Business sentiment hits 2-year high – BSP
MANILA, Philippines – Business sentiment hit a 2-year high in the fourth quarter of 2015, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, December 4.
The business sentiment for the quarter was buoyed by consumer demand this Christmas season, steady flows of cash remittances from overseas Filipinos, and election-related spending, the BSP's Business Expectations Survey (BES) showed.
The BSP’s Department of Economic Statistics Director Rosabel Guerrero said the BES overall confidence index rose to 51.3% in the fourth quarter survey after dropping to 41.4% in the previous quarter survey. This was also the highest since the fourth quarter of 2013 when the overall confidence index reached 52.3%
Guerrero said other factors for the more optimistic outlook include the main palay harvest and milling seasons.
Respondents also cited sustained increase in sales orders and projects leading to higher volume of production, the expansion of businesses and new product lines, as well as introduction of new and enhanced business strategies and processes.
APEC, election-spending boost
Guerrero said the country’s hosting of the Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting in November also resulted in expectation of brisker business.
The services sector was also more upbeat with hotels and restaurants posting the highest confidence index due to the APEC summit.
But airlines and hotels where the visiting leaders and their delegations stayed had said they suffered losses due to the country's APEC hosting. (READ: APEC led to losses for hotels, airlines)
Meanwhile, Guerrero also said the sentiment of businesses in the Philippines mirrored the buoyant business outlook in Australia, Japan, and the Euro area.
BSP Deputy Governor Diwa Guinigundo said the upbeat business sentiment for the fourth quarter was due to the remittances from overseas Filipinos that average $25 billion per year.
Guinigundo added that election-related spending for the May 2016 polls started to kick in with the television and radio advertisements of candidates.
He added the wholesale and retail trade sector was the most bullish for the fourth quarter, with the confidence index hitting a record-high of 59.9% since the start of the survey in the fourth quarter of 2006.
The industry firm’s outlook also turned more buoyant for manufacturing, electricity, gas, and water, as well as agriculture sub-sectors.
As expected, Guerrero said the business outlook for the first quarter of 2016 turned less optimistic with the confidence index at 43.9% from 53.1% in the current quarter.
Respondents attributed this outlook to the typical slowdown in demand after the holiday season, she said.
Other reasons cited by firms were stiffer competition, concerns over the adverse effects of El Niño, and uncertainties in the global economy, Guerrero added.
The BES was conducted between October 1 and November 16, covering 1,514 companies nationwide. – Rappler.com
Christmas shopping image from Shutterstock