Capitalists And Money

Most PHL firms keen on ramping up investments in ASEAN countries

MAJORITY of Philippine businesses are looking to invest more in Southeast Asia, particularly Singapore and Thailand. Photo shows shoppers in a shopping mall on Orchard Road in Singapore, Dec. 23, 2022. — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

PHILIPPINE BUSINESSES are keen on ramping up investments in the Association of Southeast Asian Nations (ASEAN) region this year, according to a survey by Hongkong and Shanghai Banking Corp. (HSBC).

“More than two-thirds of businesses in the Philippines plan to invest more in ASEAN. That compares to 61% that are adding to their investments elsewhere,” it said.

The report surveyed companies with annual revenues of at least $150 million from Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

“Businesses are planning to enter new ASEAN markets, expand into new business lines and invest in technology,” it added.

Almost three-fourths or 72% of the Philippine respondents plan to invest in the expansion into new markets in the region, followed by expansion into new business lines (58%), technology and digitalization (57%), sustainability (57%) and research and development (55%).

“Expansion into new ASEAN markets ranks as the top priority for businesses in the Philippines, ahead of improving customer experience,” the report said.

Majority of Philippine firms (90%) reported that they were confident about growing their businesses in Singapore and Thailand, followed by the Philippines itself (86%), Indonesia (82%), Malaysia and Vietnam (75% each).

“Some 85% expect intra-ASEAN trade to increase in 2024, with 39% expecting an increase of greater than 30%,” it added.

Meanwhile, HSBC data also showed that 41% of businesses cited macroeconomic uncertainties as the top barrier to entering the region, followed by rapidly changing regulations (31%), supply chain challenges (30%), and local technological capabilities (26%).

“The survey also found that macroeconomic uncertainty and the rapidly shifting regulatory and policy landscape are the top barriers for businesses in the Philippines looking to expand into new ASEAN markets, underlining the importance of advice and support from a banking partner,” it added.

Meanwhile, HSBC announced it launched its ASEAN Growth Fund worth $1 billion (around P56 billion) to help support the region’s growing digital economy.

“With a working population that is digitally native, increasing in size, and poised to consume more goods and services — especially on e-commerce — ASEAN has so much potential for growth,” HSBC Head of Commercial Banking for South and Southeast Asia Amanda Murphy said in a separate statement.

“We are delighted to launch our first-of-its-kind ASEAN Growth Fund and work with digital companies as they expand in the region and beyond,” she added.

The fund will be used to lend to companies that are “scaling up through digital platforms across Southeast Asia.”

“It supports new economy names, more established corporates, and nonbank financial institutions by assessing operating metrics tied to their cashflow-generative asset portfolio, rather than relying solely on traditional financial metrics,” it added.

HSBC Philippines Head of Wholesale Banking Mimi Concha said that the fund will help support new economy companies in the Philippines.

The Philippines’ digital economy is forecast to reach between $80 billion and $150 billion in gross merchandise value by 2030, according to Google, Temasek Holdings and Bain & Company.