ASEAN KEY DESTINATIONS
Business optimism lowest in over two years – BSP survey
Philippine business sector optimism about the Philippine economy fell to its lowest level in 10 quarters during the first three months of the year, results of the latest Bangko Sentral ng Pilipinas (BSP) Business Expectations Survey (BES) showed.
The overall confidence index (CI) registered at 39.4 percent in the first quarter of the year, compared with 41.9 percent in the first quarter of 2016 and 39.8 percent in the fourth quarter, Monetary Policy Sub-Sector (MPSS) Managing Director Francisco G. Dakila Jr. said
But first quarter 2017 CI was the lowest since it registered at 34.4 percent in the third quarter of 2014.
The confidence index is computed as the percentage of firms that answered in the affirmative, minus the percentage of firms that answered in the negative with respect to their views on a given indicator.
BSP Department of Economic Statistics Director Rosabel D. Guerrero said the slight decline quarter-on-quarter was due to the following factors:
Usual slowdown in business activity and moderation of consumer demand after the holiday and harvest seasons
Start of implementation of new business strategies for the year
Rising oil prices and higher cost of raw materials
Wait-and-see attitude of investors with regards to the economic policy of the Trump administration
“When we look at the seasonality for the current quarter – for the first quarter – normally first quarter results would be lower than fourth quarter results,” Dakila said.
BSP Deputy Governor Diwa C. Guinigundo said the latest results did not have any significant changes from the previous quarter. “Broadly steady because 39.8 is not significantly different from 39.4.”
Second quarter 2017
Results of the BES for the second quarter of the year showed that the CI rose 47.2 percent from the 34.5 percent in the previous quarter.
“The next quarter suggests that economic growth could accelerate for the next quarter,” the BSP said in a statement.
Among the factors for the optimistic outlook are expectations of an increase in demand during summer, sustained increase in orders and projects leading to higher volume of production, and the expansion of businesses and new product lines.
Driving business optimism higher are the introduction of new and enhanced business strategies, infrastructure projects, and confidence in the administration.
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