BY IRMA ISIP

EVER hopeful Pinoys are now more optimistic than ever.

Local medium-sized businesses are optimistic about the prospects for the year, sending the Philippines to the top of the optimism survey for the first time in five years, results of the Grant Thornton International Business Report (IBR) show.

The IBR, released by Grant Thornton local member firm Punongbayan & Araullo (P&A), shows the Philippines, along with India, topping the table of optimism table among 34 countries with a positive balance of 95 percent, more than double the global average of 42 percent. The figure is the percentage balance of the respondents who are optimistic less those who are pessimistic.

Greg Navarro, managing partner and chief executive officer of P&A, said the country’s macro-economic gains fuelled optimism among business owners.

Navarro said based on IBR trends, the Philippines has been making a consistent and noticeable upward climb in the optimism scale since 2005 despite dampened global confidence.

This is a complete turnaround from 2004 when local business leaders who were polled were slightly pessimistic, registering a 1 percent optimism/pessimism balance due partly to the country’s flagging electronics sector.

The following year, the confidence index surged to 50 percent and has gotten stronger since.

"This time, our optimism can’t be credited merely to the Filipino’s innate hopefulness. We actually have made gains on several fronts," Navarro said, citing the 6.6 percent growth in gross domestic product in the third quarter of 2007.

Navarro added the optimism of local businesses is also a good validation of efforts at fiscal discipline and enhancing the country’s appeal to investors.

"After years of uneven growth, we’re finally standing on more solid ground now, so definitely our confidence is in the right place," Navarro said.

The higher third quarter GDP growth figure fuelled by better growth rates of all sectors, particularly industry and services, has prompted analysts to say that a higher-than-target full year expansion of 7 percent is likely.

Navarro said the services sector, in turn, was fuelled by the continued rapid expansion of the business process outsourcing industry.

"We’re seeing an evolution of the local BPO industry: where it used to be all about call centers and IT services, the industry is now expanding to other, more high-skill activities like design engineering, animation, and financial analysis," he said.

Foreign investors have also shown a keen interest in the mining industry, which is poised to continue its robust growth as new entrants begin commercial operations.

Foreign investments, along with higher remittances from overseas Filipinos have helped strengthen the peso, and helped keep inflation in check, staying below last year’s target band of 4 to 5 percent from January to November.