Businesses are more optimistic about the country’s economic prospects for the second quarter of the year, as consumer demand is expected to pick up and government spending accelerates, according to the Bangko Sentral ng Pilipinas (BSP).
In its latest Business Expectations Survey (BES), the overall confidence index (CI) is seen rising to 47.2 percent, from 34.5 percent in the last quarter’s survey.
“The next quarter CI suggests that economic growth could accelerate for the next quarter,” the BSP report read.
The BSP said respondents cited the following factors as reasons behind their more optimistic outlook: anticipated increase in demand during summer and sustained increase in orders and projects leading to higher volumes of production.
Also, the expansion of businesses and new product lines and the introduction of new and enhanced business strategies and processes were cited by respondents as sources of their optimism.
For the first quarter, the BES showed that business optimism on the economy was broadly steady, with the overall CI declining slightly at 39.4 percent, from 39.8 percent for the fourth quarter of 2016.
“This means that the optimists continued to outnumber the pessimists but the margin was almost unchanged that of a quarter ago,” the BSP said. The central bank said respondents had reported that they were negatively affected by the usual slowdown in business activity and moderation of consumer demand after the holiday and harvest seasons.
The increase in oil prices and the higher cost of raw materials, the wait-and-see attitude of investors with regard to the economic policy of the Trump administration and expectations of peso depreciation also tempered the sentiment of firms.
The outlook of local firms for the Philippine economy in the first quarter mirrored that of businesses in France and the Euro area.
Meanwhile, the BSP said an even less optimistic outlook was registered by businesses in China, Hong Kong SAR, Thailand, Canada and Germany, while more buoyant views were reported by those in the US, the UK, South Korea and the Netherlands.