GPCCI Business Outlook Survey unveils 2024 economic prospects in the Philippines

Every year in autum and spring, the network of Aussenhandelskammern (AHK) conducts a “Busines Outlook” survey in each of the countries they are active in. The Spring 2024 World Business Outlook Survey conducted by the German–Philippine Chamber of Commerce and Industry amongst its member companies revealed a consistently positive business outlook for the upcoming months in the Philippines amidst identified risks.

Optimism prevails

Of the nearly 70 businesses involved in German-Philippine relations surveyed, 50 % express optimism about their business prospects. Looking ahead to the overall economy in 2024, businesses display a higher level of optimism compared to the previous year, anticipating a better economic scenario, with a 17 % increase from 2023.

Favorable business environment

Businesses indicate a favorable environment in the Philippines for investment and job growth in the upcoming year, an improvement over the findings of the 2023 study. While the comparison figures are not available yet, it may be added that already in the Autum 2023 survey the member companies in the Philippines rated the business outlook in many areas higher than their ASEAN or even global peers.

Challenges to be faced

The survey does not only provide a picture about the (positive) business outlook that German-Philippine companies share in for the Philippines, but it addresses also the challenges faced. The key obstacles mentioned by most companies were:

Economic policy conditions
This may be attributed to complex regulations, constant policy alterations, and extensive bureaucratic processes.
High energy prices have emerged as another notable challenge, significantly affecting profit margins and operational expenses, particularly within sectors such as manufacturing. Last year, the Philippines ranked among the countries with the highest energy prices in Southeast Asia.
Supply chain disruptions and infrastructure deficiencies have been identified as a main challenge. Businesses respond to this challenge by expanding their supplier networks and entering new markets. However, businesses face additional challenges in diversification, such as finding suitable suppliers/business partners respectively increased legal and regulatory problems.

While overall a high level of optimism surrounds the economic outlook for the Philippines in 2024, the partially known challenges remain. Tackling these challenges will be imperative for an continuous and potentially even higher and sustained economic growth of the Philippines (which is achievable). The current administration is aware and addressing these challenges. Particularly the practical implementation of currently discussed and upcoming reforms will have to be monitored. In summary we expect not only the comparison figures with other countries (as soon as they will be released) as well as future survey to reflect a positive business outlook growth trend.