‘Business optimism highest in 11 years’

Business optimism for 2007 is the highest in 11 years as gains experienced in 2006 are expected to continue this year, a survey conducted by the Makati Business Club (MBC) showed.

The MBC Executive Outlook Survey showed that 81 percent of the respondents believe economic growth in 2007 will be higher than the 5.4 percent recorded in 2006. This percentage of optimism was exceeded only in July 1996, when 93.9 percent of respondents believed economic growth would be higher in 1996 compared to 1995.

Of the 663 members, only 62 responded, representing 9.4 percent of MBC’s total membership.

The survey, which was conducted from late January to early February, stated that the optimism extended to firms. A majority of the companies or 87.1 percent believed they would post higher gross revenue when compared to 2006, while 64.5 percent said net income would be better this year.

The MBC survey likewise showed more companies would expand their operations this year by hiring more people.

MBC credits the positive view to the gains experienced by businessmen in 2006, during which most companies felt an increase in their revenues.

According to the businessmen who participated in the survey, developments in the economic front, including a healthier fiscal position, stronger peso, lower inflation and lending rates, and growing investor confidence are some of the biggest improvements felt last year.

Looking forward, the businessmen said they should use the gains felt last year to improve infrastructure and fight graft and corruption. The lack of infrastructure and red tape are main reasons why investors are hesitant to infuse money in the country.

The businessmen said President Arroyo should address the peace and order situation, poverty alleviation and the extra-judicial killings.

The business community also urged the government to make the May national elections clean and honest. Of the senatorial candidates, the businessmen said they want to see Manuel Villar Jr., Francis Pangilinan, Francis Escudero, Joker Arroyo and Ralph Recto elected to office.

Aside from this, they want to see the passage of measures to benefit the business climate. The most important bills Congress should pass into law are the national budget, the anti-terrorism bill, investment incentives, renewable energy bill and the anti-political dynasty bill.

Other expectations were lower inflation for the year. Of the respondents, 61.3 percent felt that the rate at which prices of basic goods will change will be lower this year.

As in the past several surveys, respondents ranked the Bangko Sentral ng Pilipinas and the Department of Finance as the best-performing among 37 government agencies in 2006.

The Supreme Court ranking jumped from the eighth slot to the third, while the Securities and Exchange Commission dropped to number four from number three the previous year. Completing the top five is the Tourism department, which retained the same ranking.

The Departments of Local Government, Justice, and Foreign Affairs were the biggest losers in terms of performance.

The Executive Outlook Survey was conducted during the period between Jan. 22- Feb. 15, 2007.