US firms to expand Phl operations

MANILA, Philippines – Most US companies in the Philippines are planning to expand their business citing the availability of trained personnel, increasing market share and diversification of customer base even as corruption remains a concern, according to a survey of the US Chamber of Commerce and the American Chambers of Commerce in ASEAN.

The ASEAN Business Outlook Survey 2012 Philippines report showed that of the 238 US firms in the Philippines covered, 58 percent were planning to expand their business, while 25 percent were looking to expand significantly.

Some 18 percent said they expect their business to remain the same while none of the firms said they expect their business to contract.

The top three reasons cited by the firms for their planned business expansion in the Philippines were availability of trained personnel or efficient manpower (40 percent), increasing market share (35 percent) and diversification of customer base (10 percent).

While most US firms covered by the survey were looking to expand their business in the Philippines, the report noted that corruption remain a major concern that could affect business, with 73 percent expressing dissatisfaction with it compared to 79 percent last year.

“Corruption was by far the greatest drawback for the Philippines leaving three quarters of the respondents dissatisfied, of which roughly half were extremely dissatisfied,” the report noted.

Concerns were also raised over the country’s laws and regulations, ease of moving products through customs, and quality of infrastructure.

The report said the respondents experience a high level of satisfaction in the areas of labor cost, availability of trained personnel and sentiments towards the United States.

Housing and office costs, though rising, were also a source of satisfaction for firms.

The report also cited that while employees do not tend to request work in the Philippines, that percentage is rising and expatriate employee satisfaction in the country is at a record high this year.

Some 40 percent said they receive requests from employees in other locations to work in the Philippines compared to just 21 percent last year.

The report also showed that 100 percent of expatriate employees are generally satisfied with their assignments in the Philippines, up from 93 percent last year.

“This may partially be attributed to the fact that space constraints in international schools for expatriate workers have become less of an issue in recent years,” it said.

Across the ASEAN, the survey showed that 90 percent of 356 senior-level executives of US companies expect their trade and investment in the region to rise over the next five years.

Some 21 percent of US firms are also planning to diversify some investments from China into ASEAN with Malaysia and Philippines as the most preferred destination for expansion.