Businessmen turned less bullish in the fourth quarter amid the uncertainty in the direction of the government’s foreign policies and sluggish global demand, results of a survey conducted by Bangko Sentral ng Pilipinas show.
Bangko Sentral said the business confidence index fell to 39.8 percent in the fourth quarter from 45.4 percent in the third quarter.
“This indicates that the number of pessimists increased but remained less than that of optimists during the quarter,” Bangko Sentral said in a statement.
“Despite the usual uptick in demand during the Christmas season, business outlook was less buoyant for the current quarter due to perceived concerns over the direction of foreign policies and economic reforms in the country, weakening global demand, foreign exchange losses of importers due to peso depreciation, and lack of supply of raw materials,” Bangko Sentral said.
The survey also showed that for the quarter ahead (first quarter of 2017), business confidence also weakened to 34.5 percent from 56.8 percent in the previous quarter’s survey results.
Respondents attributed their less optimistic outlook for the first quarter next year to the usual slowdown in consumer demand after the holiday season.
Other reasons cited by firms were the direction of foreign policies and economic reforms in the country, stiffer competition with the entry of new players in the market, and the wait-and-see attitude of investors for the coming year following the results of the US national elections which could affect the interest rate movements in the country.
The outlook of businesses involved in international commodity trading”•such as importers, exporters and both importer and exporter”•was less upbeat for the fourth quarter, outweighing the more bullish sentiment of domestic-oriented firms.
The survey was conducted on Oct. 3 to Nov. 17, 2016 involving 1,470 companies nationwide.