Most small and medium enterprises in the Philippines are upbeat on domestic business prospects, resulting in a potential expansion in capital spending and hiring of more employees, according to separate survey results released yesterday by two multinational firms.
The annual Asia Business Monitor study of international logistics firm UPS showed that the country’s SMEs were the most optimistic among their peers in the Asia-Pacific region.
Similarly, the semi-annual small business confidence monitor of British banking giant HSBC showed a “healthy” level of optimism among Philippine SMEs, even though local traders were reported to be more “guarded” compared to other Asian emerging markets, bank senior vice president Junie Veloso said in a briefing yesterday.
The UPS study said that the upbeat sentiment among approximately 85 percent of local SME leaders—who predicted more opportunities for themselves in 2010 compare to last year—was possibly “driven by the Philippine election optimism.”
“We are glad that Philippine SMEs continue to be positive about their business prospects,” UPS Philippines managing director Tim Gohoc said. “They showed remarkable resilience last year when they maintained their optimism amid the global economic downturn and, from this year’s findings, they are maintaining the same bullishness.”
Philippine SMEs edged out their Indian peers, who had an 82-percent confidence level for this year’s prospects, followed by those in Taiwan and China, which both had a 76-percent confidence level.
Thai and Korean SME businessmen were the least bullish, with confidence levels of only 59 and 53 percent, respectively.
On the other hand, the Philippines debuted with a respectable score of 115 on HSBC’s newly created SME confidence index, coming in only slightly behind economic powerhouse India (121).
The country that led the pack in the HSBC SME survey was Vietnam with an index of 164. It was followed by Singapore (136) and China (123). Taiwan’s index climbed from 97 to 103, placing it back to positive territory for the first time since the financial crisis.
An index score of over 100 suggests a positive view while anything below 100 reflects the opposite.
The survey revealed that 40 percent of Philippine SMEs plan to increase their capital expenditure in the next six months. On job creation, 27 percent of SMEs plan to expand their workforce, while 66 percent may maintain their existing staff count. This leaves only 7 percent of companies likely to lay off employees.
The HSBC survey, which covered about 300 local SMEs—defined as those with annual sales turnover of P500 million and below—was conducted between April and June 2010. Some 6,300 respondents from 21 markets worldwide were polled. The UPS version was conducted among 1,350 respondents from 13 Asia-Pacific nations.
(Story by Doris Dumlao, Daxim Lucas of Philippine Daily Inquirer)
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