Business optimism remains high

Business sentiment remained steady in the first quarter, bucking a usually-steep drop in confidence in the months right after the holiday season, the Bangko Sentral ng Pilipinas (BSP) reported Friday.

Results of the BSP’s Business Expectations Survey (BES) showed companies remained optimistic, expecting higher profits and brisk operations that would allow them to hire more people in the current period.

Projections for the second quarter of the year were also better, reflecting seasonal factors that are good for business, namely an increase in economic activity due to fresh agricultural harvests, and the rollout of more infrastructure projects.

“This is consistent with the more bullish outlook for the economy,” Monetary Policy Stability Sector head Francis Dakila said at a press conference yesterday.

For the first quarter of 2015, business confidence stood at 45.2 percent, slightly lower than 48.3 percent in the fourth quarter but significantly better than the 37.8 percent in the first quarter of 2014. The latest score was the highest first-quarter index since 2011, data showed.

Survey respondents said the usual slowdown in economic activity following the October-to-December holiday season was mainly to blame for the less optimistic sentiment.    Concerns over the persisting backlog at Manila’s ports also weighed on company executives’ minds.

Business confidence for the upcoming quarter was better at 58.2 percent from 43.1 percent previously. “The next quarter index suggests an acceleration in economic growth for the next quarter,” the BSP said.

The confidence index is the difference between pessimists and optimists among firms in the survey. The survey involved 1,523 firms and was conducted between Jan. 5 and Feb. 10. More than half of the companies in the survey were from Metro Manila.

The BSP had said that there was a strong correlation between results of the BES and the country’s own economic performance. Last year, when the index score for the first quarter fell to its lowest since 2011, growth slowed to 5.7 percent.