PH firms more optimistic as holidays draw near
Local businesses expect to book higher sales and expand their operations in the fourth quarter of the year, in time for the holiday season in December and the harvest season at the end of the year.
Results of the Bangko Sentral ng Pilipinas (BSP) fourth quarter Business Expectations Survey (BES) showed optimism among businessmen reached a near record high for the fourth quarter of the year.
“Despite the recent looming concerns over the pork barrel issue, the US Government’s shutdown last October, and the impact of natural calamities, business outlook for the Philippines is on course to remain positive,” the BSP said in a statement.
The overall confidence index reached 52.3 percent for the fourth quarter, showing that there were more optimists than pessimists. This was an improvement from the confidence index of 42.8 percent registered in the third quarter.
BSP Deputy Governor Diwa C. Guinigundo noted that the fourth quarter is usually associated with the Christmas season, which drives demand for consumer goods, and the harvest season, which leads to higher income levels for farmers.
However, the BSP noted that the survey, which was conducted between Oct. 1 to Nov. 11, does not take into account the possible effects of typhoon Yolanda.
In answer to the expected rise in demand, the BSP said most companies increased their production volumes, and introduced new product lines.
The BSP cited the favorable macroeconomic conditions in the country, particularly “low inflation, a strong peso, higher foreign investment inflows, and the political noise brought about by the pork barrel issue.”
Across sectors, retailers and wholesalers were the most bullish, with their overall confidence index reaching 59.4 percent—the highest score for the sector since the BES was started in 2006.
The BSP said respondents cited the continued growth of remittances from overseas Filipino workers, which supports consumer spending. Remittances from OFWs are expected to grow by 5 percent to $22.5 billion this year.
Hotels and restaurants were also among the most optimistic, with its confidence index reaching 59.9 percent in the fourth quarter.
However, the sentiment turned sour for businesses’ outlook for the first quarter of next year, the BES said. The confidence index for the first quarter of 2014 declined to 40.7 percent from an all-time high of 60 percent in the third quarter survey.
The BSP said companies cited the expected slowdown in the global economy, particularly the US and euro markets. Respondents also cited the possible shutdown and default of the US government once it reaches its legal borrowing limit in February next year.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.