Optimism among businessmen about the prospects of the Philippine economy for the current quarter has grown, outweighing the negative outlook expressed by the others in the latest central bank survey of local firms.
Business confidence about the third quarter, however, lost some steam, according to the latest Business Expectations Survey (BES) survey conducted by the Bangko Sentral ng Pilipinas.
The overall business confidence index (CI) for the second quarter stood at 50.7 percent, up sharply from 37.8 percent recorded for the first quarter. The CI for the third quarter dipped to 48.9 percent.
The index considers the percentage of firms that answered in the affirmative and the percentage of firms that answered in the negative with respect to their views on a given indicator.
The BSP views the new data as a favorable indicator of business confidence in the country, highlighting the increase in the number of optimists among the businessmen surveyed and that they outnumbered the pessimists during the quarter.
According to the BES, the more upbeat outlook was reflected by robust consumer demand during the second harvest season, the school graduation and enrollment periods, and the summer season when a high influx of both local and foreign tourists was recorded.
Respondents also based their replies on new construction projects by the public and private sectors, boosted by the rehabilitation efforts after the natural calamities of last year, and on an increase in orders and new contracts or projects which led to a higher volume of production.
Businessmen in the country also attributed their bullish outlook on the expansion of businesses, the launch of new product lines and a rise in investment coinciding with the recovery in the United States and other export markets, as well as continued confidence in the incumbent administration.
“The country’s strong macroeconomic fundamentals, such as manageable inflation and steady growth of remittances, as well as more favorable external conditions with the recovery of the global markets support the positive business outlook,” the BSP said in a statement.
Going forward into the third quarter of the year, the survey shows the business outlook continued to be upbeat as businesses expect the expansion in the economy to continue, although the momentum loses some steam.
The BSP said optimism for the next quarter was based on a positive outlook for wholesale and retail trade, as well as the construction sector, given expectations of brisker demand, as the new school year starts and expansion projects in power generation, telecommunications and building of highways gain pace.
“However, the optimism was dampened by expectations among firms engaged in manufacturing and hotel and restaurant services of a slack in demand during the rainy season,” it 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 April 1 and May 14 among 1,529 companies nationwide.