Initial muted optimism of PH firms, consumers seen improving for rest of 2020

Businesses are less optimistic about the first quarter of 2020 compared to the current quarter — part of the annual sentiment cycle — but their outlook is expected to improve for the rest of the year, according to the latest survey of the Bangko Sentral ng Pilipinas (BSP).

At the same time, the central bank’s quarterly poll showed that Filipino consumers exhibited a more resilient attitude, with the bulk of individuals expecting to maintain their current level of optimism going into the new year.

Consumer outlook for the next 12 months was less optimistic as the confidence index decreased to 26.4 percent from the third quarter of 2019’s survey result of 29.8 percent for the next 12 months.

In a statement, the BSP said this was due to fears of increase in prices, stagnant wage or incomes, unemployment and increase in household expenses.

The latest Business Expectations Survey was conducted from Oct. 3 to Nov. 25, 2019, among 1,477 firms nationwide, with an 81.6 percent response rate.

The fourth quarter Consumer Expectations Survey was conducted from Oct. 1–12, 2019, with 5,648 respondent households drawn from the Philippine Statistics Authority’s master sample list, and a response rate of 96 percent.

For the first quarter of 2020, the positive business outlook weakened as the next quarter’s confidence index declined to 40.3 percent from the previous quarter’s 56.1 percent.

Respondents’ less favorable outlook for the first quarter of 2020 was “due mainly to expectations of lower consumer demand after the holiday and harvest seasons; a decline in sales and orders; stiffer competition; and other factors like rising prices, concerns over the African Swine Flu epidemic and fishing ban period.”

Business outlook on the country’s economy was more positive for the next 12 months, as the confidence index inched up to 59.6 percent from 58.6 percent in the previous quarter.

The more optimistic outlook of the respondents for the next 12 months was attributed to expectations of sound macroeconomic fundamentals; an increase in consumer demand; higher government spending on infrastructure; development of new product lines or models and marketing and business strategies; business expansion; incoming new projects, clients and prospective customers.

Consumer outlook on economic condition of the country and family financial situation was less favorable over the net 12 months, while family income remained broadly steady compared to the previous quarters’ survey results.

Edited by TSB