Rain, Marawi fighting, weak peso dampen business expansion — BSP

Rain blankets a haze over buildings at Eastwood City in Libis, Quezon City, in this undated photo. The Bangkol Sentral ng Pilipinas said rain, the Marawi fighting and a weak peso were dampening business expansion in the third quarter of 2017. INQUIRER PHOTO/RAFFY LERMA

Amid a less buoyant business sentiment in the third quarter, fewer firms in the industry sector expanded operations, the Bangko Sentral ng Pilipinas (BSP) said.

“The percentage of businesses with expansion plans in the industry sector for the third quarter of 2017 decreased slightly to 32.8 percent from 34.6 percent in the previous quarter,” the BSP said in a report.

The BSP’s latest business expectations survey (BES) showed that the overall confidence index (CI) declined to 37.9 percent during the July to September period, the lowest level in three years, mainly due to dampened demand during the rainy season, the ongoing fighting between government forces and ISIS supporters in Marawi City as well as the weaker peso.

In the third quarter, “agriculture, fishery and forestry, and mining and quarrying recorded stronger expansion plans while those of manufacturing, and electricity, gas, and water were slightly lower from a quarter ago,” the BSP said,

In terms of employment, the BSP said businesses’ outlook for the fourth quarter “improved due largely to the more positive sentiment of the services and wholesale and retail sectors offsetting the less optimistic outlook of the industry and construction sectors.”

The third-quarter BES showed higher optimism for the October to December period, as the next quarter CI jumped to 51.3 percent from 42.7 percent in the previous quarter.

Historically, businesses expect more rosy prospects during the Christmas holiday season.

As such, “more firms will continue to hire new employees than those that indicated otherwise” during the fourth quarter, the BSP said. CBB