MANILA, Philippines — More Philippine companies are planning to expand into other markets in the next three to five years despite weaker macroeconomic conditions due to pandemic, according to the result of a survey conducted by British banking giant HSBC.
According to the HSBC survey, the outlook for international trade is promising with Philippine companies showing significantly more confidence at 41 percent than those globally at 19 percent, and across Asia Pacific at 16 percent despite a a more difficult international trade.
Likewise, more Philippines companies think international trade would get easier in 2021, with 92 percent eyeing expansion into other markets over the next three to five years compared to global firms with 76 percent and Asia Pacific with 79 percent.
Trade in the region is expected to grow faster once the Regional Comprehensive Economic Partnership (RCEP) take into effect.
HSBC Philippines president and chief executive officer Graham FitzGerald said intra-regional trade accounts for 60 percent of Asia’s overall trade and would only grow when RCEP comes into effect.
“Asian integration will not only strengthen the region’s role in the global trading system, but also enable the next round of global economic growth, and this is a very promising outlook for the Philippines,” FitzGerald said.
A total of 4,131 companies from 16 APAC markets – the largest sample size yet – participated in the latest HSBC survey.
Business confidence has weakened considerably as only 60 percent of companies in Asia Pacific sees higher revenues in the coming year, down from 77 percent in 2019.
In the Philippines, however, where 200 companies were surveyed, companies’ confidence is more positive with 85 percent intending to increase investment in their business next year.
The resurgence of COVID-19 and its knock-on effects are seen as the main threats to economic recovery.
Almost two in three or 65 percent of businesses in the region plan to increase their investment in the coming year, primarily in sales and in marketing, as well as improving their cash flow and capital management.
“You can’t cost-cut your way to growth, so it’s encouraging to see that businesses in Asia Pacific, the Philippines included, are increasing their investment,” FitzGerald said.
In the current operating environment, he said businesses need to be extra judicious with how and where they can create value so that they can sharpen their competitive edge.
The pandemic has also driven businesses everywhere to rethink their supply chains.
“Consistent with survey results, Philippine firms are adapting to heightened risk, assessing suppliers based on their operational resilience, as well as selecting suppliers in markets with effective mechanisms for controlling future pandemics,” FitzGerald said.