A RECENT survey polled from the European business community in Southeast Asia showed that the Philippines topped in terms of labor availability in the region yet scored poorly in business regulations.
Based on the third annual EU-Asean Business Sentiment Survey, the Philippines leads in the availability of skilled and competitively priced labor, and ease of recruiting labor.
However, it lagged in terms of business regulations where it ranked last in terms of government and political system and prevalence of business-friendly customs procedures. Meanwhile, Singapore generally performed best in these areas.
There were 333 senior executives across the Asean who took part in the suvey, and of which 51 were based in the Philippines.
“This one I agree (with). Doing business or starting a business in the Philippines takes a long time, not only for foreigners but even to locals too. Even in the local government level, doing business here takes time and takes a lot of work. This is something that the Philippines needs to improve to attract investors,” said Sabino Dapat, European Chamber of Commerce of the Philippines (ECCP) Cebu Business Council chair.
“In the past, for how many years, this has always been the problem (ease of doing business) and our infrastructure too,” he added.
Free trade agreements
The same survey also revealed a strong support for a regional free trade agreement between the European Union (EU) and the Asean, with nearly nine out of 10 respondents saying that a region-to-region FTA would deliver more advantages than a series of bilateral deals, with 76 percent (up from 66 percent in 2016) saying that such a deal should be pursued “now.”
In the Philippines, majority of survey respondents (62 percent) see a free trade agreement (FTA) between the Philippines and EU as beneficial to business while 71 percent said further Asean economic integration is key to business success in the country.
Half of the respondents think the lack of an EU-Asean FTA put European businesses in the Philippines at a “disadvantage.” In addition, 70 percent of European businesses do not expect the Brexit fallout to have a significant impact on their businesses in the Philippines.
This move of the EU to foster closer trade ties and accelerate trade deals with the Asean, according to Dapat, could have stemmed from the United States, which is EU’s top trading partner, and its seemingly implicit decision toward a protectionist stance.
“The Asean presents an opportunity for the EU so this might have led the decision to push for an FTA,” said Dapat.
The EU and the Philippines are currently negotiating for a bilateral FTA. Indonesia and the EU are also currently in talks of a possible one. Meanwhile, Singapore and Vietnam have completed the negotiations.
Importance
“Asean is becoming the next key driver of global economic growth. This survey shows that European businesses will continue to contribute to Asean by increased trade, investment and employment. Respondents strongly support a deep and comprehensive a region-to-region EU-Asean FTA to enable greater European investment in the region and continued collaboration on reducing trade barriers and trade frictions,” said EU-ABC chairman Donald Kanak.
Seventy-five percent of European businesses expect an increase in Asean profits for 2017 while 71 percent have said Asean has become “more important in terms of global revenues over the last two years.”