Business sentiment soars to record high
MANILA, Philippines - The 3 investment grade credit ratings the Philippines has recently won from global debt watchers caused business sentiment in the Philippines to reach a record high in the second quarter.
Overall confidence index rose to 54.9% from the first quarter's 41.5%, according to the quarterly Business Expectations Survey that the Bangko Sentral ng Pilipinas released on Thursday, May 23.
"This is the highest reading since the start of the nationwide survey in the fourth quarter of 2006," the BSP said in a statement.
The index reflects the difference between the percentage of firms that answered in the affirmative regarding questions on a given sector, and the number of firms that answered in the negative.
The survey conducted between April 1 and May 10, after Fitch Ratings upgraded the country's credit rating to investment grade on March 27.
Respondents also cited the following for their record-high outlook:
- expansion of business, product lines (for manufacturing and trade), new projects (for construction and real estate)
- election-related spending
- seasonal uptick in demand during the summer and harvest/fishing seasons
Businessmen also noted that financing for their expansion plans is easier. Credit access index rose to its highest level ever in the 2nd quarter.
Construction, retail and the services sector are the most bullish in both 2nd and 3rd quarter 2013.
"Construction firms expect more public infrastructure projects after the May elections," the BSP said, citing expectations that favorable business conditions would encourage more foreign investment inflows, particularly in the office, housing and expansion of factories.
Among the service subsections, financial services remained the most optimistic, with a confidence index soaring to a 6-year high of 89.4% in the 2nd quarter.
About 1,554 firms participated in the survey, the BSP said. - Rappler.com