Business leaders’ faith in the Philippine economy remains strong, even more bullish than the average optimism in the global economy, according to the latest quarterly International Business Report.
Grant Thornton’s business survey for the fourth quarter of 2017 showed optimism level in the Philippine economy reached 86 percent, higher than the global average of 58 percent. This is also higher than the 84 percent recorded in the previous quarter.
The fourth quarter figure is the second highest in 2017, following the Jan.-Feb. data which showed an optimism level of 98 percent. The survey covered 2,500 businesses in 36 economies.
Businessmen’s expectations in revenue increases, profitability and employment, among others, were also high.
Marivic Españo, chair and CEO of P&A Grant Thornton, attributed the bullishness to the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) bill, which serves as the first comprehensive tax reform package under the Duterte administration.
Passed in December last year, the TRAIN Act lowers the personal income tax, but in its place are higher consumption taxes in various products such as sweetened beverages, fuel and car purchases.
Still, government officials said 99 percent of income tax payers would benefit from the TRAIN law. Critics, on the other hand, have often described some of its provisions as anti-poor.
“The results of the survey show that businesses are very confident in the economy. For one, the recent passage of the first tranche of tax reforms is expected to support public spending and investments in infrastructure and social services which, in turn, will create more opportunities for businesses,” said Españo.
Optimism among business leaders in Asia Pacific reached 58 percent, marking a historic high as the latest quarterly finding jumped 17 percentage points.
“Confidence has boomed in Asia Pacific, reaching its highest peak in the history of the [report]. While China has experienced growing levels of optimism over the past year or so, Japan’s break into positive territory is a real sign of change in the region,” Españo said.