Grim Outlook

Posted by Alecks Pabico 
PCIJ

PESSIMISM is now the prevailing mood among business executives as the country has slipped into a prolonged political crisis that has already taken its toll on the economy. Results of the recent Executive Outlook Survey conducted by the Makati Business Club among its members find the business optimism in the economy at the start of the year now being replaced with gloom despite the government's improved fiscal condition in the first half of the year.

Majority of the executives surveyed feel that there will be a lower GDP growth this year, a sharp downturn in business optimism compared to January 2005 when the survey was last taken. They also expect higher  inflation (compared to last year's 6.0% rate) and interest (compared to last year's 7.34% level for 91-day T-bills) rates.

More than two-thirds of the respondents likewise expect the peso to depreciate against the dollar by about 5 percent in the next six months.  A little over half of senior business executives also now see investments in 2005 falling below last year's P221.8 billion in investment approvals.

In terms of issues and developments, political concerns now outweigh economic ones as 61 percent of  business leaders consider the credibility and effectiveness of the Presidency a key issue that must be addressed.

The survey also focused on government performance, with 17 agencies, institutions and basic services receiving positive net scores for their performance in the last six months. Eighteen, however, got negative net scores. Interestingly, most of the agencies in the top list were those headed by some of the resigned Cabinet officials tagged as the " Hyatt 10." The top performing agencies are:

1. Bangko Sentral ng Pilipinas (80.8%) under Gov. Rafael Buenaventura (now retired)
2. Department of Finance (61.7%) under Sec. Cesar Purisima
3. Department of Trade and Industry (58.5%) under Sec. Juan Santos
4. Department of Budget and Management (53.2%) under Sec. Emilia Boncodin
5. Bureau of Internal Revenue (43.7%) under Commissioner Guillermo Parayno

Meanwhile, the worst performing government agencies in the last six months are the following:

1. House of Representatives (-82.9%)
2. Senate (-79.8%)
3. Commission on Elections (-78.7%)
4. Department of Public Works and Highways (-67.0%)
5. Department of Justice (-57.5%)

Done from July 1 to 29, the MBC survey had 94 respondents or close to 13 percent of the club's membership. A little over 70 percent of respondents belong to top management positions while close to 77 percent are Filipinos.