US businessmen upbeat on RP - survey

MANILA, Philippines - American businessmen in the Philippines said they are confident the strong growth of the local economy this year will boost their profits, a regional survey showed.

The ASEAN Business Outlook 2010 survey released by the American Chamber of Commerce in the Philippines (AmCham) showed that 86 percent of the respondents expect overall economic expansion in the Philippines.

The survey likewise showed that majority of the businesses see an increase in employment this year.

The survey results showed that none of the businessmen polled predict an economic contraction. In addition, respondents expressed a significantly more positive profit outlook in 2010.

For the companies, 76 percent said that they expect their earnings to grow next year, a higher percentage than the 72 percent recorded a year ago.

Probably linked in part to the expectations of profit increases among the majority, the largest percentage of respondents, or 51 percent, anticipated a workforce increase for the first time since 2008.

Results from the 2010 survey highlight more strengths than concerns in the Philippines, a fact that further demonstrates the increasingly positive outlook held by the respondents about their location of business, AmCham said.

Respondents are also mainly satisfied with the “availability of low cost labor” with 76 percent, “sentiment towards the US” with 70 percent, “availability of trained personnel” with 70 percent, “office lease costs” with 63 percent, and “housing costs” with 53 percent.

In addition, results showed there were only three major concerns among respondents in the Philippines. Corruption remains the leading concern, incurring an 84 percent dissatisfaction rate. Other concerns include infrastructure (46 percent) and tax structure (42 percent).

On the upside, respondents’ dissatisfaction with “stable government and political system” fell from a rate of 47 percent in 2009 to 37 percent in 2010, effectively removing the category from the list of major concerns.

Broadening to a larger view, respondents continue to see ASEAN as playing an increasingly important role in an improved world economy. The rate of respondents who feel that the world economy will perform better or much better in 2010 increased dramatically from 30 percent in 2009 to 74 percent in 2010.

In addition, the majority of respondents, or 67 percent, expect the importance of ASEAN to increase in terms of worldwide revenues to their companies in 2010, with 88 percent of respondents citing “economic recovery” as a reason behind the region’s more prominent role. Such data indicate a general feeling among many respondents that ASEAN may, in fact, emerge from the global financial crisis all the stronger, finding itself a new economic leader.

The excitement about the business prospects in the region becomes even more evident when regarding the rate of those planning to expand in ASEAN, which rose from 63 percent in 2009 to 75 percent in 2010.

Finally, data shows that the countries in ASEAN are making wise choices in their attempts to make the region even more attractive to businesses. The trade agreements prove advantageous to respondents in the Philippines, as 68 percent use the ASEAN Free Trade Agreement and 58 percent use the ASEAN-China agreement.

 Furthermore, the majority finds ASEAN integration valuable to doing business in the region.

In general, respondents in the Philippines view the local, regional and world economies with increasing levels of enthusiasm in 2010.