MANILA, Philippines — Business executives in the Philippines have the most optimistic outlook on the economy in the Southeast Asian region this year, the latest survey of Grant Thornton showed.
Grant Thornton’s International Business Report (IBR) showed optimism in the Philippine economy for this year was at net 66 percent, the highest in Southeast Asia.
This was followed by Indonesia at net 61 percent, and Vietnam and Malaysia both on the third spot at net 38 percent.
The report showed two-thirds of business executives surveyed in the Philippines are very optimistic about the local economy as they expect to generate more revenues, charge more for their products, and hire more employees.
In particular, 70 percent of business leaders in the Philippines expect revenues to rise this year.
Of the total respondents in the Philippines, 66 percent expect to increase the selling prices of their products and services, while more than half or 52 percent are planning to increase their exports.
The report also showed that 62 percent are looking to employ more people this year, while 65 percent would want to increase the salaries of their employees over the next 12 months.
Even as the general outlook for the Philippine economy remains very optimistic, the report showed businesses consider financial constraints as a significant external barrier to expanding overseas.
Grant Thornton gathered responses from 5,000 business leaders in 35 countries including the G20 for the report.
Globally, economic uncertainty has been identified by the business leaders as the biggest risk this year.
“While global financial markets are increasingly volatile, business leaders in the real economy remain optimistic because global GDP (gross domestic product) is forecast to continue growing and they know their business will grow with it. Despite increasing down side risk, economic fundamentals remain strong and opportunities exist,” Francesca Lagerberg, global leader at Grant Thornton International said.
While times of economic uncertainty has resulted in companies reducing or putting on hold investments traditionally, now is a time when investing in capabilities and infrastructure can pay dividends and so, when the economy turns, businesses can react with speed to take advantage.
“As the economic cycle cools, it’s clear that business globally won’t have it as good as they did in 2018. However, with the IMF (International Monetary Fund) predicting global economic growth of 3.7 percent, predictions of a recession are the exception rather than the rule. What we are seeing is a return to normality with more balanced and sustainable growth for economies,” Lagerberg said.
P&A Grant Thornton chairperson and chief executive officer Marivic Españo said a downturn is not seen on the horizon.
“Sentiment has more likely decreased owing to slower trend growth, subdued inflation and low macro volatility—a so-called ‘normalizing’ of the global economy,” she said.
As published in The Philippine Star, dated 28 January 2019