Saturday, 28 August 2010

HSBC survey: Small firms bullish, plan expansion

Roderick T. dela Cruz
Manila Standard

Business confidence in the Philippines is healthy, with many small and medium enterprises considering expansion and even going international, according to a survey by Hong Kong and Shanghai Banking Corp.

HSBC, in its semi-annual Global Small Business Confidence Monitor, said business confidence in the Philippines was healthy with an index of 115, above the neutral level of 100 but reflecting guarded optimism when compared with other emerging markets in Asia.

The survey gauges the outlook of SMEs on local economic growth, capital investment plans and recruitment.

The survey covered 6,300 small businesses in 21 markets, including 300 business owners in the Philippines, in the second quarter of 2010, or during the election period in the country. It was the first time the Philippines was included in the study.

“I would suspect that if we the survey was held after the elections, this would have shown better results,” Veloso said.

HSBC Philippines president and chief executive Tony Cripps confirmed the results of the survey, noting the strong 7.9 percent gross domestic product growth in the second quarter. HSBC expects the Philippine economy to post an annual growth of 5 percent in 2010 and 2011.

“We have lately been upgrading our growth forecast. This result today generally confirms the trend of improvement,” Cripps said.

Results of the survey showed that 43 percent of SMEs in the Philippines expect the economy to maintain same pace of growth, while 33 percent expect the economy to improve.

“About 40 percent of SMEs in the Philippines plan to increase their capital expenditure spending, 27 percent plan to expand their workforce, while 66 percent plan to maintain their existing staff count,” Veloso said.

Veloso said one out of five SMEs included in the survey had international trade or operations. But one out of three have plans to engage in international trade or operations in the next two years.

HSBC has a client base of 4,000 SMEs in the Philippines.

The survey showed that Vietnam was the most confident country in Asia with an index of 164, followed by Singapore (136), China (123) and India (121).

Global index increased from 111 to 118, led by emerging markets.

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