[ Manila Bulletin Online ] January 15, 2009
By BERNIE CAHILES-MAGKILAT
Filipino business leaders expect turnover, exports and profitability to dip this year compared to 2008 as they brace for the full effects of the global financial crisis but Filipinos are still relatively optimistic compared to their neighboring countries, survey results said.
The results come from the Grant Thornton International Business Report (IBR) 2009, which was released by audit, tax and advisory firm Punongbayan & Araullo (P&A), a member firm within Grant Thornton.
The IBR surveyed over 7,200 privately held businesses (PHBs) on their expectations for six economic indicators: profitability, turnover, exports, selling prices, investment in new buildings, and investment in plant & machinery.
Across all indicators, local PHBs anticipate weaker increases for the coming year, with profitability showing the biggest drop - from a balance of +67 percent* in 2008 to +33 percent this year. Turnover expectations declined from +61 percent last year to +37 percent. Surprisingly, export expectations only dipped 14 percentage points: from +45 percent to +31 percent.
"While expectations across these economic indicators are down for Filipino business leaders, it is worth noting that we’re still relatively optimistic compared to our neighbors," said Greg Navarro, P&A managing partner and CEO,
Thailand, for example, reported a negative balance for turnover, profitability and exports for the second year in a row, Navarro said.
Singapore, Hong Kong, Mainland China and Malaysia all registered negative expectations for profitability this year.
Local PHBs surveyed in the IBR 2009 also expect fewer opportunities to raise selling prices, with only 39 percent reporting that they expect to increase prices in 2009 compared to 66 percent last year.
Thirty percent expect to invest more in new buildings (compared to 49 percent last year), while 36 percent expect to invest in plant and machinery (compared to 55 percent).
The local BPO industry reported late last year that it is on track to meet its full-year 2008 target of US.8 billion, and outsourcing firms are continuously hiring workers.
And while OFW remittances are expected to slow down this year, dollar remittances will still help fuel consumer spending, as the Bangko Sentral and government policies stimulate the market and encourage local banks to keep lending. So we’re weathering the storm.
"The garments and electronics sectors will definitely suffer as the economies of their major markets contract. But other sectors, like business process outsourcing, wellness, and other service industries are in a good position to remain resilient," Navarro said.
Garment companies based in economic zones retrenched workers late last year as demand dropped despite the anticipated holiday spending. Peninsula Fashion International Corp., the eighth biggest exporter in Clark Freeport, retrenched 400 workers, while Limech laid off 541 employees and closed its newest factory.(BCM)
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