COMPANIES are less optimistic about the Philippine economy in the third quarter of 2015 due to seasonal factors, such as the impact of weather on agriculture, a fishing ban and the cost of education.
Sentiment is more upbeat in the fourth quarter due to the seasonal pickup in economic activity.
The overall business confidence index (CI) for the third quarter dropped to 41.4 percent from 49.2 percent in the second quarter, results of the quarterly Business Expectations Survey (BES) released by the Bangko Sentral ng Pilipinas (BSP) on Thursday show.
For the fourth quarter of 2015, the business outlook turned more upbeat at 53.1 percent from 47.3 percent in the preceding quarter.
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 the given indicators.
The respondents attributed their less buoyant outlook on the slack in demand during the rainy season; lower crop production as a result of the El Niño; ban on fishing in the Davao Gulf from July to September; and lower consumer spending in view of increased expenditures on education.
“The sentiment of businesses in the Philippines mirrored the less buoyant business outlook in the US, but was in contrast to the more bullish views of those in the UK, Germany, Korea, Singapore, Hong Kong, and India,” according to the survey results.
More upbeat on Q4
On the other hand, the respondents for the quarter ahead were more optimistic on account of the usual pickup in consumer demand during the holiday, as well as the harvest and milling activities.
They also noted: higher sales and orders that spur an increase in production volume; business expansion in retail trade, manufacturing, finance and business process outsourcing services; new and improved procedures and methods that increase agriculture output; opening of high seas/fishing operations in October; steady flow of overseas Filipinos’ remittances during the holiday season; and election-related spending for the 2016 national polls.
“The respondents also cited that the prevailing favorable macroeconomic conditions boosted their business confidence for the next quarter.”
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 2013.
The survey was conducted between July 1 and August 17 among 1,516 firms nationwide.