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By Chino S. Leyco, Reporter
BUSINESSMEN remain bullish about economic
prospects in the second quarter even as respondents to the Bangko
Sentral ng Pilipinas Business Expectations Survey expressed some
uncertainties about the current quarter.
In a briefing, BSP Deputy Gover-nor Diwa C.
Guinigundo said traders continue to have an optimistic view of
macroeconomic conditions in the period January to March, with the
confidence index at 29.9 percent, but 15 index points lower than a
year ago due to weakening outlook particularly of exporter firms.
The firms cited seasonal production slack in the
first quarter, concerns over possible recession in the US economy,
reduced compe-titiveness of exports due to peso appreciation,
unabated increase in crude oil prices and local political noise.
Guinigundo said respondents believed that
business activity would be upbeat in the second quarter with
confidence index of 41 percent, as consumer expenditures usually
pick up during the summer season and the opening of the school year.
The survey was conducted from January 7 to
February 6 this year, a period marked by the ZTE broadband deal
scandal posed on the Arroyo government.
Guinigundo said the survey has factored in the
ongoing political noise.
He said: “In the past, the Philip-pine economy
with the benefit of what we did in the past 10 years was able to
survive, although it went through difficult times. Today, we benefit
from previous efforts we put in both structural and policy reforms.
I think we are in a better position, generally.”
The survey showed the construction and services
sectors posting the highest indices at 42.4 percent and 42.1
percent, respectively, which Guinigundo attributed to continuing
property boom in the market.
The service sector comprising of finance, hotel,
real estate as well as community and social services subsectors
posted the highest confidence level.
The business outlook of the wholesale and retail
trade sector and industry sector remained positive at 28.3 percent
and 17.7 percent but the downswing in sentiment may be due in large
part to the seasonal decline in consumer spending in the first
quarter of the year.
Guinigundo said in the first semester of the
year, inflation is expected to rise to the top end of the target
range, and projected it would come down in the final six-month
period.
BSP Governor Amando M. Tetangco Jr. earlier said
monthly inflation rate in January to June would rise close to 5
percent, but average inflation forecast for the year falls within
the middle of the target range, or 4 percent.
“We continue to monitor developments in the
movers of inflation such as domestic demand pressures, any rise in
domestic liquidity from more foreign exchange inflows, volatility in
oil prices as well as any second-round effects from this,”
Tetangco added.
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