Q1 business index dips, jumps on Q2 prospects

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Business sentiment on the Philippine economy weakened in the first quarter this year as the frenzy of Christmas consumer activity waned, but bounced back going forward with about one in every three industry respondents to a survey talking about expansion plans for the second quarter.

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The overall business confidence index (CI) for the first quarter slipped to 45.2 percent from 48.3 percent in the fourth quarter of 2014, results of the quarterly Business Expectations Survey (BES) released by the Bangko Sentral ng Pilipinas (BSP) on Friday showed.

For the second quarter of 2015, however, sentiment turned bullish, pushing the index up sharply to 58.2 percent from 43.1 percent in the previous quarter.

Rosabel Guerrero, director at the BSP’s Department of Economic Statistics, said business sentiment traditionally moderates after Christmas, but the second quarter this year offers prospects of increased public-private infrastructure spending, sustained foreign investment and a steady stream of Filipino workers’ remittances.

Optimists outnumber pessimists
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 (Q1 index) indicates that the number of optimists declined but continued to be greater than the number of pessimists during the quarter,” Guerrero told reporters in a press briefing.

Guerrero said the respondents attributed the first-quarter fading of their optimism to the usual slowdown in business activity and moderation of consumer demand after Christmas, along with the continued effects of past typhoons on crop production and businesses.

Businessmen in the country also expressed concern over the backlog in deliveries caused by port congestion and the decline in fish supply given the end of the fishing season for sardines, particularly in General Santos City.

Bullish on Q2 demand
But the survey said respondents expressed anticipation of increased demand during the secondary harvest and open fishing seasons, the graduation and school enrollment periods, as well as the influx of both local and foreign tourists as summer begins.

Businessmen also said they expect to see sustained increases in orders and projects in the second quarter, leading to higher volumes of production; expansion of businesses and new product lines; and the introduction of new and enhanced business strategies and processes.

“Their 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 program and 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,” Guerrero said.

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 Jan 5 and Feb 10 among 1,523 firms nationwide.

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  1. hello world..godbleess the phillipines..get in my scoope of future for a whole new world for one hearth one vission with love and peace..thank you ..pls guide me