MANILA, Philippines - Business sentiment soared to a two-year high for the fourth quarter amid robust consumer demand during the Christmas season, steady flows of cash remittances from overseas Filipinos and election-related spending, a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.
Rosabel Guerrero, director of the BSP’s Department of Economic Statistics, said the Business Expectations Survey (BES) overall confidence index rose to 51.3 percent in the fourth quarter after dropping to 41.4 percent in the third quarter survey.
“This confidence index – the highest in two years – indicates that more businesses are optimistic about the country’s economic prospects for the last quarter of the year.
This was the highest since the fourth quarter of 2013 when the overall confidence index reached 52.3 percent.
Guerrero said factors for the more optimistic outlook include the expected increase in consumer demand during the Christmas, main palay harvest, and milling seasons.
Likewise, she added respondents also cited sustained increase in sales orders and projects leading to higher volume of production, the expansion of businesses and new product lines as well as introduction of new and enhanced business strategies and processes.
Guerrero said the country’s hosting of the Asia Pacific Economic Cooperation Leaders’ Summit last Nov. 18 and 19 resulted in expectation of brisker business.
Guerrero said the sentiment of businesses in the Philippines mirrored the buoyant business outlook in Australia, Japan, and the Euro area.
BSP Deputy Governor Diwa Guinigundo said the upbeat business sentiment for the fourth quarter was also due to the steady flow of remittances from overseas Filipinos that average $25 billion per year.
Furthermore, Guinigundo said election-related spending for the May 2016 presidential and national elections started to kick in with the television and radio political advocacies of various candidates.
For one, he said the wholesale and retail trade sector was the most bullish for the fourth quarter with the confidence index hitting a record-high at 59.9 percent since the start of the survey in the fourth quarter of 2006.
“Respondents’ views were driven by expectations of generally more robust demand during the Christmas, main harvest and milling seasons. Consumption is anticipated to be propped up by a favorable business environment and the steady inflow of overseas Filipino remittances,” the BSP said.
Likewise, the services sector was also more upbeat with the hotels and restaurants posting the highest confidence index due to the APEC Leaders’ Summit last month.
Financial services also remained buoyant due to higher demand for credit by consumers and increase in remittances from Filipinos abroad during the Holiday season.
Furthermore, industry firm’s outlook turned more buoyant for manufacturing, electricity, gas, and water as well as agriculture sub-sectors.
As expected, Guerrero said the business outlook for the first quarter of next year turned less optimistic with the confidence index at 43.9 percent from 53.1 percent in the current quarter.