MORE than half of Australian firms doing business in the Philippines cited corruption as their top concern.
Based on the results of the Australian Business in Asean Survey 2017, 52 percent of respondents identified corruption in the Philippines as the biggest challenge in the country, alongside barriers to ownership and investment (38 percent), and followed by infrastructure gaps (31 percent).
The Australian business community in the country has also identified taxation (24 percent), political instability (24 percent), and the cost of operations (21 percent) as high-impact challenges to business.
In the Philippines, Australian firms are mostly involved in professional and financial services. While almost half or 45 percent of these companies are focused on the local market, 31 percent have made the Philippines their global headquarters.
“Many members of the Australian business community have a long commitment to the Philippines,” the report said. At present, 28 percent of the Australian firms operated in the Philippines for about 10 to 20 years, while 17 percent have operated here for over two decades.
In recent years, there has also been a growing number of Australian companies expanding to the Philippines, with 14 percent of respondents starting their business in the country about two years ago.
“The Philippines has become one of the fastest-growing economies in Southeast Asia, with an average rate of around five to six percent in the last five years. The Philippine government has been active in pursuing economic reforms as well as programs to attack corruption in order to encourage more foreign investments,” the report reads.
“With the implementation of the Asean Economic Community, the Philippines is further pursuing major economic reforms in order to open its doors to the opportunities on trade and investment that is expected within the region,” it added.
Seventy-two percent of Australian firms said the Philippines’ top growth driver is its economic condition, followed by proximity to customers (59 percent), and ease of doing business (45 percent).
This makes the country the third most preferred expansion destination in Southeast Asia among Australian firms, together with Indonesia, with expansion rates of 15 percent. Vietnam and Myanmar emerged as top expansion sites, while Brunei was the least preferred market.
“(In the Philippines), areas such as agribusiness, information technology, education, training and development, infrastructure, energy and mining are some of the sectors being targeted,” the report said.
In 2015, bilateral trade between the Philippines and Australia was valued at $4.2 billion and has grown 50 percent since 2010, according to the Australian Trade and Investment Commission.
Major Australian exports to the Philippines are metal ores and concentrates, copper ores and concentrates, wheat and beef. Philippine exports to Australia include heating and cooling equipment and parts, mechanical handling equipment, pumps and parts, and electrical machinery.
Some of the popular Australian companies and brands in the Philippines are IDP, OceanaGold, QBE Group, Telstra, BYS Cosmetics, and Cotton On.