Philippine business community 2nd most optimistic in the world - report
Filipino business leaders like their prospects, more so than nearly all their counterparts all over the world.
The 2012 second quarter Grant Thornton International Business Report; which was released by audit, tax, and advisory services firm Punongbayan & Araullo; showed that the Philippine business community is the second most optimistic in the optimism league table.
The Philippines scored 90 percent, just behind Peru’s 96 percent and tied with Chile. The Philippines was at fourth spot last quarter, behind Peru (90 percent), Brazil (86 percent) and the United Arab Emirates (84 percent).
For this second quarter, a balance of 40 percent of Philippine respondents expected increased profitability, same as last quarter. But in terms of revenue improvement expectations, the balance dropped from last quarter’s 48 percent to 44 percent. The proportion of businesses expecting to hike prices grew to 30 percent from last quarter’s 14 percent.
“The drop in revenue expectations could be due to businesses expecting a reduction in sales volumes as a result of price increases,” Marivic Españo, P&A’s chair and chief executive, said in a statement. “Costs attendant to doing business, such as oil prices for example, which were on the high end at the start of the second quarter, are normally passed on to consumers, so business leaders are naturally looking at a drop in volume sales.”
Also, 80 percent of the respondents in the report plan to increase salaries either in line with inflation or by causes other than inflation. None of the businesses intend to reduce pay.
A drop in employment expectations was also a noticeable trend. Last quarter, a balance of 42 percent of businesses expected to add to their personnel numbers but that proportion has been reduced to 28 percent this quarter.
“You expect business leaders to adjust where they can, considering the new realities of their operations,” Españo said. “Unfortunately, this quarter that adjustment involves holding off on hiring more people and instead focusing on coming up with competitive pay packages for their existing team.”
On the issue of business constraints, 32 percent of Filipino business leaders cited information and communications technology as a major hindrance to their growth.
A shortage of long-term finance and a shortage of working capital are also in the list of hindrances with more businessmen; from 6 percent last quarter to 18 percent, and from 12 percent last quarter to 22 percent, respectively; cited the two as major constraints.
And because the survey was conducted as Chief Justice Renato Corona’s impeachment trial was winding up, 84 percent of local business leaders said that tension between the judiciary and executive branches of the government had no impact on their business. This is a two percent increase from the previous quarter.
The data for this latest report were drawn from interviews with 3,000 businesses from all industry sectors and from both listed and privately-held businesses across the globe. The target respondents were chief executive officers, managing directors, chairmen or other senior executives. The interviews were conducted in May/June 2012.
The Grant Thornton International Business Report provides insight into the views and expectations of over 12,000 businesses per year across 40 economies. The survey draws upon 20 years of trend data for most European participants and 10 years for many non-European economies. — DVM, GMA News
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