Philippine businesses felt better off this quarter compared with that of the same period last year as the encouraging outlook on the economy helped raise income expectations.
According to the Bangko Sentral ng Pilipinas’ latest Business Expectation Survey (BES), the business confidence index improved to +41.5 percent in the first quarter—better than the +40.5 percent reported in the same period last year.
“This bespeaks of the growth momentum of the economy. Fundamentally, this is an indication of the view that the good readings we are seeing in the macroeconomic front would be sustained,” Ma. Cyd Tuano-Amador of the BSP said during a press conference Friday.
But the latest index was lower than the +49.5 percent recorded in the fourth quarter of 2012.
Rosabel Guerrero, director of the central bank’s economic statistics department, said the quarter-on-quarter decline was due to seasonality factors.
Usually, she said, business sentiment is lower in the first quarter than the rest of the year as demand for goods and services tends to drop immediately after the Christmas season.
Guerrero said the latest survey, which was conducted from Jan. 3 to Feb. 8, covered 1,555 firms nationwide with a response rate of 80.2 percent.
Also, survey results showed that the “next-quarter index” improved amid expectations that that the economy would be able to sustain the favorable performance seen recently.
The next-quarter index, which indicates expectation of businesses as to whether their sentiment will improve or worsen in the coming quarter, came in at +56.4 percent—up from the 55.4 percent reported during the same period last year and the +43.8 percent seen in the fourth quarter of 2012.
The Philippine economy, which grew by 6.6 percent last year to become one of the fastest growing economies in Asia, is expected to maintain its growth momentum through 2013. The official economic growth for this year has been set between 6 and 7 percent.
Amador said the growth projection, as well as expectation that the Philippines would soon get an investment grade rating, allowed most companies to feel good about doing business in the country.
“Business sentiment is favorable also because of the general perception of good governance,” she added.