The Philippines’ investment climate is one of the best in the Asia-Pacific region, a survey of multinational companies in the region showed.
Chris Fossick, JLL managing director for Singapore and Southeast Asia, cited The Economist’s Asia Business Outlook Survey (ABOS) 2014 which showed 49% of multinational companies (MNCs) in Asia surveyed said the investment climate in the Philippines is improving.
Only 6% said the investment climate in the Philippine is worsening, while 44% said it stayed the same.
The Philippines was second only to Myanmar in terms of improving investment climate in the region. The survey showed 77% of the MNC respondents said the investment climate was improving in Myanmar.
“The Philippines is effectively number one in the region because Myanmar is a special situation, the door only just opened and you would expect the investment climate to improve,” Fossick said in a briefing.
“Out of established countries in Asia, the Philippines is right up there with only 6% of respondents saying it was worsening and that would be probably industry specific.”
Chris Fossick, JLL managing director for Singapore and Southeast Asia, talks to the media in Makati City.
Global real estate service firm JLL had partnered with The Economist for the ABOS, which surveyed 334 large MNCs operating in Asia.
The survey also showed 46% of respondents believe the investment climate in China was improving but 32% said it was also worsening.
Overall, the survey showed multinational companies were positive on Southeast Asia, especially as manufacturing companies look for alternative locations outside of China.
“With costs going up in China and India, multinationals were looking for a replacement and they realized that Southeast Asia looks very cost effective now. The infrastructure has improved a bit and had a young population. Suddenly multinationals are starting to look back at places in Southeast Asia, where they can manufacture,” the JLL executive said.
The survey also showed 43% of MNCs believe profit margins are better in Southeast Asia compared to the global average.
MNCs also expect strong revenue growth in Southeast Asia, with a forecast of 8.2% for 2014, higher than the actual 6.9% revenue growth in 2013.
Key industries in PH
At the same time, Fossick named some key industries in the Philippines that are expected to continue strong growth.
“We think the offshoring and outsourcing industry will continue. It’s very much at the forefront of demand for commercial leasing in the Philippines. As the Philippine economy continues to improve, more and more MNCs that have entered here because of opportunities and local companies grow, we will see growth in financial services, particularly insurance; manufacturing to support the growth of the economy; consumer goods with the growth of the middle class,” he said.
Other key industries poised for growth are IT and healthcare.
The positive investment climate in the country is expected to boost demand for office space, especially in Metro Manila.
Fossick noted there is already strong demand for office space from corporate occupiers. For instance, companies such as Globe Telecom, Sun Life and Aboitiz group have set up their offices in Bonifacio Global City.
“Industry sector in the Philippines is expected to grow by 10.7% this year, further adding demand for office real estate, corporate headquarters and back-office,” Fossick said.
Meanwhile, JLL, formerly known as Jones Lang LaSalle, unveiled its shorter name and logo.
JLL said the shorter name and logo are more easily recognized and more suitable for digital applications.