More Filipino businesses have turned pessimistic about prospects this year as they brace for the impact of the Trump administration’s protectionist policies, banking giant Standard Chartered Bank said.
In a Feb. 15 report titled “Asean—Client sentiment on the mend,” Standard Chartered said a recent survey among Philippine clients showed that the pessimists increased to 31 percent of respondents this year from 20 percent last year.
“Clients appear slightly less bullish on the Philippines despite its strong growth momentum… This may have been due to the high growth base effect in 2016 and concerns over the anti-globalization tone from the US, which accounts for 77 percent of Philippine services exports,” Standard Chartered explained.
But while the number of pessimistic clients in the country rose, it was outpaced by the number of those optimistic about the Philippines in 2017, which also increased to 56 percent from 51 percent in 2016.
During briefings last month and this month, Standard Chartered’s clients in six Asean cities were asked to answer this question: “How do you see your business prospects in 2017?”
“Compared to 2016, clients appear slightly more optimistic this year” across the six Asean cities, Standard Chartered said.
“Growth optimists continue to outweigh pessimists in Vietnam, Indonesia and the Philippines. Client sentiment in Thailand has had a sea change, with the level of optimism in 2017 second only to Vietnam. Meanwhile, pessimists in 2016 outnumbered optimists. Clients in Singapore and Malaysia remain negative on growth, although their level of bearishness has moderated versus 2016,” Standard Chartered said.
“Client sentiment seemed to be largely in line with our 2017 growth outlook for Asean. We broadly categorize the Asean-6 countries into three main groups in terms of 2017 growth performance. Vietnam and the Philippines make up the first group, where we expect growth of more than 6.5 percent, although the Philippines’ growth may be a touch softer due to a high base. Indonesia and Thailand form the second group; we expect it to show faster growth in 2017 versus 2016, but remain below potential. Finally, Malaysia and Singapore may continue to face slower but manageable growth in 2017,” the bank said.
As for foreign exchange, clients in Asean generally ”remain US dollar bulls for 2017 despite the US dollar rally in the past few years,” according to Standard Chartered.
But Standard Chartered said that “Philippine clients exhibit the most bearishness, possibly affected by two years of forex underperformance and protectionist rhetoric from the US.” —BEN O. DE VERA