Europe-PH News

MANILA — European businesses expressed optimism for the economic growth of the Philippines where they see their companies expanding in the coming years.

Based on the 2024 Business Sentiment Survey conducted by the European Chamber of Commerce of the Philippines (ECCP), 85.30 percent of respondents say they expect their level of trade and investment to increase over the next 4 years. Meanwhile, 11.30 percent say it will remain the same and 3.30 percent say investments will decrease. Eighty-one percent of respondents also say they expect their company to expand in the next 4 years.

Among the top key factors that are driving the interest of European businesses in expanding their presence in the Philippines are the following: economic recovery and growth opportunities, stable government and political system, improvement in infrastructure, improvement in sustainability practices, adequate laws and regulation for foreign investment, diversification of customer base, among others.

But based on the same survey, ECCP members also bared their concerns which includes policy continuity and predictability, geopolitical risks and uncertainty, transparency and streamlining of regulations and policies, digital transformation, inflationary/ rising prices, and climate-related disasters.

Seventy-five percent of respondents also say there are still significant amounts of barriers to investment, business activities, or overall ease of doing business in the country.

At an economic forum organized by ECCP, a World Bank economist also said there are many risks for the country like geopolitical, economic, policy, climate, and technology. 

Gonzalo Varela, WB Lead Economist and Program Leader for Brunei, Malaysia, the Philippines said the country needs to actually implement the laws properly in order to attract more investments.

“Navigating complex business environment in sectors that in principle were open, but in practice it will be a challenge. The difference between what is written in the law and what actually gets implemented then once the political economy gains,” said Varela.

Varela also mentioned the need to further improve ease of doing business. He noted for example that in order to build an offshore wind plant, over 300 signatories are needed.

ING Bank Managing Director and Country Manager Jun Palanca agreed that improving ease of doing business is very important, especially as there are also uncertainties for the economy in 2025.

“The global environment that also poses a lot of risks- a number of conflicts everywhere, a new president in the US, how that impacts the global economy with potential new tariffs,” Palanca said.

But both Varela and Palanca remain optimistic for the Philippine economy. Palanca said there are possible investment opportunities in banking, energy, telecommunication, and infrastructure. While the World Bank sees a high growth rate for the country next year.

“We are expecting solid growth rate at around 6%. That makes the Philippines the second fastest grower in the region,” said Varela.