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Investor sentiment buoyant in ASEAN; PH leads in GDP growth forecast

Despite concerns on the domestic tax environment in the Philippines, the country still ranks highest in terms of high GDP growth projection in ASEAN, which growth is partly driven by government spending, according to a survey.

The Oxford Business Group launched its edition of the Business Barometer: OBG in ASEAN CEO Survey, which pointed to a bloc of countries in which investor sentiment and business expectations are sky-high, two decades on from the financial crisis that spelt disaster for much of the region.

According to the survey, executives from Vietnam and Myanmar were most negative about business transparency levels, with CEOs from the latter also among the most pessimistic about the domestic tax environment, alongside executives from the Philippines.

On the other hand, CEOs from Vietnam, together with others in Malaysia and Thailand, were more positive about their respective tax environments.

The survey also showed CEOs pointing to the Philippines’ as mostly likely to grow GDP growth of 6-8 percent followed by Vietnam and Myanmar.

From the business leaders interviewed, 72% told OBG that they were likely or very likely to make a significant capital investment within the next 12 months. An even higher share (around 84%) of executives surveyed across the six ASEAN states had positive or very positive expectations for local business conditions over the same timeframe.

When it came to transparency, the picture was varied. Almost half (47%) of business leaders interviewed described transparency in their market as high or very high relative to the region, while a similar share (41%) said it was low or very low.

Responses were similar to a question about tax competitiveness, with half of the respondents referring to their country’s tax environment as either uncompetitive or very uncompetitive on a global scale, while 41% said it was competitive or very competitive.

Three-fourth of respondents also said that government spending spurs less than 40 percent of the business in their respective sectors.

OBG’s findings also confirmed the influence that China continues to exert on the ASEAN markets, with the highest proportion of respondents (33%) citing a slowdown in the Asian giant’s economy as the external factor they believed would have the greatest impact on short-to-medium-term domestic growth.

Trade between China and ASEAN reached a record level of $514.8 billion in 2017, according to official Chinese figures. China also tops the list of trading partners for all six countries represented in OBG’s survey.

A similar share (31%) cited leadership as the attribute most in need across the workforce in their respective markets, followed by engineering (28%), and research and development (15%), highlighting skills gaps across the region that could hinder competitiveness if left unaddressed.

Commenting on the results in his blog, Patrick Cooke, OBG’s regional editor for Asia, said the strong business sentiment and high expectations documented in the inaugural OBG in ASEAN CEO Survey were in line with the region’s current position as the leading engine of global economic expansion.

Source: Manila Bulletin

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