MANILA - Filipinos are the second most optimistic businessmen in the world despite expectations of tepid sales and less hiring in the coming quarter, the latest Grant Thornton International Business Report shows.
The report, released by Punongbayan & Araullo, has the Philippines scoring 90 percent, just behind Peru, which scored 96 percent, and at par with Chile.
Last quarter, the Philippines was at the fourth spot, behind Peru, Brazil and the United Arab Emirates.
"The Philippines’ eight-point bump in optimism from the previous quarter comes despite tepid expectations for key economic indicators, such as profitability and revenue," the report said.
For the second quarter, a balance of 40 percent of local respondents expressed expectations of increased profitability, same as last quarter.
When it comes to expectations for revenue improvement, however, the balance dropped from last quarter’s 48 percent to 44 percent.
But the proportion of businesses expecting to hike prices jumped to 30 percent from last quarter’s 14 percent.
“The drop in revenue expectations could be due to businesses expecting a reduction in sales volumes as a result of price increases,” said Marivic Españo, P&A chair and chief executive officer.
"Costs attendant to doing business, such as oil prices for example, which were on the high end at the start of the second quarter, are normally passed on to consumers, so business leaders are naturally looking at a drop in volume sales," she added.
Another noticeable trend is the drop in employment expectations. Last quarter, a balance of 42 percent of businesses expected to add to their personnel number. That proportion already went down to 28 percent this quarter.
"But on the bright side, Filipinos who are already employed can expect to be aptly compensated for the next 12 months," the report added.
An "overwhelming" majority of the respondents, or about 80 percent, plan to increase salaries either in line with inflation or by more than inflation and none of the businesses intend to reduce pay.
“You expect business leaders to adjust where they can considering the new realities of their operations. Unfortunately, this quarter that adjustment involves holding off on hiring more people and instead focusing on coming up with competitive pay packages for their existing team,” Espano said.
Asked about their business constraints, 32 percent of Filipino business leaders cite information and communications technology as a major roadblock to their growth.
Shortage of long-term finance and of working capital also rose as major constraints - from 6 percent last quarter to 18 percent, and from 12 percent last quarter to 22 percent, respectively.
The study, which was conducted around the time when Chief Justice Renato Corona’s impeachment trial was winding up, also asked respondents if the tension between the judiciary and executive branches of government had any impact on their business.
The survey showed 84 percent of local business leaders said it had no impact, up from last quarter’s 78 percent.
source: interaksyon.com
