Agenda for next leader: Infra, public order, graft

By Luis Leoncio 

Local executives want President Aquino’s successor to focus on infrastructure, corruption, and peace and order to spur the country’s economic growth, according to the periodic survey of the Makati Business Club (MBC) that covered the first quarter. 

Observers promptly said the underlying message of the survey results is that the Aquino administration fell short of expectations raised when it started in June 2010 that it would eradicate corruption and restore peace and order. Another message is that infrastructure was sadly neglected during Mr. Aquino’s six years in power.

The Executive Outlook Survey of 71 heads of companies that are MBC members showed that 57.75 percent considered infrastructure as the priority of the next administration; 40.85 percent said corruption should be a priority, while 32.29 percent said the focus should be on peace and order.

The MBC survey also showed that poverty, job generation, agriculture, and education were the other notable issues that the next administration should address.

Heading into the 2016 elections, the survey showed that majority of MBC members have an “optimistic outlook” for the year, generally expecting the economy to exceed this year its 5.8-percent gross domestic product (GDP) growth in 2015 while projecting an increase in approved investments in 2016, compared with last year’s P106.6 billion.

Also, businessmen expect increases in both imports and exports this year, from last year’s P62.6 billion and P54 billion, respectively, according to the survey results.

Majority, or 52 percent, of the senior business executives polled also expect the country’s economic growth this year to be higher than last year’s GDP growth of 5.8 percent. Thirty-nine percent foresee that the 2015 GDP growth would be sustained, while 9 percent project a lower GDP growth for 2016.

On consumer prices, 51 percent expect the country’s headline inflation this year to be higher than last year’s average rate of 1.4 percent.

On the other hand, 41 percent expect inflation to level off at the same rate, while 8 percent project it to be lower in 2016.

On interest rates, 51 percent of the respondents foresee a lower 91-day Treasury bill rate than last year’s rate of 1.77 percent; 9 percent expect it to stay the same, while 40 percent expect to see it moving lower in 2016.

Majority of the respondents also expect the peso to depreciate against the US dollar by an average of 3.75 percent in 2016; last year’s year-end rate was P47.166 to the $1.

Eighteen percent expect the peso-dollar rate to stay the same as at the end of last year, while the remaining 9 percent expect the local currency to appreciate against the dollar by 10 percent.

On prospective investments for 2016, the survey showed that 54 percent anticipate approved investments to be higher than the P106.6 billion recorded by the Philippine Statistics Authority from January to September of last year.

Twenty-six percent of the respondents expect approved investments to remain the same, while 20 percent expect a decrease during the same period.

On trade, the outlook is also fairly optimistic. MBC members foresee an increase in both imports and exports, with 62 percent expecting higher import payments than last year’s. Thirty percent foresee it to stay on the same level and the remaining 8 percent expect imports to be lower this year. From January to September 2015, the country’s import bills reached $62.6 billion.

For exports, 38 percent expect higher exports in 2016, while another 38 percent expect it to stay the same and 24 percent foresee exports to be lower than last year.

The Philippine Statistics Authority recorded $54 billion in exports from January to September last year.

A positive outlook is also seen in terms of corporate performance for 2016, as majority of respondents project an increase in both gross revenues and net income in the coming year.

Eighty-two percent expect their gross revenues to be higher in 2016; 15 percent expect no change, and 3 percent expect revenues to be lower.

On the other hand, 74 percent of respondents also project higher net incomes in 2016, while 19 percent foresee no change and 7 percent expect lower net incomes.

On investments, 59 percent of the respondents said they will make additional investments in the coming year, with an average of P4.9 billion; the highest investments of over P1 billion are under the diversified, conglomerate and services sectors.

In terms of workforce, 49 percent of the respondents have plans on expanding their workforce.

Majority of these companies belong in the services sector. Forty-seven percent of the respondent companies expect to hold their workforce size steady, while only 4 percent foresee layoffs.

MBC said the survey was conducted among its members from February 2 to March 16. A total of 71 responses were recorded, representing 17.75 percent of MBC’s 400 member-companies, excluding foreign embassies and trade offices.

MBC said majority of the respondents are in top management or 87.32 percent.