Swedish firms bullish on Philippines, but frown on red tape
MANILA, Philippines – Swedish companies doing business in the Philippines forecast double-digit growth in the coming years, the latest report of Business Sweden in Manila said.
The report, which was made public in a press briefing on Monday, April 8, indicated that most Swedish firms remain upbeat on the Philippine economy and expect 10% growth of sales per annum in the next 3 years.
"There has likely never been a better time to enter the Philippines. The market has proven itself with 20 years of consecutive economic growth coupled with stable government finances," Business Sweden said.
Ulf Wennblom, Business Sweden in Manila country manager, also noted the country's solid economic fundamentals, the government's infrastructure push, and the young population as attractive factors for Swedish firms to enter the Philippine market.
The business organization also noted these 4 key trends in the Philippine market:
- Conglomerates and large Philippine companies are expanding in international markets.
- The Philippines is becoming more domestic focused and the government is implementing an inclusive growth strategy.
- Key sectors are developing rapidly and automation and digitalization are about to make major inroads.
- Infrastructure deals are becoming larger and more complex, and China’s involvement is expected to increase.
There are 20 large Swedish firms present in the Philippines. They have a combined revenue of SEK 5 billion or roughly P28.1 billion as of 2018.
The report said the Swedish firms generated some 30,000 direct and indirect jobs related to production, sales, and service.
While generally bullish, the report also noted that doing business in the Philippines "is not easy."
Business Sweden said it sees "cautious optimism" in firms due to bureaucracy and regulatory changes as potential source of risks.
Of the Swedish companies surveyed, 69% said they had a hard time dealing with government permits and 54% cited infrastructure constraints as a problem.
"Majority still expect economic improvements, citing average confidence in the infrastructure push of the current administration," the report said.
Despite the difficulties, Wennblom said the growth potential and the Philippine economy's performance still outweigh the downsides.
The Philippines is 124th out of 190 economies in the World Bank's 2019 Ease of Doing Business ranking.
While the Ease of Doing Business Act was already signed into law in May 2018, its implementing rules and regulations has yet to be finalized. President Rodrigo Duterte has also yet to name the head of the Anti-Red Tape Agency. – Rappler.com