PH firms show high degree of optimism

74.5% expect better operations in 2013

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A pedestrian walks past an advertisement for a shopping mall under construction in Manila on Jan. 31, 2013. Corporate Philippines is riding on a “sky-high” confidence level this year, topping business sentiment elsewhere in Southeast Asia on the back of good local economic prospects, British bank Standard Chartered said. AFP PHOTO/TED ALJIBE

Corporate Philippines is riding on a “sky-high” confidence level this year, topping business sentiment elsewhere in Southeast Asia on the back of good local economic prospects, British bank Standard Chartered said.

In a research note issued after conducting a regional road show, the oldest foreign bank in the Philippines said 74.5 percent of its top local clients expected their businesses to do better in 2013 than last year. Only 6.1 percent of local respondents thought that their businesses could do worse in 2013, based on a Feb. 5 research published by Stanchart titled “What Asean Corporates Think?”

Meanwhile, only 44 percent of top-tier clients in Singapore expected their businesses to do better this year while comparative levels were similarly much lower than that of the Philippines: in Kuala Lumpur (41 percent), Bangkok (44 percent) and Jakarta (46 percent).

“This is particularly bullish, considering the Philippines registered 6.6-percent growth in 2013, much higher than the 10-year average of 5.2 percent,” the research said.

“The degree of optimism was surprisingly strong. We have been highlighting the Philippines as an economic outperformer in Asia, but hearing the views on the ground, we were starting to look relatively bearish compared with local sentiment,” the research said.

Most clients expected the Philippine peso to appreciate relative to the US dollar in 2013, which the British bank said was in line with its overweight recommendation on the local currency. Overweight is a recommendation to load up on a particular asset or security in excess of a benchmark index.

The research said there were more mixed results when respondents were asked about the primary market of concern in 2013. A majority (54.5 percent) still saw Europe as the primary region of concern this year, while the United States received a sizable amount of attention as well (36.4 percent). The resurgence of China was of concern to only 9.1 percent of the respondents, while there were no respondents who were worried about the Philippine economy.

“We believe this reflects the Philippines’ relative insulation against external cycles, along with strong growth prospects that have alleviated domestic concerns,” the bank said.

Meanwhile, the report said certain clients felt that the biggest challenge to their businesses was to match last year’s revenue trend, with 43 percent concerned about sustaining business revenue growth. Other clients were concerned about managing foreign exchange and interest rate risks (26 percent) and regulatory/policy (22 percent). “We believe that this is attributable to the policy changes—such as on special deposit rates and taxation—in response to the capital inflows to the Philippines,” the research said.

By client category, Stanchart said financial institution clients were particularly more bullish on the peso and marginally less optimistic on the economy. Asked about their primary market of concern in 2013, financial institutions were more concerned about Europe while corporate clients were more concerned about the United States.

“We attribute this to the sources of volatility in these markets—Europe is more likely than the US to cause a financial contagion, while the US has more direct trade and overseas workers’ remittance links with the Philippines,” the research said.

Financial institutions were more concerned about managing foreign exchange and interest rate risks than corporate clients, who were focused on sustaining business revenue growth, the research said.

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  • tra6Gpeche

    I am excited that Corporate Philippines is riding on a
    “sky-high” confidence level. Hopefully these companies in the Philippines
    will give their employees and workers the same “sky-high” confidence
    they are feeling right now. They should get rid of the contractual basis system
    of employment and give the Filipinos permanent and secured employment. It is
    time for these companies to respect the dignity of those who work for them.

  • Pepito Manaloto

    Sana naman itong optimism at bullishness na ito ay ma-convert sa trabaho…

    Kung hindi, bale wala lang.

    • http://twitter.com/negrongbagsik Jayson Barrientos

      dont worry it will come soon, palaging nauuna ang optimism, will result to drive stock market index the everything else follows, we just need to be patient. 

  • ProudPinoyinLosAngeles

    Oh! Nasaan ang mga militanteng traydor sa bayan/kamag-anak ni pandak/negatrons/talangka dito? Boring naman! LOL

    • http://twitter.com/JuanTamadachij Juan Tamadachij

      Patience, they will soon be on this thread and liven up our day. They do provide good entertainment, don’t they?

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