PHILIPPINE businesses are slightly less optimistic about prospects for the incoming year, a trend that is prevalent among other Asian economies. This is credited mostly to the instability of the Chinese economy, according to Grant Thornton’s International Business Report.

“Fears over the slowdown of the Chinese economy caused a shock to the system in 2015, and in the fourth quarter, the optimism of Asia-Pacific businesses plummeted. The good news is that it has improved since then. This is partly because the rebalancing of the Chinese economy creates new opportunities; demand for raw materials will not reach the heights we saw in recent years, but the need for services will continue to grow,” Marivic Españo, chairman and CEO at P&A Grant Thornton, said in a statement.  The report said business optimism for the next 12 months, especially of Philippine enterprises in 2015, was at 83 percent—a slight decrease from the 90-percent average recorded optimism for 2014.

But among the economies surveyed, the Philippines’s optimism outlook for 2016 is the third highest—along with India (89 percemt) as the first and Ireland (88 percent) as second.

Businesses in neighbor economies, such as Thailand have reported a drop in optimism from 10 percent to 26 percent in fourth quarter  from the year before. Malaysia’s optimism dipped also, year-on-year, from 30 percent to 20 percent.  Indonesia registered an increase in optimism from 47 percent for 2014 to 55 percent in 2015.  China recorded a 1-percent decrease from 27 percent to 26 percent.

As a region, however, businesses across the Asia Pacific reflected decreased optimism – from 36 percent in 2014 to 32 percent as the rolling average for 2015.

Globally, business optimism heading into 2016 stands at net 36 percent—only slightly down from the third quarter of 2015 and just above the 35 percent recorded a year ago. “The global economy continues to change and evolve, with shifting landscapes in major economies creating new challenges, but also new opportunities. Those businesses with an instinct for growth will be best placed to spot these emerging pockets of opportunity, build new trade links, and make the most of the brighter outlook being reported for 2016,” Españo added.

Grant Thornton’s International Business Report is a quarterly survey whose results are published annually. The report tracks the views of senior executives in privately held businesses among select economies over areas, such as optimism, investments in infrastructure, revenue expectations, exports and employment, among other factors.

The report covers 36 economies and more than 7,000 respondents.

P&A Grant Thornton is an entity wholly owned by Punongbayan & Araullo, a member-firm within Grant Thornton International Ltd.

Grant Thornton is a leading tax and advisory firm.

As published in Business Mirror on 04 January 2016