Business confidence for first quarter up: BSP

March 28, 2019

Business outlook on the economy improved for the first quarter, with the overall confidence index rising to 35.2 percent from 27.2 percent for the fourth quarter, after declining for four consecutive quarters.

This means that the number of optimists increased and continued to be greater than the number of pessimists during the quarter, the Bangko Sentral ng Pilipinas ( BSP) said Thursday.

According to respondents, the more upbeat outlook was due primarily to expectations of the following: more business activities during the start of the campaign period for the forthcoming midterm elections, increased orders and consumer purchases with the easing of inflation, higher government  infrastructure spending with the “Build, Build, Build” strategy of the current administration, introduction of  new and enhanced business strategies and processes, and expansion of businesses and new product lines.

They were also optimistic that their business operations would benefit from the favorable macroeconomic conditions in the country, particularly lower inflation and interest rates, the BSP said.

Respondents turned more bullish for the second quarter as the confidence index rose to 52 percent from 29.4 percent in the previous quarter.

This next quarter reading is the highest since the fourth quarter of 2016.

Business optimism was heightened on the back of broadly the same factors that were behind the buoyant sentiment  for the first quarter.

In particular, respondents cited the following reasons behind their more bullish outlook: usual increase in demand during summer (in view of the foreseen increase in the number of local and foreign tourists), enrollment and harvest periods, election-related spending in the run-up to the elections in May 2019, sustained increase in orders and projects leading to higher volume of production, and more construction activities (public and private) during the dry season. DMS