Privately held businesses (PHB) in the Philippines ranked third in the optimism/pessimism barometer for the next 12 months of international group Grant Thornton, although the country’s rating slipped to 65 percent.
In the International Business Report (IBR) released by Grant Thornton’s local partner Punongbayan & Araullo (P&A), the Philippines placed third, behind India (83 percent) and Botswana (81 percent).
Completing the top five most optimistic are Brazil with 50 percent and Armenia with 46 percent.
The Philippines’ southeast Asian neighbors have lower optimism. Malaysia has 2 percent; Hong Kong, negative 49 percent; Taiwan, negative 50 percent and Thailand, negative 63 percent.
Optimism among PHBs around the world has slumped by 56 percent in the last 12 months, pushing the Grant Thornton International optimism/pessimism barometer to record a balance of negative 16 percent compared to 40 percent this time last year.
This is the first time in the survey’s six years that pessimists outweighed optimists. But the survey shows that pockets of hope remain especially among the emerging economies.
“Considering the global financial slowdown we are witnessing, you have to expect this kind of slump,” Greg Navarro, managing partner and CEO of P&A said.
“But even with this tempered optimism, we’re still in a relatively better place compared to other respondents; local businesses realize that this crisis does bring with it certain opportunities that favor them,” he added.
Since the Philippines started participating in the IBR in 2004, local business leaders’ optimism regarding the country’s economy has been on a steady upswing, peaking at a balance of 95 percent last year.
However, in spite of remaining in the top five most optimistic, the country’s optimism dropped by 30 percent to 65 percent from a high of 95 percent.
The survey proves that smaller economies have fared better during the global recession compared to mature economies like the United States.
According to the Department of Trade and Industry, the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) are on track to meet their investment targets for 2008.
Last year, the BOI and PEZA targeted P391 billion worth of investments; by the end of the first semester, the agencies had met 72 percent of their full-year target.
The BPO industry, which has become one of the largest contributors to the country’s economic growth, is expected to continue expanding despite the global financial slowdown.
“Other sectors, like the manufacturing and real estate industries, are also looking at big-ticket projects for 2009. There are ongoing infrastructure projects that will certainly make the Philippines an even more attractive investment location,” Navarro said.
“So we’re in a good position to weather this particular financial storm. For sure, there will be big challenges – already we’re seeing retrenchments of Filipino workers here and abroad. But if we keep our eyes open to opportunities and continue working to make this country even more investor-friendly, then I’m confident we will reverse what our survey is showing as a slump in Filipino business leaders’ optimism,” he said.–Elisa Osorio, Philippine Star