THE Philippines has emerged as one of the top markets for future business expansion by US companies in the 10 member the Association of Southeast Asian Nations (Asean), according to a study released on Friday.
The “2017 Asean Business Outlook Survey” found that the Philippines comes third after Vietnam and Indonesia, eliciting the biggest jump in terms of interest among US firms in the region.
About 27 percent of the 519 US senior executives polled this year indicated that their companies are thinking of expanding in the Philippines, up from 20 percent in 2015, according to a report published by the US Chamber of Commerce and the American Chamber of Commerce in Singapore.
Vietnam continues to be the top priority market, with the number of American businesses expecting to expand into the country up at 40 percent from 31percent.
Indonesia is second with 38 percent, up from 31 percent.
Other countries that attracted strong interest from US enterprises were Myanmar, Thailand and Malaysia.
The respondents cite a variety of reasons regarding their expansion plans, including diversifying their customer base, leveraging the availability of trained personnel, and capitalizing on reasonable production costs.
The majority of respondents (63 percent) reported expanding in current countries of operation. About 70 percent of those polled expected to beef up local operations in the Philippines.
Executives in Myanmar almost universally expect to expand (96 percent), followed by Vietnam (80 percent), and Laos (75 percent). Other countries with high scores in this area include Indonesia (68 percent) and Cambodia (65 percent).
Respondents from the consumer goods sector least expect their companies to expand, while consulting industries expect most for an expansion to happen.
The survey also solicited views on the current investment climate in the region, asking them to rate the Asean countries based on 16 business environment factors.
The Philippines came out strong in four areas: 50 percent in terms of sentiment towards the US (77 percent), availability of low-cost labor (72 percent), availability of trained personnel (68 percent), and stable government and political system (51 percent).
The Philippines weak in the areas of infrastructure (74 percent), tax structure (58 percent), corruption (53 percent), laws and regulations (49 percent), and ease of moving your products through customs (45 percent).
For US firms with roots in the Philippines, 19 percent expressed plans to expand, while 55 percent expect their workforce in the country to increase this year.
On profit outlook, about 79 percent say they expect to reap a profit in 2017, while 11 percent anticipate no change, and 4 percent expect to register a decline in earnings.
On their belief that the administration of President Rodrigo Duterte will be able to sustain the reforms instituted by the Aquino administration, 43 percent are optimistic while 15 percent are pessimistic and 40 percent are neutral.