Now is an exciting time to do business in Philippines

MANILA, Philippines — As the Philippines continues to enjoy robust economic growth, various industries believe now is an exciting time to do business in the country with opportunities available for enterprises to thrive.

Francis Chua, co-chair of the Philippine Chamber of Commerce and Industry, said it is an exciting time to do business in the country due to positive developments in the economy.

“We see a lot of opportunities for the simple reason that we have a market that is growing,” he said.

Chua said the favorable economic conditions in the country are making it more attractive to foreign investors and tourists, and the entry of foreign firms and tourists are opening opportunities for local businesses.

Philippine Retailers Association chairman emeritus Samie Lim said the country’s strong economic growth, likewise, bodes well for the retail sector as it creates a bigger market for products.

He said the government’s push to develop Mindanao would be beneficial for retailers. “If we do develop Mindanao, which is the direction of the government, we will increase our market by 30 percent,” Chua said.

Chua said even small and medium enterprises (SMEs) would benefit from current conditions in the country as the government is actively promoting the development of the sector through various programs, ranging from financing to providing support to enable businesses to participate in trade shows and showcase their products abroad.

In addition to the positive economic backdrop, the country’s close ties with China also provide opportunities to expand trade.

“I just received an invitation from China for Filipino SMEs to be featured in an upcoming trade expo in Nanning,” Chua said.

Exporters agree the present economic conditions are favorable for their businesses.

Philippine Exporters Confederation Inc. president Sergio Ortiz-Luis Jr. said the country’s merchandise exports recorded a 9.5 percent growth to reach $62.87 billion last year, following a decline in 2016.

While the cumulative merchandise exports were down five percent to $26.92 billion in the first five months from $28.33 billion a year ago, Ortiz-Luis said a recovery may occur as opportunities may arise for exporters given the ongoing trade war between the US and China.

The US and China have commenced a trade war by imposing tariffs on imports.

“We might have some opportunities. There might be a spillover of orders to us,” Ortiz-Luis said.

He said exporters would also benefit from the move of the government to pass the Ease of Doing Business Act which prescribes a period for the processing of government transactions.

“With the passage of the Ease of Doing Business Law, this will improve process for licenses and reduce red tape,” he said.

Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) president Dan Lachica said the electronics industry is upbeat on steady growth.

“I would say that these are exciting times for the Philippine electronics industry,” Lachica said citing the industry posted the highest ever level of exports of $32.7 billion last year, while employing 3.2 million direct and indirect workers.

“With global technology advancements in IoT (internet of things), big data, cyber security, wearables, self-driving cars, smart cities and appliances, we expect the industry to grow by six percent in 2018,” he said.

As the Philippines remains an attractive location to set up shop for information technology (IT) – business process management (BPM) firms, the IT and Business Process Association of the Philippines (IBPAP) is optimistic the sector would continue to grow.

IBPAP president and chief executive officer Rey Untal said the IT-BPM industry is one of the most attractive industries in the country due to the financial stability and professional growth it offers to employees.

“Moreover, with our growing diversity of clients and services, working in the IT-BPM industry provides career opportunities in various fields – customer support, software development, game development, healthcare information management, financial management, and animation,” he said.

Under its roadmap, the IT-BPM industry is aiming to generate $40 billion worth of revenues and employ 1.8 million direct employees by 2022.

The IT-BPM sector reported revenues of $23 billion and created employment for 1.2 million Filipinos in 2016.

Meanwhile, Association of Vehicle and Importers Distributors Inc. president Ma. Fe Perez-Agudo said it is both a challenging and exciting time for the Philippine automotive industry at present.

“Our globalized economy marked by digital disruption is daunting even as it opens untold opportunities. People no longer buy products, but experiences that they associate with a product or brand. That said, the challenge is to redesign existing business models in order to be more agile and in-step with a more demanding, discriminating and vocal market. This entails harnessing the appropriate digital technology for operational efficiency and, more importantly, for the enhancement of the customer experience through the use of big data and analytics,” Agudo said.

While businesses have a positive outlook for the country, other groups said there is still room for improvement.

They said there should be collaboration between businesses and the government to create an environment to promote growth for the different sectors.

As SEIPI sees potential issues with the proposed second package of the Tax Reform for Acceleration and Inclusion (TRAIN), contractualization and federalism which may affect the industry, Lachica said the group has given its suggestions to the government.

The SEIPI expects operational costs to increase up to 40 percent due to TRAIN 2 which could reduce the corporate income tax rate and rationalize incentives given by the government.

On President Duterte’s call to Congress to pass a law to end contractualization, Lachica said the electronic industry’s demand is highly volatile and so, companies deploy project-based individuals hired through legitimate service providers which comply with all legally mandated requirements.

“I hope we are allowed to continue with the practice,” he said.

On federalism, he said it would be difficult for companies with factories in different regions which have different policies, costs and processes.

“That would be difficult to rationalize to their parent company or headquarters. Moreover, different states may have different capabilities and capacities. I hope that the federal government supports the states to achieve parity with capabilities,” he said.

For Untal, he said the IT-BPM industry has benefitted a lot from the strong industry-academe-government partnership.

“We need to sustain programs that promote a healthy business environment, as well as academe and industry initiatives that will allow us to scale with the jobs of the future,” he said.

Agudo said automotive firms would likewise benefit from greater collaboration and partnerships.

“Partnering with government, the academe, non-automotive enterprises, and communities are the way for us to do business right, that is, to work for prosperity for all. I am for advancing new modes of collaboration that underscore the heart and the human face of business,” she said.

Agudo said policies to boost competitiveness and the ease of doing business in the country would be beneficial in promoting the growth of the industry.

Lim said the government should also continue its fight against corruption and smuggling to help businesses grow.