MANILA, Philippines -- With the current global economic crisis, confidence level among Asian small-to-medium scale enterprises is at its lowest in the last five years, a recent study showed.

According to the Asian Business Monitor (ABM) commissioned by the logistics firm UPS, the

The global economic crisis has forced many Asian companies to implement measures to remain afloat, said UPS Philippines Managing Director Tim Gohoc.

He said Asian SMEs are now implementing belt-tightening initiatives to maintain cash flows for operational expenses such as rent and utilities.

The ABM survey covered companies in the Philippines, Singapore, Australia, China, India, Hong Kong, Japan, South Korea, Malaysia, Indonesia, Taiwan and Thailand.

The ABM started in 2005. This year, it sampled 1,200 Asian companies from 12 countries with an equal distribution of 100 samples from each country.

Majority of SMEs in the survey showed that they consider staff cuts as the last option.

Companies in all countries also consider that hiring more people in the coming months was inevitable.

But generally, 2009 showed that staff hiring is at its lowest, the survey showed.

“In the Philippines, 73 percent of SMEs are considering tightening cash management flow in an effort to fight the recession. Sixty-three percent plan to reduce operational costs. Less than half are planning to reduce staff costs,” Gohoc said.

Gohoc said that part of Asian SME’s coping mechanisms is diversifying revenue streams.

Fifty-six percent of SMEs surveyed said they have benefited from globalizing through international trades and moving to higher value-added products and services.

Malaysia, at 23 percent, has the highest confidence level when it comes to implementing globalization schemes through partnerships, acquisitions and other business ventures.

Unfortunately, SMEs in the Philippines and Indonesia have the lowest perception of globalization.

The information technology industry is, for one, perceived to be the highest economic pillar among those surveyed at 28 percent.

India and South Korea, with their huge business process outsourcing and gaming industries, posted the highest at 54 percent of SMEs betting on IT.

“Philippine SMEs, meanwhile, are still focused on agriculture, forestry and fishing as the growth drivers for the next five years. Manufacturing ranks second while building and construction is close third,” Gohoc said.

Forty-six percent of Asian SMEs perceive better government regulations and policies would lead to recovery.

The Philippines shares the same sentiment with 65 percent of companies believing that better government policies would lead to economic recovery.

Among the recommendations of the ABM to Asian governments is better support for SMEs through funding incentives, education and research and development. Better transportation infrastructures must also be in place to optimize productivity.

Gohoc said that SMEs across Asia must also explore other business models and partnerships to help them cope during the crisis and prepare for the recovery.