Businessmen turned more bullish in the second quarter on higher spending related to the national elections, results of a survey by Bangko Sentral ng Pilipinas show.
“The overall confidence index rose to 48.7 percent from 41.9 percent in the first quarter, indicating that more businesses are optimistic on the country’s economic prospects for the second quarter,” Bangko Sentral said, based on the latest business expectations survey.
Bangko Sentral said respondents were more upbeat due to election-related spending in the run-up to the May 9 national elections; sustained increase in orders and projects leading to higher volume of production; anticipated increase in demand during summer; and introduction of new and enhanced business strategies and processes.
Other reasons for the more bullish outlook were expansion of businesses and new product lines, improving conditions in the local economy and other Asian economies.
“Their more positive outlook was further driven by expectations of more favorable macroeconomic conditions in the country, particularly low inflation and stable interest rates, and sustained foreign investments inflows,” Bangko Sentral said.
Bangko Sentral said the sentiment of businesses in the Philippines mirrored the improving business outlook in South Korea, Canada, France and The Netherlands but was in contrast to the deteriorating views of those in the US, the United Kingdom, Germany, China and Australia.
Outlook for the third quarter remained positive, although the outcome was lower compared to the previous quarter’s results, with the confidence index declining to 45.3 percent from 49.6 percent.
Respondents cited the interruption of business activities during the rainy season, lower consumer demand as households prioritize enrollment expenses and expectations of higher oil prices as some of the reasons for lower optimism.
The survey was conducted on April 1 to May 17, 2016, involving 1,482 companies nationwide.
