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Mixed response to tax reforms in OBG Business Barometer: The Philippines CEO Survey 2019

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Most of the executives interviewed for the 2019 edition of the Business Barometer: The Philippines CEO Survey carried out by Oxford Business Group (OBG) were upbeat about the country’s prospects, although they remained divided about the impact of President Rodrigo Duterte’s tax reform packages.

As part of its survey on the economy, the global research and advisory firm asked around 100 C-suite executives from across the Philippines’ industries a wide-ranging series of questions on a face-to-face basis aimed at gauging business sentiment. The results are now available to view in full on OBG’s Editors’ Blog at:

When asked their expectations of local business conditions for the coming 12 months, the vast majority (92%) of respondents described them as positive or very positive, with 74% also saying they expected their firm to make a significant capital investment in the year ahead.

However, a question about the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) on the local business environment drew a more mixed response. More than one-third (35%) of those surveyed told OBG that TRAIN had affected local business conditions in a negative way, while 33% viewed its impact as neutral. On the other hand, 30% described the tax reform as having had a positive or very positive effect on local business conditions.

Over half (54%) of respondents also described the Philippines’ tax environment as uncompetitive or very uncompetitive on a global scale, with just 17% giving a favourable response.

On a more positive note, the government’s flagship Build, Build, Build programme was largely viewed by business leaders favourably, with 56% telling OBG that they believed the infrastructure drive was impacting the wider economy in a positive or very positive way, despite the limited scope for private investment in major infrastructure projects as a result of the government’s preference for official development assistance (ODA) and public funding.

Against this backdrop, 33% of respondents identified engineering as the skillset in greatest need among the domestic workforce, followed by leadership (25%), and research and development (18%).

Unsurprisingly, given last year’s high levels of inflation, a plurality (43%) of executives chose commodity price rises as the external factor that could most impact the Philippine economy in the short to medium term, well ahead of trade protectionism (27%), despite the global disruption caused by the US-China trade war. Inflation averaged 5.2% for 2018, well outside the central bank’s target range of 2-4%, but the rate has eased in 2019.

Commenting in his blog, Patrick Cooke, OBG’s Regional Editor for Asia, said that while TRAIN had exempted many low-wage workers from income tax since its introduction at the beginning of 2018, it was also partly blamed – somewhat unfairly – for causing inflationary pressures last year due to higher excise taxes on fuel and certain consumer goods.

“With oil prices remaining stable so far in 2019 despite geopolitical tensions in the Gulf and Latin America, and the recently signed Rice Tariffication Law helping to lower rice prices, we would expect Philippine CEOs to be less concerned about inflation and – by extension – commodity prices in our next survey,” Cooke said.

Cooke noted that while executives in the main reacted positively to the Build, Build, Build programme, the survey also highlighted their concern about potential construction skills shortages, which risked slowing the progress of infrastructure development.

“The importance of state spending on infrastructure to the wider economy is evidenced by the slowdown in GDP growth that occurred in the first quarter of 2019 due to delays in passing the government budget and, consequently, releasing public funds,” he said. “However, despite the many challenges that economic policymakers face in the Philippines as they attempt to foster inclusive growth, move domestic industries up the value chain and address stark income inequality, they can feel assured that a significant majority of the business community remains upbeat about the country’s prospects.”

Cooke’s in-depth evaluation of the survey’s results can be found on OBG’s Editor’s Blog,

titled ‘Next Frontier’. All four of OBG’s regional managing editors use the platform to share their expert analysis of the latest developments taking place across the sectors of the 30+ high-growth markets covered by the company’s research.

The OBG Business Barometer: CEO Surveys features in the Group’s extensive portfolio of research tools. The full results of the survey on the Philippines will be made available online and in print. Similar studies are also under way in the other markets in which OBG operates.

About OBG Business Barometer

OBG Business Barometer: The Philippines CEO Survey Copyright (c). All rights reserved.

This survey has been designed to assess business sentiment amongst business leaders (Chief Executives or equivalent) and their outlook for the next 12 months. Unlike many surveys, the OBG Business Barometer is conducted by OBG staff on a face-to-face basis, across the full range of industries, company sizes and functional specialties. The results are anonymous.

OBG Business Barometer is based on data from companies with revenue within the following parameters, among others:

  • 91% of companies surveyed were private
  • 45% of companies surveyed were local
  • 6% of companies surveyed were regional
  • 48% of companies surveyed were international

The data generated allows for analysis of sentiment within an individual country, as well as regionally and globally. Additionally, comparisons can be drawn between both individual countries and regionally. The results are presented statistically within infographics and discussed in articles written by OBG Managing Editors.

OBG provides this survey, infographics and accompanying analysis from sources believed to be reliable, for information purposes only.

OBG accepts no responsibility for any loss, financial or otherwise, sustained by any person or organisation using it. For further information on the content of the survey, please contact: Patrick Cooke, Regional Editor, Asia, at Should you wish to reproduce any element of this survey, infographics and accompanying analysis please contact: Any unauthorised reproduction will be considered an infringement of the Copyright. For further details about OBG and how to subscribe to our widely acclaimed business intelligence publication please visit


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About Oxford Business Group

Oxford Business Group (OBG) is a global research and advisory company with a presence in over 30 countries, from Asia, the Middle East and Africa to the Americas. A distinctive and respected provider of on-the-ground intelligence on the world’s fastest growing markets for sound investment opportunities and business decisions.

Through its range of products – Economic News and Views, OBG Business Barometer – CEO Survey, OBG Events and Conferences, Global Platform – exclusive video interviews, The Report publications – and its Consultancy division, OBG offers comprehensive and accurate analysis of macroeconomic and sectoral developments.

OBG provides business intelligence to its subscribers through multiple platforms, including its direct 6 million verified subscribers, Dow Jones Factiva subscribers, the Bloomberg Professional Services’ subscribers, Refinitiv’s (previously Thomson Reuters) Eikon subscribers, and more.

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