Philippine businessmen most optimistic in Asia Pacific in Q2

MANILA, Philippines – The Philippines posted the highest mark in overall business optimism across 36 Asia Pacific economies in the second quarter of the year, results of a quarterly global business survey showed.

The Grant Thornton International Business Report (IBR) revealed yesterday overall business optimism in the country surged 38 points to 94 percent during the April to June 2016 period, way above Asia Pacific’s average business optimism of 28 percent.

However, the report said such bullishness may contract in the coming months with UK’s decision to leave the European Union (EU) and possible implications of the country’s arbitration saga with China.

Aside from overall business optimism, Philippine firms are also among those which expect exports to increase over the coming year.

The business outlook for exports in the Philippines rose to 20 percent from 18 percent the previous quarter.

Other economies that registered increases were Thailand (from six percent to 16 percent) and Japan (from one percent to 12 percent).

Business outlook for exports in countries such as Australia, Singapore, New Zealand and Malaysia, meanwhile, recorded declines during the quarter.

“As the world becomes more interconnected, exports becomes an important source of growth for large parts of the Asia Pacific business community. This is why it is good to note that despite a global backdrop of economic, social and political uncertainty, for large parts of the community, plans to export more are increasing,” P&A Grant Thornton chairperson and CEO Marivic Españo said.

Grant Thornton International, however, said the IBR was measured before the UK voted to exit the EU.

“Although the UK’s decision to leave the European Union may not directly impact many businesses across Asia Pacific, it could do so indirectly – for example, if markets continue to be volatile as a result of the decision,” Españo said.

“When thinking about the threats and opportunities that a Brexit could create, and planning how to create and protect value, it may be worth considering any short, medium and long term implications for issues like people and talent, exports and imports, strategic ambitions, financing, risk, operations and protecting investment. This will also help guard against unexpected shocks which could derail long-term growth prospect,” she added.

Aside from Brexit, another big factor expected to affect business optimism in the Philippines in the coming months is the turnout of the country’s ongoing territorial dispute with China.

So far, however, Tuesday’s ruling in favor of the Philippines in its arbitration case against China, over the South China Sea is seen as a big boost for the country’s morale which, in turn, could help drive up further optimism, businessmen said.

“It’s going to be a wait and see situation, it’s like Brexit in EU. When the decision was made, everybody was at a lost, wondering what will take place. Same thing here, give it some time, both sides are willing to sit down and negotiate but with that decision, China has to look at us as equals, with mutual respect and discuss how both can come out with a win-win scenario,” Philippine Chamber of Commerce and Industry president George Barcelon said.

“In the meantime, there would be a bit of anxiety because from what I read in the paper, China does not accept the decision. So that is one issue for the UN to put some teeth to that decision. I think (China’s) reaction now is they are not recognizing the UN decision. There is nothing derogatory about the Philippines. There was nothing against our country, it’s against the decision which they do not recognize,” Barcelon added.