PHILIPPINE STAR - January 6, 2008

Businessmen upbeat on economy this year - survey

Businessmen in the Philippines were ranked most optimistic on economic prospects this year, according to a global survey conducted by a leading auditing and financial advisory group.

Based on latest results of the International Business Report (IBR) survey made by American-British auditing firm Grant Thornton, Filipino businessmen appeared most optimistic compared with their counterparts in other countries in terms of business and economic opportunities.

The IBR showed the Philippines, along with India, topping the 34-country survey on optimism over the next twelve months with a 95 percent rate.

Trend data from the IBR further indicated that the Philippines has been making a consistent and noticeable upward climb in the optimism scale, finally topping the charts for the first time in five years.

"This is a good validation of the efforts at fiscal discipline and enhancing the country's appeal to investors," said Greg Navarro, managing partner and CEO of Punongbayan & Araullo, the local partner firm of Grant Thornton.

He said after years of uneven growth, the country is finally standing on more solid ground.

"We just have to stay focused, and keep doing the work needed now to make sure these 'wins' turn into long-term gains," he added.

In the third quarter of last year, the economy grew 6.6 percent, prompting analysts to say that a higher-than-target full year expansion of seven percent is likely.

The growth was fuelled by the expanding industry and services sector. In fact, the services sector contributed almost half of gross domestic product (GDP) as the business process outsourcing (BPO) industry continues to flourish.

"The Philippines has been a popular offshoring destination for some time now, and as a result, we're seeing an evolution of the local BPO industry: where it used to be all about call centers and IT services, the industry is now expanding to other, more high-skill activities like design engineering, animation, and financial analysis," Navarro said.

"This is definitely a big vote of confidence for our local talent and a good sign of things to come."

Likewise, foreign investors have been eyeing the mining industry. For the second quarter of last year, mining posted the fastest growth among 11 main industry sectors at 33.3 percent, and is poised to continue its robust growth as new entrants begin commercial operations.

These foreign investments, along with billions in dollars of OFW remittances that come in every month, have helped strengthen the peso, which closed 2007 as one of the best performing currencies in Asia.

Aside from the Philippines and India, other countries with highly optimistic businessmen are Vietnam (87 percent), Singapore (84 percent), Hong Kong (82 percent) and Poland (78 percent).

At the bottom of the list, on the other hand, are Japan with negative 44 percent, Thailand (-30 percent), Taiwan (-9 percent), Italy ( 0 percent) and Spain (one percent).