Business confidence eases in Q1

MANILA, Philippines - Business sentiment declined in the first quarter of 2015, dampened by the seasonal moderation in economic activity, the Bangko Sentral ng Pilipinas reported yesterday.

The latest Business Expectations Survey showed a confidence index of 45.2 percent, down from 48.3 percent in the fourth quarter of last year.

The central bank said the less upbeat sentiment was due to the usual slowdown in activity and moderation of consumer demand after Christmas and also because of the typhoons that hit the country late last year.

Moreover, firms cited “concerns over the backlog in deliveries caused by the port congestion problem, and lack of supply of fish due to Indonesia’s stricter new marine laws which limit the fishing ground of local fisherman and closed fishing season for sardines” for the weaker outlook this quarter.

The survey showed firms involved in international trading had optimistic outlook this quarter, while domestic-oriented firms and importers had less favorable expectations versus the previous three months.

“The less sanguine outlook of the wholesale and retail trade sector stemmed from expectations of a slack in consumer demand and business activities after the Christmas season, their concern over the continued effects of past natural calamities, particularly on agriculture, and stiffer domestic competition emanating from the construction of new malls,” the BSP said.

The service sector, meanwhile, was less optimistic this quarter due to the seasonal slack in demand for hotels and restaurants especially after the holiday season.

But the industry sector was more upbeat in the first quarter especially the manufacturing subsector due to continued projects and bookings and the sustained decline in pump prices that cut their costs.

The BSP added the construction sector was the most bullish this quarter due to the falling oil prices and sustained demand for their services with new projects in the pipeline in the private and public sector.

For the next quarter, the confidence index climbed to 58.2 percent, suggesting acceleration in domestic growth, the BSP said.

The “anticipated increase in demand during the secondary harvest and open fishing seasons, graduation and enrollment periods, and summer seasons with the expected influx of both local and foreign tourists,” were among the reasons the bullishness.

Moreover, the central bank said the sustained increase in orders and projects, expansion of business, enhanced strategies and processes were also cited by local firms for the upbeat outlook in the second quarter.

The latest BES, conducted from Jan. 5 to Feb. 10, surveyed a total of 1,523 firms.