Turns less positive for Q1 2015 – BES
Business sentiment about Philippine economic prospects for the fourth quarter of this year improved from the third quarter but turned less upbeat for the first quarter of 2015, the central bank’s latest quarterly survey of local firms said.
Results of the Business Expectations Survey (BES) released by the Bangko Sentral ng Pilipinas (BSP) on Friday showed the overall business confidence index (CI) rose to 48.3 percent in the fourth quarter from 34.4 percent in the third quarter.
However, for the first quarter of 2015, the survey revealed that the business outlook is less optimistic as the index eased to 43.1 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.
“This quarter-on-quarter uptick in the CI, the highest since the first quarter of 2010, indicates that more businesses are optimistic about the country’s economic prospects in the fourth quarter of 2014 compared to that of the previous quarter,” the BSP stated.
Respondents attributed their more optimistic outlook to the expected increase in consumer demand during the Christmas and main palay harvest seasons, and expectations of sustained increases in orders and projects leading to a higher volume of production.
Businessmen in the country also based their outlook on the expansion of businesses and new products lines, and the introduction of new and enhanced business strategies and processes.
The survey added that the more positive outlook was further driven by expectations of an acceleration in the roll-out of infrastructure and other development projects under the Public-Private Partnership (PPP) program.
The favorable macroeconomic conditions in the country, particularly stable inflation and low interest rates, sustained foreign investment inflows and the steady stream of overseas Filipinos’ remittances, were also among the factors cited for the optimism.
“The next quarter CI suggests that the optimists continued to outnumber the pessimists but the number of respondents with favorable views declined relative to the previous quarter’s survey results,” the survey said.
The BES said the respondent attributed their less sanguine outlook for the first quarter of 2015 to the typical downturn in demand after the holiday season.
“Other reasons cited by firms were concerns over the backlog in deliveries caused by the port congestion problem and a looming power crisis as well as uncertainties in the global economy, particularly emanating from Europe and Japan,” 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 October 1 and November 13 among 1,518 firms nationwide.