Businesses more confident about access to finance in 2010 --report

MANILA, Feb. 9 (PNA) --The Grant Thornton International Business Report (IBR) said that privately held businesses (PHBs) around the world are increasingly confident that access to finance will be easier in 2010.

The business report was released by audit, tax and business advisory firm Punongbayan & Araullo (P&A), the Grant Thornton Philippine member firm.

According to the report, 35 percent of businesses believed that access to finance would be 'more' or 'much more accessible' in 2010, compared with only 14 percent who were similarly positive 12 months ago.

Businesses were also asked how supportive they believed their lenders would be.

Sixty-nine percent feel their lender is currently being 'supportive' or 'very supportive' towards their business - unchanged from 2009. However, huge global differences appear when lender support is compared to accessibility of finance, with four scenarios emerging.

Chile, India and the Philippines are the most confident.

Among the local business leaders surveyed, 55 percent believe finance will be ‘much more accessible’ or ‘more accessible’ in 2010, while 88 percent reported that their lenders are either ‘very supportive’ or ‘supportive’ of their businesses.

Data from the Bangko Sentral ng Pilipinas (BSP) show that in November last year, bank lending – including reverse repurchase agreements – increased by 2.6 percent year-on-year to P2.3 trillion.

With the economy showing signs of recovering, lending activity is expected to gain momentum in 2010 as banks ease their lending policies.

“Even when the global economic crisis hit us last year, the attitude of Filipino business leaders regarding their access to finance and the support they got from their lenders was still more upbeat compared to the global average,” said Marivic Españo, managing partner and CEO of P&A.

“And now, that confidence has been bolstered by signs that we are pulling out of the crisis. Banks are getting the word out that they expect to lend more, if not to big corporations then to SMEs that can drive growth. So this bodes well for local PHBs that want to expand their businesses in 2010,” Espano said.

IBR respondents were also asked which of the following constraints served as the biggest roadblocks to their business expansion: lack of skilled workforce; shortage of working capital; shortage of orders/reduced demand; shortage of long-term finance; cost of finance; and regulations/red tape.

In the Philippines, lack of skilled workforce has topped the list of constraints since 2007, with majority of Filipino business leaders tagging it as a ‘constraint’ or a ‘major constraint’ to expansion plans.

This year, it has been surpassed by regulations/red tape, which 45 percent of local respondents consider a roadblock to their business growth. (PNA)
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