The Philippines has the best availability of skilled and competitively priced labor and ease of recruiting labor in the Association of Southeast Asian Nations (Asean) region, according to a recent survey of European businesses in Southeast Asia.
The 2017 EU-Asean Business Sentiment Survey, conducted by the EU-Asean Business Council (EU-ABC), showed European businesses continue to have a very positive outlook in Southeast Asia and expect to see Asean profits increase in the years ahead.
About 75 percent of European businesses surveyed agree Asean has become more important in terms of global revenues over the last two years.
As a result, 86 percent of respondents see their level of trade investment in Asean rising in the next five years, according to the study, which polled more than 300 executives from European companies across Southeast Asia.
The survey stated on the Philippines majority of respondents or 62 percent see a free trade agreement (FTA) between the Philippines and EU as beneficial to business; nearly three-quarters of respondents (71 percent) said further Asean economic integration is key to business success in the Philippines; more than 50 percent of respondents think the lack of an EU-Asean FTA put European businesses in the Philippines at a disadvantage; 70 percent of European businesses do not expect the Brexit fallout to have a significant impact on their businesses in the Philippines.
The country, however, lags behind the rest of the Asean in terms of general business regulation.
Specifically, the Philippines ranked last among the six biggest Asean countries in government and political system stability and prevalence of business-friendly customs procedures.
It also had a low ranking in regulatory regime, fiscal structures, administrative costs for business and infrastructure.
Notwithstanding, the majority of European businesses surveyed are looking to expand their operations in the Philippines, consistent with the general finding that 94 percent of respondents plan to maintain or expand their current operation and headcount in the Asean region, the survey showed.
The other key findings of the survey are:
■ European businesses in the region are keen to see strengthened ties between the EU and ASEAN. More than four-fifths (88 percent) of European companies believe the EU should pursue a region-to-region Free Trade Agreement (FTA) with Asean, a significant increase on the 66 percent surveyed in 2016, and more than half (55 percent) feel they are at a disadvantage in Asean without an EU-Asean FTA;
■ Challenges for businesses remain, impeding Asean from reaching its maximum economic potential – almost two-thirds (61 percent) of European businesses say that non-tariff barriers are hampering supply chain efficiency; and
■ The EU-ABC, the primary voice for European business within the Asean region, is calling for the acceleration in negotiation of FTAs between EU and Asean. It is also supporting a region-to-region FTA with Asean, more frequent and regular interactions between EU and Asean governments and the private sector, and further advances in economic integration within Asean.
EU-ABC Chairman Donald Kanak said the Asean is becoming the next key driver of global economic growth.
“This survey shows that European businesses will continue to contribute to ASEAN by increased trade, investment and employment. Respondents strongly support a deep and comprehensive a region-to-region EU-ASEAN FTA to enable greater European investment in the region and continued collaboration on reducing trade barriers and trade frictions,” he added.
In response to the survey, Finance Secretary Carlos Dominguez III said the Duterte administration is investing heavily in human capital development to train its young, talented workforce and capitalize on the Philippines’ “demographic sweet spot,” which he describes as the Philippines’ comparative advantage in competing with Asia’s tiger economies. RIZA LOZADA