SMEs optimistic of growth in Asia

Filipino small and medium enterprises (SMEs) are generally optimistic of growth in Asia, but only about a fourth of the sector believes that the Philippine economy will grow this year.

This was part of the findings of a representative survey conducted by United Parcel Service or UPS Philippines on SMEs.

A representative survey of 100 Filipino SME leaders by UPS showed that 75 percent of Filipino SMEs think that intra-Asia trade will grow this year, but only 25 percent of Filipino SME leaders are optimistic that the Philippine economy will grow in 2006.

Interestingly, while the Filipino SME leaders are not all optimistic of overall economic growth, 48 percent expect their individual business to improve while only 30 percent expect their business to remain the same and only seven per cent expect their business to become worse.

A key factor stunting growth for Filipino SMEs, the UPS survey showed is the lack of qualified staff and information technology (IT) adoption.

Likewise, supply chain efficiency, transportation, infrastructure and government are also deemed lacking by Filipino SME leaders.

According to Pirojshaw Sarkari, managing director of UPS Philippines, UPS conducted the representative survey to get a feel of the business sentiment of Filipino SMEs as well as other SMEs in the Asian region.

UPS, Sarkari explained, wants to assist Filipino SMEs to concentrate on their core business and rely on UPS to deal with their logistical needs.

UPS had earlier expressed it optimism of further growing its intra-Asia hub in the country depending on the growth of UPS’s Shanghai operations as well as securing an additional port in Nagoya, Japan.

This was expressed recently UPS official Steven R. Okun, vice president for public affairs of the Asia Pacific region.

According to Okun, UPS Philippines has already seen a tremendous growth in its operations in the last three years, so much so that UPS spent $1.4 million last year to upgrade the company’s facilities at the Clark Special Economic Zone.

Likewise, UPS’s flight frequencies to Clark has been increased to 120 flights weekly.

Furthermore, UPS is also upsizing its aircraft from the B737 to the MD 11 this season.

UPS, Okun said, is set to open its Shanghai global hub which would service the United States and Europe.

If its Shanghai operations does well, Okun assured, the Philippines would benefit from the increased activity.

Likewise, UPS is negotiating with Japan to expand its operations from Narita and Kansai to a third port in Nagoya.

Securing the Nagoya port, Okun said, would especially be beneficial for UPS’ Clark operations.

UPS currently employs about 200 people in Clark alone, but its total employes in the Philippines is 445 nationwide as UPS has feeder operations in Cebu, Laguna and Baguio.

However, Okun ruled out any immediate plans by UPS to engage in domestic services in the Philippines as there are already too many domestic logistics and delivery companies in the country.

UPS’s net global income last year amounted to $3.87 billion from revenues of $42. 6 billion.