Singapore, a forerunner in international trade, has recently seen its economic prospects fall through as a result of the trade war between the US and China. These two global superpowers are two of Singapore’s largest trading partners and have caused the country’s trade-reliant economy to be stifled. Its full-year growth forecast was reportedly slashed last August and showed data of the economy shrinking by 3.3% last quarter. Reuters poll economists predict a 2.9% fall in Gross Domestic Product (GDP) by its final reading.
Singapore’s central bank also announced it would be easing its monetary policy and slowing the appreciation of the Singapore dollar amid the low inflation. The policy easing aims to assist workers with transitional difficulties given the current economic outlook.
Philippines’ Diverse Business Opportunities
Local business confidence is at a near two-year low with recession rumblings getting louder regarding the underperforming economic data. SBF-Experian SME Index’s findings show discouraged optimism from small and medium-sized enterprises, as well as more cautious employers. Singapore businesses are now highly considering expansion opportunities outside of the country, with the Philippine market as one of their top investment destinations.
Last 2018, Singapore was reportedly the second largest investor in the Philippines, and the largest export market among the ASEAN’s member-states. There are numerous Singaporean companies who have already outsourced staff and established offshore business operations here in the manufacturing and infrastructure industries. However, there continue to be overlooked sectors such as Information Technology and Digital Solutions that end up becoming untapped business opportunities. Nonetheless these prospects, that specialize in services such as web development and digital marketing, may provide more value in future companies looking to grow offshore. The Philippines will be able to help assist Singaporean businesses in this through staff leasing or providing a virtual staff that’s based in the country.
The Philippines’ economic progress and large, capable talent pool end up creating a compelling case for Singaporean investors. With less risks posed to their business and a steady supply of IT graduates to outsource a competent team from, Singaporean businesses will still be able to remain competitive in the global economy. Loh Chin Hua, Keppel Corp. CEO, additionally noted that businesses can borrow in the local currency that help in effectively cutting costs. They will furthermore get to explore how they can expand investments with the current administration’s “Build, Build, Build” infrastructure modernization program, which is now in full progress.
Possible Digital Partnership
Despite Singapore’s slowing economy, money invested in companies rose in the first nine months of the year. Start-ups operating in the digital tech industry accounted for a tremendous 93.2% of the total funds gathered. These companies will now need early-stage venture funding which may prove difficult given the current economic status. The success of these businesses therefore lie with Singapore setting up partnerships with other global markets. This is in hopes of aiding Singapore in merging with Asia’s digital growth.
In their 50th year of diplomatic relations, the Philippines would prove to be the perfect global partner for this to help continue strengthening their business ties with one another. The two nations can work together in developing talents with the appropriate skill sets to fuel the globalized digital economy. Singapore can impart developmental experiences and expertise in areas of interest with the Philippines. Meanwhile, the Philippines can provide the offshore manpower for start-ups with its ever-growing IT pool and proficiency in the outsourcing industry. This will also help Singaporean companies finally utilize the aforementioned untapped business opportunities that the Philippines has to offer.
Singapore’s GDP growth is still expected to pick up in 2020 but at a reduced rate. Despite all that Singapore’s Prime Minister, Lee Hsien Loong, at the Forbes Global CEO Conference said it best: “We thrive best in Singapore when the region is stable, when other countries are prospering, and we can do business with them.”