Continued Deterioration
Comparing economic and corporate outlook in the surveys conducted during the time of former President Estrada, results would reveal that the outlook deteriorated even further in January 2001 versus July 2000. In the July 2000 survey, 42% of respondents believed GNP growth in 2000 will be lower than 1999. This percentage doubled in the January 2001 survey, reflecting greater pessimism for GNP growth in 2001. This pattern was the same for those anticipating that inflation and interest rate levels in 2001 will be higher than 2000 records.

In the July 2000 survey, 68% expected investments for the year 2000 to fall behind the 1999 record. An even bigger percentage (80%) thought investments in 2001 will still be lower than those in 2000. While respondents were still a little optimistic in terms of export and import performance in 2000, the optimism waned in January when majority of respondents expected exports in 2001 to simply match the 2000 record while believing that imports in 2001 will be lower than the previous year's.

Bleak Corporate Scenario
The bleak macroeconomic outlook is also translated in the corporate setting. The percentage of respondents expecting corporate revenues to grow in 2000 was lower in the January 2001 survey compared to the July 2000 survey. Majority (44%) in the January 2001 survey, in fact, predicted a decline in 2000 net income from 54% who still believed that net income will grow in 2000.

Capacity utilization levels as of 31 December 2000 averaged 19.6% for manufacturing firms who responded to the survey. This used to be 55.7% as of 31 May 2000. Raw materials inventory as of end-December 2001 was good for 2.2 months while finished goods inventory was good for only 1.6 months.

Perception of Government Performance
Respondents gave a generally dissatisfactory rating to government agencies for their performance in the July-December 2000 period. Only six out of 34 agencies which were rated got positive net scores during the survey period. These were - in order of ranking - the Supreme Court, Dept. of Foreign Affairs, Dept. of Agriculture, Dept. of Social Welfare and Development, Armed Forces of the Philippines, and Bangko Sentral. Those which got big drops in net ratings compared to their ratings in the July 2000 survey were the Dept. of Finance, Dept. of Trade and Industry, and the National Economic and Development Authority.

Net rating scores are the difference between percentage of satisfied respondents and percentage of dissatisfied respondents.

Business' Concerns
A qualitative portion of the Executive Outlook Survey asked respondents what for them have been the three most positive developments during the last six months (July-December 2000) of the Estrada administration. The survey form provided three blank spaces and after tallying up the accomplished forms, the following developments topped the list: impeachment trial of President Estrada, resolution of the Mindanao crisis, and exposure of President Estrada's corruption.

Another question posed was: what are the three most important areas of concern or issues that should be addressed in year 2001? The issues that were mentioned by at least 20% of respondents were governance / corruption, peace and order, the economy, and the impeachment and removal of President Estrada.

About The Survey
MBC's Executive Outlook Survey is conducted every January and July of each year among members of the Makati Business Club. The survey has been running for almost ten years now and has been a reliable gauge of business confidence in the economy.