PH firms at their most bullish since COVID-19 hit, says BSP survey

Philippine companies are at their most optimistic since the COVID-19 pandemic hit the country in the first quarter of 2020, according to the latest quarterly edition of the Bangko Sentral ng Pilipinas’ (BSP) Business Expectations Survey (BES).

The fourth quarter 2021 BES showed that business confidence in their prospects over the next 12 months improved to 68 percent from just 48 percent in the third quarter this year.

For this quarter alone, businesses turned optimistic (40 percent) from pessimistic (-6 percent) in the third quarter.

Redentor Paolo Alegre Jr., senior director at the BSP’s Department of Economic Statistics, said in a press briefing the business outlook for the present quarter was at “the highest level since the onset of the COVID-19 pandemic” in the country in the first quarter of 2020.

The business confidence index is computed as the percentage of firms that answered positively minus the percentage of those that answered negatively with respect to their view on indicators such as the outlook on their operations and access to credit, the foreign exchange rate, and inflation.

The fourth quarter 2021 BES was conducted from Oct. 8 to Nov. 18 and covered 1,511 firms surveyed nationwide, of which 584 companies are in Metro Manila and 927 firms elsewhere.

Positive index

The positive business index was attributed to the easing of COVID-19 restrictions and opening of borders; increase in demand and sales; continuous vaccine roll out; seasonal factors such as the uptick in demand during the holiday season as well as the start of mining and milling seasons; and the decreasing number of COVID-19 cases.

“The release of positive economic news, such as the real GDP performance for [the third quarter of] 2021, may have also influenced the more sanguine business expectations,” Alegre said.

Consumer confidence, however, worsened to 24 percent in the fourth quarter from 19 percent in the third quarter, although a lot better than in the third quarter of 2020 (-48 percent).

This was according to the BSP’s fourth quarter Consumer Expectations Survey (CES), which was done on Oct. 1 to Oct. 13 and covered 5,665 households—2,802 were in Metro Manila and 2,863 from outside the region.

The consumer confidence index is computed as the average household perception across three indicators—economic condition, their financial situation, and their income.

Better expectations

Their weaker outlook on the present quarter was brought about by their expectations of higher unemployment rate; low income; ongoing COVID-19 pandemic, higher cases, and restrictions/lockdown/travel ban; faster increase in the prices of goods; and fewer working family members.

Regarding consumers’ better expectations over the next four quarters, Alegre said this was based on expectations of the availability of more jobs and permanent employment; additional and high income; effective government policies and programs; and good governance.

“(T)he percentage of households in the country that considered the next 12 months as a favorable time to buy big-ticket items grew to 5.1 percent from 4.1 percent in the [third-quarter] 2021 survey result.