A recent survey by the Australia-ASEAN (Association of Southeast Asian Nations) Chamber of Commerce showed that the Philippines has become the preferred area of potential expansion by Australian companies.
Issued in early March, the “Australian Business in ASEAN Survey 2019” revealed that Australian firms are keen on continuing their expansion in ASEAN. Moreover, 82 percent of these businesses plan to expand their trade and investment in the region over the next five years, with the Philippines as their top market choice.
According to the report, the Philippines is favored by 24 percent of Australian businesses. This effectively outranks Vietnam (23 percent) as the most popular destination for Australian investment.
Why the Philippines Has Become Top Choice for Australian Firms
The survey noted the government’s infrastructure program (“Build, Build, Build”) as one of the factors that draw them to the Philippines. It also added that the various economic reforms and programs improving the country’s competitiveness and ease of doing business helped in making the Philippines an attractive option for foreign direct investments.
Nevertheless, the report also identified barriers to further sustaining investments in the Philippines. These include corruption, restrictions to ownership and investment, and infrastructure gaps, which were pointed out as the main hindrances to investment by 41 percent of the respondents.
The study also showed other major concerns such as bureaucracy, road congestion, and the tax system – all of which are currently being addressed by the Duterte administration.
More than one-third of Australian business in the Philippines are composed of services. And together with education and training and information and communications technology, these sectors make up over 60 percent.
ASEAN is seen as a “priority” region for approximately 73 percent of companies. The growth in the consuming class in this region is still one of the factors that attract almost two-thirds of firms.
via BusinessWorld / Janina C. Lim