Businessmen turned less bullish in the third quarter on lower sales and higher prices of raw materials, results of a Bangko Sentral ng Pilipinas survey show.
The Business Expectations Survey said the overall confidence index declined to 35.8 percent in the third quarter from 40.8 percent in the second quarter.
“The firms’ less optimistic sentiment in the current quarter was attributed to decline in sales and demand for goods and services mainly due to weather-related disruptions and other seasonal factors; higher prices of raw materials and production costs; elevated inflation and interest rates, and peso depreciation,” the BSP said Friday.
The business sentiment for the fourth quarter of 2023 and the next 12 months was more upbeat as the overall index increased from the previous quarter’s survey results, it said.
The Consumer Expectations Survey showed that consumer sentiment for the third quarter improved marginally as the overall confidence index turned slightly less negative at -9.6 percent from -10.5 percent in the second quarter.
“Consumers attributed their less pessimistic sentiment for Q3 2023 to more available jobs and permanent employment; higher income from wages/salaries, remittances, and other sources; and additional working family members,” the BSP said.
It said for the fourth quarter of 2023, the consumer sentiment also improved, the index rising to 7.8 percent from 4.6 percent a quarter ago.
The consumer confidence index for the next 12 months declined to 18.9 percent from 20.5 percent in the second quarter.
Meanwhile, Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. said Friday an interest rate hike is possible in November 2023 and it may not be the last one in its tightening cycle, given the persistent elevated inflation.
“We are not convinced it will be the last one in the cycle… We are still on a hawkish stance,” Remolona said in an interview on Bloomberg TV.
He said the Monetary Board opted for a fourth pause on Thursday although the latest inflation figure came in higher than the previous one. Inflation in August 2023 rose to 5.3 percent from 4.7 percent in July.
“It was not enough to hike this time ,but upside risks were higher than usual… [There is a] good chance [to hike] next time…We will watch the numbers,” Remolona said.
He said the two biggest factors that could stoke inflation further are the transport fare hikes and the higher electricity rates. “These two things could add to the inflation forecast for 2024,” he said.