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Philippine Business Magazine: Volume 9 No.
3 - News & Updates
2nd Quarter Business Outlook
Bright Expectations
The second quarter promises to be a stronger period for the economy,
if the results of the Business Expectations Survey (BES) were to be
consulted. The survey was conducted in March and April 2002 by the
Bangko Sentral ng Pilipinas.
Using a Diffusion Index that measures the percentage share of firms
that have an “improving” outlook less the percentage of
firms that have a “deteriorating” outlook, the second quarter
of 2002 showed that respondents with improving outlook outnumbered
those on the negative side. The respondents cited the recovery in
global demand and the generally stable political and macroeconomic
environment as reasons for the upbeat business sentiment.
The same reading of businessmen applies for the third quarter of 2002,
with even a higher Diffusion Index.
The Bangko Sentral began the BES in the second quarter of 2001. The
survey uses the harmonized set of core questions for Asian countries
suggested by the Asian Development Bank. The survey covers 12 major
industry groups with firms drawn from the top 3000 corporations in
Metro Manila as listed by the Securities and Exchange Commission.
The second quarter 2002 survey had 236 respondent firms.
| Signals |
Vehicle sales in May increased by 26.6% to 7,363 units
from 5,818 units a year ago. The Chamber of Automotive
Manufacturers of the Philippines, Inc. attributes the
record performance to the good showing of the CR-V model
of Honda Car Philippines. The CR-V was re-categorized
as an Asian Utility Vehicle from a Sport Utility Vehicle.
The change in categories translated into a lowering
of tax rates and eventually to lower selling prices.
CR-V sales reached 713 units in May alone, followed
by sales of 631 units of Toyota’s Revo, the most
popular AUV model before the CR-V’s conversion
to AUV.
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| Gross
international reserves remained at US$17.1 billion in
end-May, generally unchanged from its end-April level.
The Bangko Sentral ng Pilipinas explains that this level
of reserves can cover 5.6 months worth of imports of goods
and payment of services and income. The amount is 3.2
times the level of the country’s short-term external
debt based on original maturity or 1.5 times the level
of the country’s short-term external obligations
based on residual maturity. The level of net international
reserves stood at US$13.7 billion in end-May. In May 2001,
the level of gross international reserves was lower at
US$14.4 billion. |
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 Projects
approved by the Board of Investments and the Philippine
Economic Zone Authority declined 65.8% in the January-April
period to only P15.1 billion from P44.3 billion a year
ago. Despite a lower investment level, the number of jobs
to be generated is 4.7% more than last year’s, given
more labor-intensive projects. According to the Department
of Trade and Industry, a new job can be created for every
P542,593 invested. In 2001, it took P1.66 million worth
of project costs to generate an employment opportunity.
ICT projects generate a job for every investment of P177,506.
For April alone, however, BOI-approved investments surged
583% to P5.4 billion from P800-million investments approved
in April 2001. |
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| The
fiscal deficit widened 195.5% to P83.0 billion in end-April
2002 from P28.1 billion a year ago. Government revenue
collections fell 3.6% to P180.1 billion from P187.4 billion.
The Bureau of Internal Revenue collected only P129.1 billion,
6.9% lower than its P138.7 billion performance a year
ago. The poor performance of the BIR is attributed to
weak income levels, in turn a result of weak domestic
demand and low interest and inflation rates. For its part,
the Bureau of Customs collected P29.1 billion, a 1.2%
gain over the P28.7 billion record in 2001. The budget
department’s frontloading strategy to settle payables
to government contractors led to a 22.4% increase in government
spending to P263.7 billion from P215.5 billion. |
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| FIVE
FACTS |
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Why you should invest in IT in the
Philippines
1. A META Group research survey led by Dr. Howard A.
Rubin of Hunter College in New York City shows the Philippines
topped Australia, the U.S., India and all other countries
surveyed in availability of qualified engineers, skilled IT
workers, and competent senior managers, as well as in net
enrollment in higher-education institutions for persons aged
17 to 34
2. Every year, some 350,000 university graduates –
a good number of them engineers, accountants, marketing professionals
and IT specialists – join the workforce
3. Close to 100,000 students enroll in IT courses yearly
in 643 IT schools
4. Labor costs in the Philippines are competitive.
The salary rate for a Systems Engineer in the Philippines
is typically one-tenth the U.S. rate
5. Travel times and routes from North America and Europe
to the Philippines are convenient relative to other Southeast
Asia countries. The country’s 12-hour time gap with the
U.S. East Coast also makes it the ideal solution for round-the-clock
staffing for offshore IT-enabled operations
Source: Information Technology &
E-Commerce Council of the Philippines |
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