Business confidence up, consumer sentiment down
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Fri, 20 Dec 2019 17:27:44 +0000
THE country’s business outlook improved in the fourth quarter despite less optimistic consumer sentiment, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
The results of the central bank’s latest Business Expectations Survey put the October-to-December confidence index (CI) — computed as the percentage of companies that answered in the affirmative minus those who replied otherwise — at 40.2 percent, up from 37.3 percent three months earlier.
“This was reflective of the higher increase in the percentage of optimists, which outweighed the increase in the percentage of pessimists from the previous quarter’s survey results,” Fernando Silvoza, BSP Department of Economic Statistics officer in charge, said in a briefing.
Respondents attributed the optimistic sentiment for the quarter to higher consumer demand during the holiday and harvest seasons; increase in sales, orders and projects; more favorable macroeconomic conditions, such as higher gross domestic product growth and lower inflation and unemployment rates; higher government spending, mainly in infrastructure; and business expansion.
“Firms also cited the anticipated positive impact of the country’s hosting of the 2019 Southeast Asian Games, such as [the] availability of more jobs and increase in consumer spending,” Silvoza said.
The survey, which polled 1,477 companies nationwide, was conducted from October 3 to November 25.
Silvoza also highlighted that the overall consumer confidence index for the period dropped to 1.3 percent from 4.6 percent in July to September.
“The lower but still positive CI was reflective of the combined decline in the percentage of optimists and increase in the percentage of pessimists compared to third quarter 2019 survey results,” he said.
Respondents attributed their less favorable outlook to higher prices of commodities, low or no increase in salary or income, increase in household expenses, and high unemployment rate.
The latest Consumer Expectations Survey, which measures sentiment about the country’s economic condition, family financial situation and family income, was conducted from October 1 to 12. It covered 5,648 households nationwide.
Business and consumer outlooks for the next three months, however, became less optimistic, according to Silvoza.
Firms were less upbeat for the first quarter of 2020, with the index at 40.3 percent, down from 56.1 percent three months earlier.
Silvoza also said respondents’ less favorable outlook was mainly because of expectations of lower consumer demand after the holiday and harvest seasons; decline in sales and orders; stiffer competition; and other factors, such as rising prices, concerns over the African Swine Flu epidemic and the fishing-ban period from December 1 this year to March 1 next year.
Business outlook was more positive for the next 12 months, as the CI inched up to 59.6 percent from 58.6 percent in the previous quarter, he added.
This outlook was attributed to expectations of sound macrofundamentals, such as more stable economic growth and lower inflation and interest rates; increase in consumer demand; higher government spending on infrastructure; development of new product lines or models and marketing and business strategies; business expansion, and incoming new projects, clients and prospective customers.
The less-optimistic consumer sentiment, meanwhile, was carried over to the next three months, with the Cl dropping to 15.7 percent from 15.8 percent previously.
The index for the next 12 months also fell to 26.4 percent from 29.8 percent a quarter ago.