Business outlook on the economy turned more upbeat in the fourth quarter of 2017, with the overall confidence index rising to 43.3 percent from 37.9 percent in the previous quarter, the Bangko Sentral ng Pilipinas said on Tuesday.
“This means that the number of optimists increased and continued to be greater than the number of pessimists during the quarter,” BSP said in a statement. “This quarter’s confidence level is also higher compared to its year-ago level.”
At the same time, however, Philippine businesses expressed less optimism for the new year, with the confidence index declining to 39.7 percent from the previous 51.3 percent.
“Respondents attributed their less positive outlook mainly to the usual slowdown of demand after the holiday season,” BSP said.
Other reasons cited by firms were lag in business transactions at the beginning of the year, like the delay in renewal of contracts and drydock season for the shipping industry, stiffer business competition, concerns on the effect of the new excise tax rates on the automobile industry and higher inflation.
The confidence index is computed as the percentage of firms that answered in the affirmative less the percentage of firms that answered in the negative with respect to their views on a given indicator.
Behind their more buoyant outlook during the fourth quarter of 2017, respondents cited the expected increase in orders and consumer purchases during the Christmas holidays as well as the increasing number and expansion of businesses.
Respondents also expressed optimism over higher disbursements for the government’s infrastructure and other development projects; favorable macroeconomic conditions in the country, particularly manageable inflation and low interest rates, and the expansion of export markets and stronger demand for Philippine products.
BSP noted that the sentiment of businesses in the Philippines mirrored the more bullish business outlook in Australia, Canada, Germany, and Indonesia, but was in contrast to the less favorable views of those in the United States, United Kingdom, Hong Kong, South Korea, New Zealand and Thailand, and steady outlook in France.
Among business types, exporters were the most bullish, maintaining a record-high confidence level for the second consecutive quarter at 50 percent. Likewise, domestic-oriented firms as well as importers were more optimistic.
However, the outlook of dual-activity firms was less upbeat. For the quarter ahead, the sentiment across different types of businesses was less optimistic.
The services and wholesale and retail trade sectors are more confident while industry and construction are less positive. —DAXIM L. LUCAS