A 'few' European investors have left Philippines amid pandemic
MANILA, Philippines — A “few” European businessmen have left the Philippines as the pandemic fuels risk-aversion among investors.
“There have been few, some who left Philippines. To be honest, I’ll be surprised if they come back,” Lars Wittig, newly-elected president of the European Chamber of Commerce of the Philippines, said in a virtual press conference Wednesday.
“These companies were working in industries whose time was two minutes to midnight,” Wittig added.
Wittig said European businessmen found some local industries like manufacturing and garment “maybe obsolete” amid the health crisis. Manufacturing, for the most part, suffered at the onset of the pandemic, owing to supply chain disruptions and restricted mobility that constrains workers' movements.
“It basically helps to move forward that process that didn’t have a future here anyway,” Wittig said.
Central bank data shows net foreign direct investments from European countries fell 15.3% year-on-year in 2020 to $323.9 million, tracking a broader 24.6% annual decline in overall FDIs to the Philippines last year after the pandemic threw the economy into its longest recession since the 1980s.
Since then, attracting new European investors has become a difficult task for ECCP. Florian Gottein, executive director at ECCP, said investing in the Philippines has been a “painful process” for some European investors due to prolonged mobility restrictions.
“Imagine if someone is exploring potential in Philippines and has to come here, he basically has to spend two weeks in quarantine. It’s a very painful process at the moment, depends on how appealing (the Philippines) will be for investors,” Gottein, who joined Wittig during Wednesday’s press briefing, said.
But the business chamber remains bullish on the Philippines’ investment potential amid the pandemic. According to Gottein, the Philippines is especially attractive to European outsourcing companies that are currently on expansion mode as the global economy slowly recovers.
Interestingly, ECCP said the government has been “effective” in targeting main urban areas in terms of vaccination, something that the group wants to be “sustained” to avoid a return to hard lockdowns in the future. Political climate, another factor that foreign investors consider, is stable — even predictable — in the Philippines compared to Southeast Asian neighbors like Malaysia and Thailand, ECCP added.
“We’re getting in touch with organizations and groups to present the Philippines as an investment destination. What we’re targeting more are the small and medium-sized enterprises, also the backbone of EU economy,” Gottein said.
“They’re more risk-averse companies, they’re family. They do proper due diligence before they commit to enter a market,” he added.
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