Optimism of business leaders in the Philippines rose to a record level in the first quarter, placing them the second most optimistic in the world next only to Indonesia.
The Grant Thornton International Business Report (IBR) shows optimism in the Philippines rose to 98 percent, up 18 percentage points from 80 percent in the fourth quarter in 2016 and the highest level since the report was released in 2003.
The findings of the recent quarterly survey covered 2,400 businesses in 36 economies reflect overall global sentiments.
“Brighter prospects for 2017 have replaced the tough times of recent years, during which optimism sank to a four-year low of 20 percent in the third quarter of 2015. Globally, the research finds that business optimism is at its highest level on record at 49 percent.
Philippine business’ general sentiment is reflected in their expectations on revenues, profits and investments.
A great majority, 76 percent, expect revenues to be higher compared to just 58 percent in the previous quarter. A greater proportion of 84 percent expect higher profits from 72 percent in the fourth quarter.
Half of the respondents are investing in new buildings from just 36 percent in the previous quarter while 56 percent are investing in plant and equipment, slightly above the previous quarter’s 54 percent.
Business leaders across the Asia Pacific region are at their most confident in nearly two years, with optimism rising from 30 percent to 39 percent in the last three months alone.
The IBR reveals both the emerging and developed Asia-Pacific economies are feeling more positive about the future.
In the first quarter, business optimism has risen among emerging economies by 4 percentage points to 57 percent and among developed economies by 16 percentage points to zero.
However, although optimism in developed Asia-Pacific economies has entered neutral territory for the first time in over a year, the findings show business fundamentals are moving in the opposite direction. Expectations for revenue and profitability have dropped from 40 percent to 30 percent, and from 23 percent to 15 percent, respectively.
Meanwhile, the number of firms expecting to invest in plant and machinery has fallen 10 percentage points to 13 percent.
By comparison, the emerging Asia-Pacific economies are expecting both revenue and profitability to rise, from 51 percent to 55 percent, and 39 percent to 42 percent, respectively. They also anticipate more investment in plant and machinery, up 5 percentage points to 28 percent.
“We’ve witnessed a split between the developed and emerging Asia-Pacific regions for some time now, so it’s encouraging to see the region’s developed economies experience a positive swing in the pendulum. With confirmation of a US withdrawal from the Trans-Pacific Partnership, at least businesses can now begin to manage the fall-out. Many will be looking to see how trade relations with the US pan out in future and, in the meantime, the corridor to China for exports looks positive as its economy continues to recover,” said Marivic Espano, chairperson and chief executive officer of P&A Grant Thornton.
As published in Malaya, dated on 12 April 2017