BUSINESS sentiment remained positive in the first quarter this year but lower compared with the last quarter of 2015, results of the latest survey conducted by the Bangko Sentral ng Pilipinas show Friday.
The Business Expectations Survey for the first quarter showed that sentiment dropped to 41.9 percent from 51.3 percent in the fourth quarter last year.
Reasons cited for the decline were the usual slowdown in business activities and moderation of consumer demand after the Christmas season, decline in global commodity prices, continued weakness in Chinese economy, and the prevailing wait-and-see attitude of most businesses before the results of the national elections in May.
Other reasons were the adverse effects of El Niño dry spell, strong market competition and the bearish trend of the domestic stock market.
However, the second-quarter outlook turned more bullish compared to a quarter ago. Data showed that business sentiment stood at 49.6 percent. This was due to the expected robust election-related spending in the run-up to the elections in May, sustained increase in orders and projects leading to higher volume of production, and anticipated increase in demand during the summer season with the expected influx of both local and foreign tourists.
Other reasons were the enrollment periods, introduction of new and enhanced business strategies and processes and expansion of businesses and new product lines.
Across different types of businesses, the sentiment was mixed for the first quarter. The outlook of importers and domestic-oriented firms was less sanguine, while exporters and dual-activity (both importer and exporter) firms’ outlook was more positive.
Bangko Sentral conducted the nationwide survey from Jan. 5 to Feb. 17 involving 1,539 firms.
Economists from the First Metro Investment Corp. and University of Asia and the Pacific, meanwhile, said in a joint report Friday economic growth was expected to accelerate further in the first quarter this year from 6.3 percent in the last quarter of 2015 due to robust consumer and election spending.
“As expected, the second half of 2015 GDP growth accelerated, giving us greater optimism that 2016 would even be better, especially considering that it is an election year,” the report said.
“We think GDP should expand at a faster pace in Q1-2016 as the government keeps the taps open as election day nears, consumer spending still strong, especially when compared to a fairly low base in the same quarter last year,” the economists said.
However, they said the economy should slow down in the third quarter then resume its robust growth in the fourth quarter.
The Philippine economy expanded 6.3 percent in the fourth quarter, bringing the full-year average to 5.8 percent, lower than 6.1 percent a year ago and the 7 percent to 8 percent target range by the government.
