Businesses turned less bullish in the third quarter, results of a survey conducted by the Bangko Sentral ng Pilipinas show.
The business confidence outlook on the economy remained positive at 37.3 percent in the third quarter, slightly down from 40.5 percent in the second quarter.
The BSP said the lower confidence index could be attributed to seasonal factors such as then slack in the demand and slowdown of business activities during the rainy season, the decline in orders leading to lower sales, lack of supply of raw materials, perceived unfavorable effects of various government policies such as the Rice Tariffication Law and banning of provincial buses on EDSA and stiffer competition.
“The lower but positive confidence index means that the number of optimists declined but continued to be greater than the number of pessimists for Q3 2019,” the BSP said.
The confidence index is computed as the percentage of firms that answered in the affirmative less the percentage of firms that answered in the negative with respect to their views on a given indicator.
It said the sentiment of businesses in the Philippines mirrored the less buoyant business outlook in Bulgaria, Croatia, Germany, India, and Norway. However, business sentiments in Australia, Brazil, Canada, Chile, France, Greece, Hungary, Israel, and Ukraine were more optimistic.
Results of the survey showed that for the fourth quarter 2019, the business outlook turned more upbeat as the confidence index climbed to 56.1 percent from the second-quarter survey result of 47.6 percent.
“This was the highest next quarter confidence index since Q4 2016. Respondents’ more positive outlook for Q4 2019 was due to expectations of higher consumer demand during the holiday and harvest seasons, continued increases in orders and projects, more favorable macroeconomic conditions [i.e., lower inflation, stable exchange rate and lower interest rate], higher government spending/infrastructure and business expansion,” the BSP said.
The third-quarter business expectations survey was conducted on July 10 to Sept. 10, 2019, involving 1,487 firms nationwide.
Meanwhile, the consumers’ confidence index in the third quarter rebounded to the positive territory at 4.6 percent from -1.3 percent in the second quarter of 2019.
The respondents’ optimistic outlook during the period was attributed to their expectations of improvements in the peace and order situation, availability of more jobs, additional and high income and good governance.
“The positive index indicates that the optimists outnumbered the pessimists for Q3 2019,” the BSP said.