MANILA, Philippines - Local industries may find it hard to expand their businesses this year because of lack of skilled workers, high cost of finance and reduced demand, according to a report by Grant Thornton International Business Report (IBR) released by tax and business advisory firm Punongbayan & Araullo (P&A).
The report said 63 percent of Filipino business leaders cited these reasons as a major roadblock to expansion, compared to 58 percent last year.
Privately held businesses face a big challenge in staying competitive during these uncertain times. And part of overcoming that challenge is operating with the mindset that all this shall also come to pass. We just need to weather the storm and emerge wiser, faster and more innovative,” Greg Navarro, managing partner and CEO of P&A said.
“Business leaders have to be proactive by paying close attention to their operations, looking at where they can plug leaks or make savings. They have to study the specific issues affecting their business and develop strategies that will allow them to respond quickly to transformative changes in the market place,” Navarro added.
The report stated that 61 percent of the privately held businesses (PHBs) surveyed named cost of finance as the second biggest roadblock to expansion. This was followed by shortage of orders.
Chipmaker Intel Corp. was forced to close its Cavite factory, which produced $5 billion worth of exports, due to a dramatic drop in demand for products such as personal computers and mobile internet devices. In the Cordillera region, nearly 2,000 miners have either lost their jobs or started working fewer hours as mining companies take on cost-cutting measures.
“PHBs in various markets have been affected differently by the economic downturn, but clearly, no one is immune from this slowdown,” he explained further.
In fact, even industry giants like Philippine Long Distance Telephone Co. (PLDT) and Ayala Land, Inc. have announced plans to cut capital spending for 2009 in response to the deepening global downturn.
“But in spite of the increasing number of workers becoming unemployed, companies still continue to complain about lack of skilled manpower. This is true particularly in the BPO industry, where the hiring rate is still around four percent to six percent of applicants, and in the construction industry, which is always in demand for highly-skilled welders and electro-mechanical workers,” Navarro said.