APEC companies upbeat on Philippine prospects – Survey

MANILA, Philippines - Despite a looming change in government, businesses are mostly optimistic on their operations and expansion plans in the Philippines among member-economies of the Asia-Pacific Economic Cooperation (APEC) next year.

According to the latest APEC CEO Survey, 51 percent of corporates are confident their revenues will expand over the next 12 months in the Philippines, higher than the regional average of 28 percent.

A total of 45 percent of those surveyed also plan to increase their investments during the same period. That was up 13 percentage points from last year and compares with the APEC average of 53 percent.

“The Philippines really has a bright future on revenue growth among all economies so far,” said Alexander Cabrera, chairman and senior partner at PricewaterhouseCoopers (PwC) in a briefing yesterday. 

Auditing firm PwC conducted the survey for the fifth year in coordination with the organizing committee of this year’s APEC meetings being held in Manila this week. 

Cabrera said demand for services in the country would increase, owing to an expanding middle class which serve as business “customers.” “If they grow the middle class, they grow their business.”

Risks however persist, he said, putting on top of the list the slow Internet connection as well as frequent natural disasters.

Geopolitical risks, such as the Philippines’ territorial spat with China, comes third, but Cabrera said this is counterbalanced by efforts toward a more integrated regional economy which bodes well for the region.

“As far as regional integration is concerned, we are quite optimistic...It will not be quite effective on the near-term, but they [businesses] are really looking forward to it,” he said, citing as an example the US-led Trans-Pacific Partnership.

The presidential elections next year was not included in the survey, but Cabrera said businesses are generally “not affected” by a change in government.

“They see the reforms to be irreversible,” he pointed out.

Across the region, natural disasters also topped the list of risks, cited by 82 percent of respondents. A total of 14.5 percent of them also cited geopolitical tensions to negatively affect business plans.

Meanwhile, Cabrera said technology is driving optimism in APEC.

“Technology will drive modernity in APEC and you see R&D (research and development) being done more in APEC economies,” he stressed.

Within APEC, the US, China and Indonesia suffered the largest drops in business confidence, while Vietnam, Thailand and the Philippines got the biggest boost.

The survey covered 800 CEO respondents in 21 APEC member-economies. It was conducted from June 23 to Aug. 21 this year.

“We would like to share this survey to policymakers so that they can make better policy decisions to support regional development,” said PwC China management board member David Wu in the same briefing.