More than a third of German companies operating in the Philippines described their current situation as bad amid the enhanced community quarantine in Luzon designed to contain the spread of coronavirus disease 2019.
A survey conducted by the German-Philippine Chamber of Commerce and Industry showed that 36 percent of the company-respondents considered their current situation as bad. About 40 percent expected their business conditions to become worse within the next 12 months and 42 percent had poorer mid-term expectations.
More half of those surveyed or 56 percent said they would invest less or not at all within the next 12 months.
The German-Philippine business community said despite the grim outlook, they remained committed to maintaining their employees, with 47 percent of those surveyed saying they would keep their headcount and with 9 percent even showing interest to expand their workforce.
“Judging from the results, we see that COVID-19 has led to an erosion of business confidence in the Philippines. This is understandable as the worldwide fight against the virus has caused the government to impose lockdowns, affected business activities and disrupted the general flow of goods,” said GPCCI executive director Martin Henkelmann.
The survey showed that demand (58 percent), financing (44 percent), economic framework (40 percent) and (36 percent) were seen as the largest risks.
When asked about the impact of the COVID-19 pandemic, almost a quarter of the companies said they were expecting a decline in sales by 10 to 25 percent while the same number of companies were anticipating a decline between 25 percent and 50 percent. About 13 percent of the companies were looking at more than 50-percent decline.
Results of the survey showed that the effects of the pandemic included travel restriction (82 percent) and postponed or canceled investments (60 percent), problems with the supply chains (55 percent), lacking products and services (49 percent) and missing demand for their products and services (49 percent).
“The survey shows the urgent need for more governmental measures to assist the companies. Furthermore, the instruments to permit companies to quickly access financial support should be deployed,” said GPCCI president Tristan Arwen Loveres.