Business leaders optimistic on sustained Phl growth

MANILA, Philippines - Filipino business leaders are optimistic that the Philippine economy will continue to grow in the next 12 months, the latest survey results from the Grant Thornton International Business Report said.

The survey released by Punongbayan & Araullo (P&A), the Philippine member firm of Grant Thornton, showed that some 90 percent of local respondents have bright expectations about the economy, up 18 percentage points from the last quarter of 2012.

With these results, the survey said: “This makes the Philippines only the second most optimistic country in the survey, behind Peru, which has an optimism balance of 98 percent.”

However, the survey showed an alarming gap in the Philippines between businesses’ hiring appetite and the depth of the local talent pool.

“An increasing number of Filipino business leaders are citing a lack of availability of skilled workforce as a business constraint: 46 percent of local respondents consider it a roadblock to growth, a steady climb from just 20 percent in the first quarter of 2012. And yet the same proportion of respondents – 46 percent – say they have plans to hire new people in the next 12 months,” the survey said.

A proportion of Filipino business leaders cited transport infrastructure as a business constraint: from 20 percent in the last quarter of 2012 to 42 percent.

On the plus side, expectations for profitability and revenue are both up 10 percentage points: 74 percent and 76 percent.

The survey also showed global optimism at its highest level since early 2011: from a balance of four percent last quarter, global optimism is now at 27 percent; it stood at 34 percent in the first quarter of 2011.

It noted optimism in both countries showed marked improvement this quarter compared to the last quarter of 2012: from -4 percent to 31 percent for the US; and from -70 percent to -2 percent for perennial pessimist Japan.

More importantly, mature markets are showing signs of willingness to invest.

In the European Union, 44 percent of business leaders now plan to increase investment in plant and machinery in the coming year, up from 26 percent three months ago.

Businesses in the G7 (34 percent, up 7 percentage points), North America (33 percent, up 5) and the PIGS economies (42 percent, up 27) all report a strong rise in investment expectations.

Grant Thornton is a leading organization of independent assurance, tax and advisory firms.