Despite pandemic, PH business leaders turn upbeat about Q4

The latest business confidence survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed that local businessmen are optimistic about the fourth quarter of 2021, and even more upbeat about the next 12 months—an improvement over the more pessimistic view held by the same respondents for the current quarter.

According to the BSP’s latest Business Expectations Survey results, Filipino businessmen remained optimistic for the next quarter as the overall confidence index increased slightly to 31.9 percent from 31.4 percent a quarter ago.

More importantly, for the next 12 months, business sentiment was more optimistic as the overall confidence index increased to 56 percent from previous quarter’s survey result of 52.5 percent.

Despite being generally upbeat, the survey showed that businessmen were mostly concerned about the ongoing COVID-19 pandemic and its protracted adverse effects to their businesses; the reimposition of enhanced community quarantine scheme last August particularly in Metro Manila; the decrease in sales, orders, and income; concerns over government policies, particularly the actions to curb the spread of COVID-19 and its Delta variant; and higher prices of raw materials like steel, wood liner, glue and other commodities.

Outlook

For the fourth quarter of 2021, the outlook of importers and domestic-oriented responding firms were more optimistic, while that of exporters and dual-activity firms were less buoyant.

For the year ahead, the improved business sentiment persisted across the different types of respondent trading firms as the indices were higher than the previous survey results, except for the dual-activity firms whose positive outlook was relatively steady.

Business outlook across all sectors remained in the positive territory for the last three months of the year, but at varying degrees. Business sentiment in the industry, construction, and wholesale and retail trade sectors was more buoyant for the next quarter. Likewise, the confidence index across all sectors for the next 12 months was more positive.

For the fourth quarter, the outlook on the volume of business activity was less optimistic due to the waning outlook of the construction, wholesale and retail trade, and services sectors. Meanwhile, the outlook on the volume of business activity for the next 12 months was more upbeat on account of the improved outlook of the industry, construction and services sectors.

The latest Business Expectations Survey was conducted during from July 22 to Sept. 15, 2021. There were 1,511 firms surveyed nationwide, consisting of 584 companies in the National Capital Region and 927 firms in areas outside Metro Manila, covering all 16 regions nationwide.

Samples were drawn from the Top 7,000 Corporations ranked based on total assets in 2016 from the Bureau van Dijk (BvD) database.

The nationwide survey response rate for this quarter was higher at 60.6 percent from 66 percent in the previous edition of the survey. The data collection was done amid the heightened mobility restrictions which might have affected the response rate, the central bank said.