Philippine SMEs most bullish in the Asia Pacific

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About 38% see sound supply chain management as a means to cut cost

AMONG small- and medium-scale enterprises (SMEs) in the Asia Pacific, those based in the Philippines are the most optimistic when it comes to business prospects for the year, according to the latest Asia Business Monitor (ABM) survey commissioned by express operator United Parcel Service (UPS).

Based on the survey, about 85% of Philippine SME respondents see greater opportunities in the country this year compared to last year, most likely due to the assumption of a new government. About 44% indicated they will hire more workers this year.

Philippine SMEs “showed remarkable resilience last year when they maintained their optimism amid the global economic downturn and from this year’s findings, they are maintaining the same bullishness,” UPS managing director Tim Gohoc said at last week’s release of the ABM results.

The survey placed 49% of SMEs across the region holding a positive economic outlook for the year. Only 14% expected the economy to decline compared to last year’s 65%.

The survey also reflected rising trade sentiment, with 66% of Philippine SMEs indicating most opportunities for growth lie within the Asia-Pacific and 43% in North America.

“For UPS, hopefully the optimism will translate to better volumes to further boost our good volumes,” Gohoc said.

The results noted that funding, a long-running problem in the Philippines, does not now seem to be a primary concern but competition, business infrastructure and costs are.

About 38% of Filipino SME leaders see supply chain management as a means to cut cost while 21% believe it is one method to ensure quality.

“Philippine SMEs realize that in order to compete in the regional markets, they have to be cost-competitive while maintaining a relatively high level of quality and service. They see a sound supply chain strategy as providing them with the edge to compete with more sophisticated markets,” Gohoc said.

On its sixth year, the UPS ABM is a survey of Asia-Pacific SMEs covering 1,350 SMEs across 13 markets — Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam. The survey is conducted to look into the latest insights on the changing business needs of SMEs, the largest business community in the Asian region.

The survey was conducted between March 11, 2010 and April 20, 2010 involving 1,351 respondents from companies with at least 250 employees and 22 years of existence.

In the Philippines, SMEs dominate the business landscape. About 92% are considered micro industries; 7.7%, small; 0.4%, medium; and a very small percentage, large enterprises.

About 49.9% are into the wholesale and retail trade; 14.7%, manufacturing; and 12.3%, services.