MANILA, Philippines – The Philippines dropped nine notches in the emerging opportunity market index due to the low projected economic growth for the country this year, the latest issue of the International Business Report (IBR) of global auditing from Grant Thornton noted.
The country fell the most in the 2010 index, dropping from 17th to 25th place, the survey showed.
The report, released by Grant Thornton’s local partner Punongbayan & Araullo said the Philippine economy weathered the financial storm better than most of its neighbors over the course of 2008 to 2009 due to its lower dependence on exports, but continued reliance on remittances from an estimated five million Filipino workers overseas to fuel consumer demand is a significant risk to long-term economic growth.
Despite this tumble, however, Filipino business leaders covered in the survey feel optimistic about the country’s economic prospects moving forward. “If you look at how the indices were computed, you will see that the Philippines faltered because of the relatively slow economic growth that was projected for the country,” explained Raul Tomas, director for P&A’s Specialist Advisory Services. “And yet confidence amongst local business executives is on the rise. Let’s just hope that our business leaders can prove the prognosticators wrong by the end of the year.”
At an individual country level, emerging economies occupy four of the top five places in terms of business optimism for the year ahead: Chile, 85 percent; India, 84 percent; Vietnam, 72 percent; and Brazil, 71 percent. Of the other emerging economies, the Philippines, Botswana, mainland China and Malaysia all boast optimism balances of more than 40 percent.
The Philippines emerged as the sixth most optimistic country in this year’s IBR, with an optimism/pessimism balance of 68 percent. Filipino business leaders are particularly optimistic regarding profitability in the next 12 months, with 59 percent expecting their profits to increase over the course of 2010, below only Vietnam with 91 percent and India, 65 percent.
The Philippines’ labor market also appears to be fairly healthy. A balance of 29 percent of businesses expanded their workforce in 2009, while this year a balance of 40 percent are expecting to increase employment, and 70 percent will increase salaries at least in line with inflation. –Ma. Elisa P. Osorio (The Philippine Star)