The Philippines is now preferred to Vietnam as an area of potential expansion by Australian businesses, according to a recent survey by the Australia-ASEAN (Association of Southeast Asian Nations) Chamber of Commerce.
The “Australian Business in ASEAN Survey 2019,” issued in early March, showed that Australian businesses continue to anticipate expansion in ASEAN, with 82% of firms planning to expand their trade and investment in the region over the next five years with the Philippines as the top choice.
“The Philippines is now the most popular market for expansion with 24% of firms planning expansion there, overtaking Vietnam (23%) as the most common destination for Australian investment,” according to the survey report.
For the Philippines, the survey noted the government’s “Build, Build, Build” program as among the draws.
“The country is also currently undertaking major economic reforms as well as programs to improve its competitiveness and ease of doing business performance to attract more foreign direct investments,” it added.
The report also identified barriers to further boosting investments in each ASEAN country.
For the Philippines, they were identified as restrictions to ownership and investment, corruption and infrastructure gaps, which were named as the main hindrances to investment by 41% of respondents.
Also among the major concerns turned up by the study are road congestion, bureaucracy, and the tax system.
Services make up more than one-third of Australian business in the Philippines. Together with information and communications technology and education and training, these sectors account for more than 60%.
About 73% of firms saw ASEAN as a “priority” region for their company.
The growth in the consuming class in ASEAN continues to be an attraction for almost two-thirds of firms.