The future of PHL Business landscape

A significant feature of the disruption to markets resulting from the COVID-19 pandemic is a sudden and unexpected disruption to supply chains particularly those crossing multiple national borders.

As some countries reconsider their supply chains due to the global pandemic, China will lose business while other developing nations can seize this opportunity to gain new business from this global business restructuring.

Australia has expressed their dissatisfaction on how China mishandled the pandemic and their following actions and are moving to reduce their dependence. Japan on the other hand has moved fast and even providing incentives and money to Japanese Businesses operating in China to move out as soon as possible. European countries as well as the United States has also made similar announcements while still mitigating the effects of the pandemic.

So, where will these potential supply chain and manufacturing businesses go? That is the question as well as the opportunity for developing nations like the Philippines. For Japanese firms, their first country of choice is Vietnam, followed by Thailand and then the Philippines, which was mentioned by the Japanese Chamber of Commerce and Industry of the Philippines, Inc. (JCCIPI).

Global business restructuring considerations

Solutions that businesses may look to may include sourcing from different overseas markets, sourcing from domestic suppliers and spreading the production of components. But these developed nations cannot simply move back all the manufacturing and supply chains to their shores because it would cost them too much.

While it may be too early to determine overall patterns of how supply chains may reorder themselves, a many businesses are now reconsidering these questions sooner rather than later in making a decision that may be required to maintain reliable sources of supply.

Investors typically look for complementary infrastructure such as transport networks and telecommunications services, competitively priced utilities, liberal investment climate and predictable business environment.

What could limit the Philippines as country of choice is our potential policy inconsistencies, revisions and implementations. Another is our quality of infrastructure and high cost of electricity. We could also be judged based on our health services and pandemic response as well.

Local Businesses need to go Digital

There are three outcomes to the great lockdown in terms of business, either they will die, survive and/or thrive. Business strategies will shift to resilience and efficiency; the rise of contact-free economy; more scrutiny for business; changing industry structures, consumer behavior, market positions and sector attractiveness.

And the key that can enable a business to survive and thrive is digital. For restaurants, they can shift to take out, food delivery or provide DIY home recipes to their customers. For GYM/wellness centers, they should consider on-demand virtual coaching/guidance, as well as gym equipment selling or rental. Shopping malls have to move towards e-commerce or their own app that enables them to sell direct to consumers.

The tourism sector must use technology that use AR/VR which can enable virtual tours, live streaming and the like. The entertainment industry needs to adapt as well through doing online or live-streamed concerts, fairs, and shows (the same strategy for sports). Schools and education providers must shift to either pure online or blended education approach through webinars, homeschooling, and distance education enabled through digital technology.

We don’t really know what the future business PHL landscape will look like, but only those who adapted will survive and thrive!

“It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.” - Charles Darwin

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