Hong Kong Trade Development Council (HKTDC), the arm of the Hong Kong government that is involved in the international marketing of Hong Kong-based manufacturers, traders and service providers, and is tasked to analyze the market potential of various overseas markets, has published a country profile on the Philippines entitled, “The Philippines – A resilient consumer market in ASEAN.”

The publication provides basic information on the current state of the Philippine economy following the global financial crisis as well as practical tips on conducting business in the Philippines for Hong Kong companies. The main points of the country profile are:

1. The Philippines, unlike other economies in ASEAN, was not as severely affected by the global financial crisis due to its robust domestic market, as well as having a lower percentage of its economy tied to exports (about 30% of total GDP in 2008)

2. Among the ASEAN countries, the Philippines’ consumption rate as a percentage of the GDP is relatively high at around 70% as of 2008.

3. The country has two engines of growth which have helped it weather the global financial crisis, namely, the remittances of Overseas Filipino Workers, and the growth of the Business Process Outsourcing (BPO) industry, which fuels the economy’s high domestic consumption rate.

4. Unlike other emerging markets, the Philippines has a well developed retail market, and as such, can provide a means by which Hong Kong companies can penetrate the Philippine market. At the same time, due to the close proximity of the Philippines to Hong Kong and the large Filipino population working in the HKSAR, Filipinos have a high awareness of Hong Kong brands.

5. The paper cites means by which Hong Kong attracts Filipinos - as a consumer market of retail shoppers who regularly shop in the city, and as the destination of choice of Filipino traders/buyers seeking to network with potential sellers/buyers in the trade fairs held in Hong Kong.

6. The paper warns that although the country has a strong domestic economy, it is still susceptible to the external economy, which could still pose a risk for investors. At the same time, while domestic spending may be high, Filipinos, in the face of the global financial crisis, are opting for cheaper/discounted products and brands, which Hong Kong companies may not be able to compete with

The country report was an independent effort of the HKTDC after studying data from various sources that showed that the Philippines had remained relatively resilient in the face of the global financial crisis. In their assessment, the HKTDC sees the HKSAR’s economic prospects in the long-term as being focused on building their economic relations with developing Asian economies, which have managed to weather the global recession. Hong Kong businesses can positively consider the Philippines for increased trade and at the same time contribute effectively to the continuing warm and close Philippines, Hong Kong relations