Manila—The Philippines has the fourth “most optimistic” community of business leaders in the world as strides taken in easing the cost of doing business have likely negated other concerns such as the tension between the Executive and Judicial branches of government.
This is based on the Grant Thornton International Business Report (IBR) for the first quarter of 2012, which ranked the Philippines high in its optimism league table, behind Peru, Brazil and the United Arab Emirates.
According to the survey results released yesterday by Grant Thornton’s local audit, tax and advisory firm Punongbayan & Araullo (P&A), 82 percent of Filipino respondents were upbeat about the next 12 months. Peru, Brazil and the UAE had a confidence index of 90 percent, 86 percent and 84 percent, respectively.
Following the Philippines in the global ranking of territories with optimistic business leaders were: Georgia (78 percent), India (74 percent), Chile (68 percent), Germany (64 percent) and Mexico (62 percent).
The Philippines ranked higher than the likes of the United States (46 percent), China (23 percent), Thailand (8 percent) and Singapore (2 percent). Greece and Japan had more pessimists than optimists as their respective indices for the period stood at -52 percent and -53 percent, respectively.
“The Philippines has done a good job of staying resilient despite the economic volatility around the world,” P&A managing partner Marivic Españo said in a press statement.
“Now that the global mood has also picked up, particularly among more mature economies, and the government seems determined to make up for its underspending last year, I think we’re on track to maintaining this upbeat outlook,” she said.
The IBR said this rosy outlook belied the respondents’ expectations when it came to specific economic indicators. Asked about their revenue prospects, only 48 percent of Filipino business leaders said they expected an improvement, down 12 percentage points from the previous quarter. The respondents also mostly doubted their ability to hike prices as a balance of 14 percent expected to increase their selling prices, sharply lower than the 46 percent level in the previous quarter’s survey.
Respondents were also asked about roadblocks to their business growth. Regulations and red tape, which in the past had consistently emerged as the top obstacle for Filipino business leaders, have become less of a hindrance in the first quarter of 2012: 22 percent of local respondents reported it as a business constraint, compared to 32 percent in the previous quarter, the report said.
“Bureaucracy has long been a cause for concern for businesses in the Philippines. So while it’s good to note that fewer respondents are hampered by it, it bears to mention that it still emerged as the top constraint, along with information and telecommunications infrastructure,” Españo pointed out.
“Perhaps some business leaders are starting to feel the effects of the government’s drive to improve the ease of doing business in the country. The Department of Trade and Industry’s Philippine Business Registration work station is a good start. But we’ll see what other concerned government agencies will contribute to this effort,” added Españo.
One thing that isn’t affecting local businesses is the ongoing tension between the Executive and Judiciary branches of the government. Asked if the strained relations between the two have any impact on their businesses, 78 percent of respondents said no; 20 percent acknowledged it was affecting their business, while 2 percent were.
The IBR, which began as an annual survey of business sentiment, started doing quarterly polls on economic confidence during the last quarter of 2010. Since then, confidence in the Philippines has been fluctuating, but has consistently outpaced optimism globally and in the Southeast Asian region. /INQUIRER