Business outlook more upbeat for fourth quarter: central bank survey

November 28, 2017

Business outlook on the economy turned more upbeat for the fourth quarter as the overall confidence index (CI) rose to 43.3 percent from 37.9 percent for the third quarter, a central bank survey said Tuesday.

"This means that the number of optimists increased and continued to be greater than the number of pessimists during the quarter. This quarter’s confidence level is also higher compared to its year-ago level," the survey said.

Their basis were:  (a) expected increase  in orders and consumer purchases during the Christmas holidays, (b) increasing number and expansion of businesses, (c) higher disbursements for the government’s infrastructure and other development projects, (d) favorable macroeconomic conditions in the country, particularly manageable inflation and low interest rates, and (e) expansion of export markets and stronger demand for Philippine products.

For the first quarter of 2018, business outlook turned less optimistic, with the next quarter CI declining to  39.7 percent from 51.3 percent in the previous quarter.

"Respondents attributed their less positive outlook mainly to the usual slowdown of demand after the holiday season," the survey said.

Other reasons cited by companies were lag in business transactions at the beginning of the year (for example, 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 to the automobile industry, and higher inflation. DMS