SWEDISH FIRMS cited regulatory challenges and foreign ownership restrictions as among the obstacles they face when investing in the Philippines.
On Thursday, Business Sweden and the Swedish Embassy presented the Philippine Market Report for 2024, which is intended to point out opportunities available to Swedish firms.
The report found that Swedish firms perceive the current government as pro-business, but noted inconsistent enforcement and bureaucratic inefficiencies.
“While the Philippines has established legislative frameworks to guide industries, Swedish firms report that the enforcement of these laws is inconsistent and occasionally lenient compared to other ASEAN nations,” the report read.
It cited red tape, delays in value-added tax refunds, onerous permit approvals, and customs handling as their top concerns.
“I think what we’ve captured is that it’s hard to get a good grasp on what needs to be done, and I think who to talk to and how to navigate the whole system to obtain the relevant permits. It’s different for each sector, of course,” according to Johan Lennefalk, trade commissioner of Sweden to the Philippines.
“Foreign ownership, I guess, is one type of restriction that applies to a number of areas that can prevent companies from further investing in the country. You know, ensuring full ownership of operations,” he added.
Mr. Lennefalk said that Swedish firms are at any rate optimistic about entering the Philippine market, with at least five companies expressing interest in recent months.
“A lot of what’s done here is related to maybe assembly, testing, and manufacturing. So companies that see the Philippines as another regional hub for that, maybe importing some parts from other countries, doing the assembling and testing here, to supply the region,” he said.
“As we all know, there’s kind of a regionalization in the world, with Europe, the northern part of Asia, and then this part of Asia, to supply nearby markets. So, companies that are evaluating whether the Philippines should be one of those hubs,” he added.
According to the report, Swedish firms are being directed to explore opportunities in infrastructure, renewable energy, sustainable mining, healthcare, consumer goods, and digitalization.
“These sectors align with the Philippines’ growth priorities, offering Swedish companies a strategic advantage,” the report overview read.
For the Philippines, the areas of opportunity are infrastructure, energy, mining, healthcare, consumer goods, information technology and business process outsourcing, and manufacturing.
“Swedish companies, leveraging their expertise in sustainability, innovation, and industrial solutions, are well-positioned to contribute to and benefit from the country’s ongoing development,” it added.
More than 50 Swedish companies operate in the Philippines, including those represented by local distributors. — Justine Irish D. Tabile