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By Ben Arnold O. de Vera, Reporter
MANY privately held businesses expect 2009 to be worse than last
year, as they brace for the full effects of the global financial
crisis, according to Grant Thornton International Business Report
2009.
The report, released locally by Punongbayan
& Araullo, shows that most survey respondents from the
Philippines, while still positive, anticipate weaker growth this
year.
Fewer local companies expect good profits this
year, as a 33-percent balance among respondents see profitability
amid the slowdown, down from 67 percent of the respondents in the
2008 report.
More respondents also see sales slowing, with
those expecting growth down to 37 percent from 61 percent last year.
For exporters, the optimists dropped from 45 percent in last
year’s survey to 31 percent this year.
The so-called percentage “balance” is the
difference between the number of respondents who expect an increase
vis-à-vis those who expect a decrease in a certain survey
indicator.
The audit, tax and advisory firm noted that
export expectations dipped lower than other indicators.
“We expect certain sectors in the local export
industry to fare better than others. 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,” Greg Navarro, the firm’s CEO and
managing partner, said.
Many local businesses surveyed for the report as
well deem that this year would not be the best time to adjust
selling prices, as only 39 percent said they would probably raise
prices this year, compared with 66 percent last year. Only 30
percent expect to invest more in new buildings down from 49 percent
last year, and just 36 percent expect to invest in plant and
machinery compared with 55 percent in 2008.
Navarro, however, said that some bright spots
remain in the domestic economy. “The business process industry
reported late last year that it is on track to meet its full-year
2008 target of $6.8 billion, and outsourcing firms are continuously
hiring workers. And while overseas Filipino workers’ remittances
are expected to slow down this year, dollar remittances will still
help fuel consumer spending, as the Bangko Sentral ng Pilipinas and
government policies stimulate the market and encourage local banks
to keep lending,” he said.
“So we’re weathering the storm. Local
privately held businesses just need to focus on cost-cutting and
productivity improvements, take the slack time to train and re-train
both management and employees, so that they can emerge on the other
side of this crisis stronger, better trained, more innovative, more
competitive and more productive,” he said.
Despite the gloom, Filipino respondents were
more optimistic than most of their Asian counterparts, Navarro said.
“Thailand, for example, reported a negative balance for turnover,
profitability and exports for the second year in a row, while
Singapore, Hong Kong, China and Malaysia all registered negative
expectations for profitability this year,” he said.
About 7,200 privately held businesses in 36
countries participated in this year’s report. They were polled
about their expectations on the following economic indicators:
exports, investment in new buildings, investment in plant and
machinery, profitability, selling prices and turnover.
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