MBC survey shows high optimism this year

Majority of top local executives expect the economy to further strengthen this year and even exceed last year’s 6.8 percent growth rate, results of the Makati Business Club (MBC) First Semester Executive Outlook Survey for 2017 showed. 

MBC members expressed a highly optimistic outlook for the Philippine economy despite anticipating an increase in inflation and interest rates this year, coupled with a critical outlook on trade.

The MBC survey received responses from 76 out of its 380 or 20 percent of its corporate members with majority of the responses received from senior executives and top management representatives. Only 17 percent of respondents in the MBC survey project a lower economic growth rate.

On consumer prices, a high majority or 85 percent expect inflation this year to climb higher than last year’s average rate of 1.8 percent, while 12 percent expect inflation to stay at the same rate, while three percent project it to be lower than 2016.

On interest rates, 57 percent of the respondents foresee a higher rate than last year’s average of 1.5 percent per annum while 39 percent foresee interest rates to remain constant while four percent expects a lower rate.

On the peso strength, 80 percent expect the peso to depreciate against the US dollar by an average of 5.16 percent by the end of this year from the 49.82 per dollar rate last year while 11 percent expect the peso-dollar rate to stay the same by year’s end and a nine percent expect the local currency to strengthen slightly against the dollar.

On investments for this year, 29 percent of respondents remain positive expecting an increase while 24 percent foresee the same level of approved investments this year.

Another 47 percent anticipate approved investments this year to be lower than the P89.4 billion recorded by the government’s Philippine Statistics Authority (PSA) last year.

On trade, the general outlook is slightly pessimistic, as a significant number of MBC members project a decrease in both imports and exports.

Some 53 percent of respondents expect exports either to increase (29 percent) or stay at the same level (24 percent) as last year’s figure, while close to half (47 percent) expect exports receipts to be lower.

The government reported the value of exports totaled $51.36 billion in the first 11 months or from January to November.

For imports, 64 percent said they expect lower imports than last year’s $73.72 billion, while 24 percent expect it to stay the same and 12 percent are fairly optimistic that imports will be higher than last year.

Positive corporate climate The survey showed a positive outlook remains in terms of corporate performance for 2017, with a large majority of respondents projecting an increase in both gross revenues and net income in the coming year.

About 93 pecent expect higher or the same level of gross revenues this year compared to last year, and only seven percent expect their gross revenues to be lower than 2016.

Similarly, 74 percent of respondents also project higher net incomes in 2017, while 14 percent foresee no change, and only 12 percent expect lower net incomes this year.

On investments for 2017, the projection remains bright with 74 percent of the respondents saying they will make additional investments in the coming year, with an average of P785 million; the highest projected investments of over P1 billion are under the diversified or conglomerate and the services sector.

In terms of workforce, 51 percent of respondents plan on expanding their workforce with majority of MBC member companies in the sevices sector planning to hire more workers.

LUIS LEONCIO