ASEAN KEY DESTINATIONS
Philippines business optimistic
Based on its latest Business Expectation Survey, the Bangko Sentral of Pilipinas (BSP) said the overall confidence index reached 50.6 percent—the highest reading since the start of the survey in 2001—compared with the 45 percent in the third quarter this year and 22 percent in the fourth quarter last year. Based on respondents’ replies, the all-time high business outlook for the current quarter was driven by sustained improvements in the economy on the back of strong domestic demand fuelled partly by the steady stream of overseas Filipino worker (OFW) remittances and higher capital inflows.
Money sent home by OFWs grew by 10.6 percent to $1.6 billion in September, the highest so far this year.
The more buoyant outlook was also attributed to seasonal factors with the oncoming Christmas and farm harvest.
Respondents also cited the continued strong confidence in the new government.
The positive business sentiment likewise mirrored the improving business confidence in countries such as Canada, Hong Kong, India, Germany, Italy and New Zealand.
However, businesses were less optimistic for the first quarter of 2011 in view of the expected slowdown of business activity after the Christmas season, with the confidence index falling to 51 percent from the previous 59.2 percent.
Businesses involved in international commodity trading have a positive but less favorable outlook with the confidence index of 49.7 percent down from 60.1 percent the previous quarter.
This was due to expectations of low export demand on account of the slow economic recovery of international markets from the global financial crisis.
The strengthening of the peso also contributed to the lower confidence of respondents in the exports business, but the same factor provided support to the more sanguine outlook of importers given that a stronger peso reduces their costs in peso terms.
The confidence index was computed as the percentage of firms that answered in the affirmative less the percentage of firms that answered in the negative with respect to their views on a given indicator.
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