The overall business confidence index in the Philippines recorded an all-time high of 54.9 percent, indicating a bullish outlook on the economy in the second quarter of the year, according to the Business Expectations Survey (BES) released by the Bangko Sentral ng Pilipinas (BSP) on Thursday.
The BES said that the outlook was based on the respondents’ expectations on business expansions, brisker business because of election-related spending, and seasonal uptick in demand during the summer and harvest/fishing seasons.
Respondents were also optimistic that their businesses would benefit from the recent investment grade credit rating the country received from Fitch Ratings, Standard and Poor’s and Japan Credit Rating Agency, as well as the strong Philippine macroeconomic fundamentals.
For the next quarter, the survey noted that the business outlook continued to be favorable, but the confidence index in the third quarter of the year was lower at 46.2 percent.
“Business involved in international commodity trading had more favorable views in second quarter 2013,” the survey stated.
It added that importers were the most optimistic citing reasons such as higher domestic demand and a stronger peso, which reduces the cost of imports in peso terms.
Exporters’ outlook, on the other hand, was more buoyant in the second and third quarters, with expectations of more projects and orders as a result of the continuing recovery in the US economy, and stronger growth prospects in emerging market and developing countries.
Across sectors, the BES mentioned that the outlook of businesses was also more bullish in the second quarter.
It said that the confidence of firms in the construction, and wholesale and retail trade sectors were at their highest levels.
The survey further said that the outlook for businesses across sectors was more upbeat, except for wholesale and retail trade which turned less optimistic.
Meanwhile, the BES continued that the financial condition index reverted to positive territory at 1.3 percent in the second quarter from -1.5 percent in the previous quarter.
“Firms were also of the view that their liquidity requirements could be met through available credit, as more respondents continued to report easier access to credit relative to those that indicated the opposite a quarter ago,” it stated.
It noted that the credit access index rose to its highest level ever in the second quarter of 2013.