Optimism about Philippine economic prospects for the current quarter has dimmed but turned more positive when focus shifted to the last quarter of the year, the central bank’s latest quarterly survey of local firms said.
Local businessmen have a more positive outlook for the next quarter’s economic performance, results of the Business Expectations Survey (BES) conducted by the Bangko Sentral ng Pilipinas (BSP) showed on Friday.
According to the BES, the overall business confidence index (CI) declined significantly to 34.4 percent in the third quarter from 50.7 percent in the second quarter.
The figure for the present quarter is the lowest CI level since the third quarter of 2011, when the index stood at 34.1 percent.
The index is calculated as the net of the percentage of companies that answered in the affirmative and the percentage of firms that answered in the negative with respect to their views on given indicators.
Although the results were lower, the BSP said the new survey data still indicates that the number of businessmen with an optimistic outlook on the economy is still higher than the number of those who viewed it otherwise.
“This indicates that the number of optimists declined but continued to be greater than the number of pessimists during the quarter,” it stated.
Respondents attributed their less buoyant outlook to expectations of a seasonal slack in demand because of the interruption of business activities during the rainy season and lower consumer spending in view of increased expenditures on education and tax payments in the previous quarter.
Businessmen in the country also based their outlook on the increase in prices of basic commodities and higher overhead costs such as raw materials and utilities, and slowdowns in business activities as a result of the truck ban and port congestion issues.
The political noise brought about by the controversies surrounding the Priority Development Assistance Fund and the Disbursement Acceleration Program was also noted.
For the fourth quarter of the year, the survey revealed that the business outlook is more upbeat as the Q4 index rose to 52.9 percent from the 48.9 percent for the same quarter recorded in the BES conducted during the second quarter.
“This reading suggests that growth could accelerate in the last quarter of 2014,” the survey’s summary report concluded.
The BES said the respondent’s more positive outlook for next quarter was based on expectations of brisker business from the expected increase in consumer spending during the holiday season; expansion in the retail trade, infrastructure, power, telecommunications, education, and health care businesses; higher exports of garments and metals with the recovery of global markets; and increases in orders for manufactured products leading to higher volume of production.
“The prevailing favorable macroeconomic conditions brought about by the steady growth of overseas Filipinos’ remittances, increase in investment inflows as well as the expected roll-out of major public-private partnership projects also boosted business confidence for the next quarter,” the survey added.
The BES is a quarterly survey of firms drawn at random from the Securities and Exchange Commission’s top 7,000 corporations ranked in 2010 and Business World’s Top 1000 Corporations in 2012.
The survey was conducted between July 1 and August 15 among 1,527 companies nationwide.