailand
43%
38% 42%
29%
Malaysia
29%
53%
Indonesia
33%
40%
Vietnam
43%
2%7% 12% 16% 9% 9% 7% 20%
50%
44%
40%
Thailand Singapore
12% 9%
48%
Singapore
Philippines
6%10%
48%
55%
12% 43%
31%
55%
2% 14%
Malaysia
51%
31%
Indonesia
47%
47%
Worse / Lower
6%
18% 7%
No investment* Spring 2023
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What are the biggest risks for your company’s economic development in the next twelve months? Fall 2021
Spring 2022
Fall 2022
Spring 2023
Demand
Financing Conditions
Lack of Skilled Workers
Exchange Rates
Prices of Energy
Prices of Raw Materials
Legal Certainty
56% 15% 23%
27% 24% 28%
26% 18% 12% 9% 15%
39%
40% 38% 35%
55% 51% 36% 28% 29% 22% 20%
32%
49% 45% 41%
34%
49% 50% 26%
17%
14%
28%
41% 43% 34%
40% 44% Labor Costs
20% 24% 29%
20% 15% 23% 22% 24%
33% 32% 30%
30% 28% 22%
44% 45%
55%
64%
Spring 2021
Economic Infrastructure Trade barriers Supply chain Policy regulation / disruptions Conditions preference to (e.g. logistics, local missing companies intermediate goods)
Top 3 Risks for Companies in Spring 2023: 1. Lack of Skilled Workers (44%) 2. Supply chain disruptions (e.g. logistics, missing intermediate goods) (39%) 3. Economic Policy Conditions (35%)
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What are the biggest geopolitical challenges from your company's perspective in the next five years? 0%
10%
20%
30%
40%
Fragmentation of the global economy/decoupling
32%
Supply chain diversification
33%
50%
35%
Climate change
25%
Transformation of the economy to sustainable energy/production
Raw material and energy supply security
34%
Digital transformation
35% 37%
Cybersecurity Increase of political influence on supply chains (e.g., through legislation, trade barriers)
42% 47%
Inflation/monetary policy environment
13%
Migration Other
5%
Top 3 Geopolitical Challenges for Companies in Spring 2023: 1. Inflation / Monetary Policy Environment (47%) 2. Increase of Political Influence on Supply Chains (42%) 3. Cybersecurity (37%) Spring 2023
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For those who answered “Supply Chain Diversification”: What challenges do you see in diversifying your supply chains and/or sales markets? 0% No challenges
10%
20%
30%
40%
7% 28%
Identifying suitable sales markets/procurement markets
44%
Finding suitable suppliers/business partners
24%
Quality control of suppliers Finding locations with suitable infrastructure for new branches/production sites
17% 25%
High business management costs
20%
High planning costs in the supply chain
19%
Financing
24%
Trade barriers Increased legal and regulatory issues (compliance with country or supply chain due diligence laws, etc.)
Other
50%
36% 3% Spring 2023
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For those who answered “Supply Chain Diversification”: What external support do you use or would you like to receive in diversifying your supply chain or entering new markets? 0%
10%
20%
30%
40%
7%
No external support
42%
Market analyses
Strategic consulting for the development of market entry and expansion strategies
27% 43%
Identification of business opportunities Business partner search
33%
Human resources consulting to assist in recruiting and hiring qualified employees
32%
Assistance in developing marketing strategies and positioning your brand
20%
Legal advice to ensure compliance with local laws and regulations
33%
Supply chain management support to optimize supply chain processes Public promotional activities Other
50%
22% 5% 2% Spring 2023
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Labor Costs
Lack of Skilled Workers
Prices of Energy
Prices of Raw Materials
Fragmentation of the global economy/decoupling
Supply chain diversification
Climate change
Transformation of the Raw material and Digital transformation economy to energy supply security sustainable energy/production
Cybersecurity
Increase of political influence on supply chains (e.g., through legislation, trade barriers)
39%
50%
Trade barriers Supply chain regulation / disruptions (e.g. preference to local logistics, missing companies intermediate goods)
46% 35% 7% 7% 6% 0%
22% 15%
33% 25% 25%
47% 7% 7% 6% 13% 15% 20%
27% 31% 33% 38% 25% 32%
38% 34% 25% 34%
24% 13%
33% 24% 15% 29% 15% 34%
34% 44%
51% 48% 45% 13%
13% 22% 24%
27% 0%
33% 24% 21% 14% 26% 30%
22%
47%
52%
62% 56% 46% 51%
Geopolitical Challenges
Inflation/monetary policy environment
24%
33% Infrastructure
13% 19% 20% 22% 23%
22% 15% 7% 7% 6% 0%
Economic Policy Conditions
29% 28%
47%
46%
33% 25% 25%
7% 7% 6% 13% 15% 20% Legal Certainty
35%
27% 31% 33% 38% 25% 32%
34%
25%
24%
34%
Exchange Rates
47%
Financing Conditions
Philippines
13% 19% 20% 22% 23%
Demand
Vietnam
47%
Thailand
13%
13%
15%
29%
33% 24%
22% 24% 13%
Singapore
44%
34%
51% 48% 45%
52% 27%
Malaysia
0%
33% 24% 21% 14% 26% 30%
22%
46% 51%
47%
62% 56%
Indonesia
15%
Risks
38% 34%
ASEAN Comparison: Risks and Geopolitical Challenges
Migration
Other
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Survey Information Employees Worldwide
Sector
11%
20% 38% 54%
19% 50%
8%
The survey was sent out to companies involved in the German-Philippine Business relations with a total of 112 responses collected For more details on the DIHK / AHK WBO and the comparison to the most recent WBO surveys in the Philippines, click the links below: • • •
Manufacturing / construction Trade Services Others
• Less than 100 employees 100 to 1000 employees More than 1000 employees
AHK WBO Survey Results (Spring 2023): https://bit.ly/3AVhjKC GPCCI WBO Survey Results (Spring 2022): https://bit.ly/3TuqbxC GPCCI WBO Survey Results (Fall 2022): https://bit.ly/410FKAW Other surveys / publications: https://bit.ly/3TyYfIL
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Imprint Publisher AHK Philippinen | German-Philippine Chamber of Commerce and Industry, Inc. 8F Doehle Haus Manila, 30-38 Sen. Gil Puyat Avenue | Barangay San Isidro | 1234 Makati City | Metro Manila | Philippines Tel +63 2 8519 8110 info@gpcci.org www.philippinen.ahk.de Photo / Graphic Credits Canva, Flaticon
For Inquiries, Please Contact: Mr. Yves Aguilos Head of Government Affairs and Data Protection Officer E: yves.aguilos@gpcci.org T: +63 (2) 8519 8110 loc. 825 M: +63 917 713 1516 F: +63 (2) 310 3656 GPCCI in Social Media Facebook: https://www.facebook.com/GPCCI.org/ LinkedIn: https://www.linkedin.com/company/gpcci Twitter: https://twitter.com/AHK_Philippinen YouTube: https://www.youtube.com/channel/UCqXbBFbpoELSZPoR2n3sCA
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