PH businessmen among world’s most optimistic, survey says


President Aquino(second from left) at a luncheon conference with Philippine businessmen at Malacañang presidential palace in Manila on September 17, 2010, together with Finance Secretary Cesar Purisima (right). According to the head of the Makati Business Club, Filipino business executives are more upbeat about the country’s economic prospects in 2012, with about 81 of them expecting to see higher investments approved by investment promotion agencies this year. AFP FILE PHOTO/JAY DIRECTO

MANILA, Philippines—Filipino business leaders are even more upbeat about the local economy at the start of 2013, ranking the Philippines the second highest in the world in terms of business optimism, the results of an international survey show.

The results of the Grant Thornton International Business Report (IBR) survey for the first quarter of 2013 showed that a “balance” of 90 percent of respondents among Filipino businesses were optimistic about the economy for the next 12 months, up by 18 percentage points from the last quarter of 2012.

This makes the Philippines the second most optimistic country in the survey, behind Peru, which has an optimism “balance” of 98 percent.

The “balance” refers to the proportion of companies reporting that they are very or slightly optimistic less those claiming they are slightly or very pessimistic.

The proportion of optimists in the Philippines is also much larger than the average balance of 29 percent for the Southeast Asian region and the 27 percent global average, according to the results of IBR survey that were released on Wednesday by audit, tax, advisory and outsourcing services firm Punongbayan & Araullo (P&A), the Philippine member firm of Grant Thornton International.

The same IBR survey, however, revealed an alarming gap in the Philippines between businesses’ hiring appetite and the depth of the local talent pool.

An increasing number of Filipino business leaders are citing a lack of availability of skilled workforce as a business constraint: 46 percent of local respondents consider it a roadblock to growth, a steep climb from 20 percent in the first quarter of 2012. And yet the same proportion of respondents – 46 percent – say they have plans to hire new people in the next 12 months.

“Considering this picture, business leaders may run into problems filling positions in their organization,” said Marivic Españo, chair and chief executive officer of P&A. “It’s an unfortunate situation, because we have a 7.1 percent unemployment rate and yet executives are complaining that they can’t find talent. Perhaps the private sector and the academic community can work together to address this gap before it gets bigger.”

This quarter, there was also a significant increase in the proportion of Filipino business leaders who cited transport infrastructure as a business constraint: from 20 percent in the last quarter of 2012 to 42 percent.

On a positive note, expectations for profitability and revenues among Philippine businesses are both up 10 percentage points: 74 percent and 76 percent, respectively.

As a whole, while global optimism pales in comparison to the Philippine business optimism, the global level was already at its highest since early 2011. It has also picked up from a balance of 4 percent last quarter.

“Leading up to 2013, there were several positive forecasts for the Philippines, with independent economists projecting stronger growth for the next couple of years. So there is good foundation for this surge in optimism among business leaders,” Españo said. “And I think businesses here are picking up on the improving mood in the more mature markets, such as the US and Japan.”

Optimism in both countries showed marked improvement this quarter compared to the last quarter of 2012: from -4 percent to 31 percent for the US; and from -70 percent to -2 percent for “perennial pessimist” Japan.

Another welcome indicator is that mature markets are showing signs of willingness to invest. In the European Union, 44 percent of business leaders now plan to increase investment in plant and machinery in the coming year, up from 26 percent three months ago. Businesses in the G7 (34 percent, up 7 percentage points), North America (33 percent, up 5) and the PIGS (Portugal, Italy, Greece and Spain) economies (42 percent, up 27) all report strong increases in investment expectations.

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  • go88

    76 percent of our GDP is owned by roughly 40 families … many of whom were Abnoy’s campaign backers … for sure those businessmen who are milking the country must be among the most optimistic in the world. Sweet deals, infrastructure for their projects but paid with public funds, monopolies, business without risk this is all music to their ears played under Abnoy’s reign …

  • disqusted0fu

    Optimism can only go so far, as well as survey results. What’s really important is the outcome of these optimisms in the actual environment, which as of now is not visible.

    Business in the PH is monopolized by a select few. Most of them are allies of Pnoy. For others, they are affected by this very monopolization, and by the rampant smuggling which the government denies and has so far failed to act on.

  • JasonBieber

    Optimism at the core of the issue means nothing or at least not much in business.

    You can have all the optimism but if it does not translate to earnings then it all does not amount to anything.

    The PH sees all these upgrades and surveys but the main thing that is lacking are the big foreign investors.Plus unemployment remains high. So maybe a few businessmen are happy because they are part of the elite few who can consider PNoy a buddy but for the rest of the country,,,everyone else is having a tough time.

  • Weder-Weder Lang

    Grant Thornton International is a consultancy firm renowned for its history and experience in advising clients on how to dodge taxes between territories or locations. This consultancy firm is best of breed when it comes to regulatory arbitrage. So when Grant Thornton International proclaims PH businessmen as the world’s 2nd most optimistic, it only means there are many tax loopholes or regulatory vagueness in this country to take advantage of. Not to mention of course the ease with which dirty money can be laundered in our casinos as they have been exempted from Anti-Money Laundering Law thanks to the senate, the congress and President PNoy. Stranger still, Peru is being touted as no. 1 in business optimism but that country’s FDI has constantly ranked lower than Malaysia’s in the last 5 years. What was the basis for their optimism remains a mystery to most people in this planet.

    Optimistic or not, we can always expect Doris Dumlao to be the most cheerful cheerleader of the PSEi, cheerleading it all the way to 10,000. The wonders of cheerleading and optimism. A self-reinforcing virtuous cycle that eventually turns vicious. In other words, a bubble. Now that’s according to Charles Kindleberger.

    • carlcid

      My feelings exactly! When Peru is at the top of the list, it’s not exactly a list one would be proud to be in. As Nobel prize-winning economist Paul Krugman wrote in a recent article: “the best predictor of crisis is large inflows of foreign money: in all but a couple of the cases, the foundation for crisis was laid by a rush of foreign investors into a country, followed by a sudden rush out”.

    • NoWorryBHappy

      “What was the basis for their optimism remains a mystery to most people in this planet.”

      You hit the head of the nail! En punto !
      In Mars we don’t have these nonsense.

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