MANILA – In the Philippines, overall optimism among business leaders remains high. New findings from Grant Thornton’s quarterly business survey of 2,500 businesses in 36 economies, the International Business Report (IBR), reveal that the optimism level is placed at an average of 86%, which is higher than the global average of 58%.
The survey also showed that 52% of Filipino business owners are very optimistic about the outlook of the local economy over the next 12 months. Local businesses are seeing an increase in employment and plan to improve salesforce effectiveness, as well as develop and launch new products or services.
Marivic Españo, chairperson and chief executive officer of P&A Grant Thornton, commented: “The results of the survey show that businesses are very confident about 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.”
Optimism among business leaders in Asia Pacific has leapt 17pp over the past year to an historic high of 58%. The high levels of confidence are driven particularly by surges in China and Japan, where optimism has risen by 21pp and 29pp, respectively, over the same period. Expectations over revenue (67%) and profitability (47%) have also reached record highs for the region.
Notably, for the first time in nearly three years, Japanese optimism has entered positive territory at 3%—a 17pp rise over just three months. Strong exports are contributing to a more confident outlook, up 11pp to 12% compared to a year ago, and underpin an expanding economy, which is enjoying its seventh consecutive quarter of growth. A revival in exports is taking place across the Asia Pacific region, up 10pp to 22% compared to a year ago, driven by recovering demand for cars and manufacturing equipment, particularly in China, where optimism has reached 78%. Despite the Philippines’ increase in economic uncertainty from 22% to 28%, profitability also increased from 70% last Q3 to 86% in Q4.
Where businesses in other parts of the world are scaling back their investment, those in Asia Pacific are planning to spend more on research and development, up 10pp to 39% compared to a year ago, as well as plant and machinery, up 9pp to 33%. China is particularly focused on these elements of longer-term growth, with 58% of businesses expecting to invest in research and development compared to a global average of 25%.
Españo added: “Confidence has boomed in Asia Pacific, reaching its highest peak in the history of the IBR. 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. As global trade improves, firms in Japan and China are also thinking about the future and investing in their long-term growth.
This positive business sentiment in the region is an opportunity that Philippines businesses must consider as they plan for their long-term expansion and growth plans outside the Philippines.”
As published in Mindanao Times, dated 09 January 2018