Saturday, January 20, 2007 RP joins India, China to lead global confidence - study
MEDIUM to large businesses around the world are optimistic about prospects for their economies this year, according to initial findings from the International Business Report (IBR) of Grant Thornton International.
It said medium to large privately held businesses around the world have an optimism and pessimism balance percentage of 45 percent, up from 39 percent last year.
The survey, which covers the opinions of 7,200 business leaders in 32 countries, was released by leading accounting and tax advisory firm Punongbayan and Araullo (P&A), the Philippine member firm of Grant Thornton International.
Asian business owners continue to be the most confident in the world, with India, the Philippines, mainland China and Singapore taking the top four positions in the survey.
India’s position at the top of the optimism/pessimism league table has strengthened to an unprecedented 97 percent, up from 93 percent in 2006.
Japan’s figures reflect a steady economic recovery over the past five years from an optimism/pessimism balance of negative 71 percent in 2003 to just negative five percent in 2007.
Based on trend data, optimism in the Philippines has been on a steady climb.
In 2004, when the Philippines first participated in IBR (then called International Business Owners Survey), business owners were slightly pessimistic, with a balance of negative one percent.
Surge
The result was attributed partly to the country’s flagging electronics sector, which was affected by the global economic slowdown.
The following year, local business owners reported a remarkable surge in confidence in the economy, posting a positive 50 percent balance—even higher than the global average of 41 percent.
Although the country’s growth was modest compared to its Asian neighbors, its gross domestic product growth for the three years leading up to 2005 saw perceptible acceleration, as it approached five percent per year.
In the more current survey, optimism among local business owners rose even more, landing the country in the top five most optimistic countries, along with India and mainland China.
The country’s strong light industries and services sectors were cited as significant factors behind the confident outlook.
The Philippine stock market index also experienced an upsurge of almost 40 percent in 2006, outperforming all key Asian bourses except Jakarta. This upward climb is expected to continue well into 2007, as the country once again shares the upper tier of extremely optimistic countries with India and mainland China.
Best position
According to Tony Herbosa, principal for corporate finance for P&A, the dominance of China, India and the Philippines in the optimism survey is indicative of the countries that are best positioned to be competitive in the face of increasing globalization.
As early as 2005, in a roadshow called “Philippines in Transition: New Business Models,” Herbosa had already outlined the roles this triumvirate economies would play in the global market.
“I restated Peter Drucker’s prediction before his demise: that China will be the `brawns’ of Asia and that India will be the `brains,’ with its lock on high-end outsourcing and programming,” he said.
“I see the Philippines as positioned to be the `heart’ of Asia, with strengths in EQ(emotional quotient)-driven services, hence our exportation of caregivers, teachers, artists and chefs. This is also why we are now in a good position to market ourselves to medical tourists and retirees.”
“Although the exportation of labor in the global market was initially difficult, since we had to position away from manufacturing, it is our natural niche.
And the remittances from our overseas workers are fuelling growth in light industries, schools, business process outsourcing and call centers, basic services, affordable consumption (sachets) and, lately, mid-level or affordable properties,” said Herbosa. (PR)
