Companies less bullish on Phl – poll

MANILA, Philippines - Philippine companies are now less bullish about the country’s economy than in the previous quarter, according to a ThomsonReuters/INSEAD survey.

In the report, Philippine business sentiment fell to 83 from 100, but with eight of 12 respondents showing a positive outlook.

Five respondents reported higher employment levels and new order and sales continued to show positive levels, with 11 companies reporting increases.

The country’s GDP grew by 6.4 percent in the second quarter of the year, faster than the 5.6 percent in the first three months of 2014, but slower than the 7.9 percent in the
second quarter of 2013.

The unemployment rate in July 2014 hardly grew, registering a 0.6-percentage point decline to 6.7 percent from 7.3 percent in July 2013.

Underemployment went down to 18.3 percent in July this year from 19.2 percent in the same period last year.

Business sentiment in other Asian countries also declined, based on the survey.

Asia Business Sentiment Index fell to 66 in the third quarter from 74 in the previous quarter, its steepest decline in three years.

A reading above 50 indicates an overall positive outlook.

HSBC Asian economic research co-head Frederic Neumann was quoted by Reuters as saying that “while growth is still robust across Asia, businesses are grappling with a number of challenges, including worries about rising interest rates as the Fed begins to press the brakes.”

Meanwhile, the report said that Indian firms were the most positive, with a maximum score of 100 for the second consecutive quarter after pro-business leader Narendra Modi was elected prime minister.

In contrast, Taiwanese businesses were the most negative, with a score of 33.

“Chinese companies polled were neutral about their prospects, which led China’s score in the third quarter to drop to 50 from 67. China’s economy is expected to grow 7.3 percent this year, its weakest pace in 24 years,” a Reuters report said.

Singapore also turned in a third-quarter reading of 50, a sharp drop from the previous quarter’s score of 67.

Politics also helped businesses in Indonesia, Southeast Asia’s largest economy, to achieve an overall positive score of 75 in the third quarter. Indonesians recently elected President Joko Widodo, who is believed to be more business friendly than his predecessor.