MANILA, Philippines -
The latest Business Expectations Survey showed a confidence index of 48.3 percent from a three-year low of 34.4 percent in the third quarter.
The improvement in the sentiment was driven by the expected increase in consumer demand amid the holiday season, and a sustained growth in orders and projects, the BSP said.
The respondents also cited the expansion in businesses and product lines, and also the introduction of new business strategies and processes for their more optimistic outlook.
At the same time, the central bank said the acceleration of the roll-out of the Aquino government’s public-private partnership projects gave local firms confidence during the period.
The favorable macroeconomic conditions of the country stemming from the stable inflation, low interest rates, sustained foreign investment flows, and continuous remittances also helped improve the outlook of local businesses.
The sentiment of local firms was the same as those in Canada, New Zealand, and Hong Kong, but was in contrast with the weaker outlook of businesses in the US, United Kingdom, Germany, China, Singapore, and India.
Across sectors, the confidence index was higher in the fourth quarter than in the third quarter on expected improvement in economic activities.
The BSP said the wholesale and retail trade sector was the most bullish this quarter, followed by the services sector.
Construction firms were also optimistic this quarter due to foreseen acceleration in activities for both public and private projects before the year ends. Industry firms, meanwhile, also had an upbeat outlook due to ongoing projects and orders.
For the next quarter, the confidence index slid to 43.1 percent on seasonality, the BSP said.
“Respondents attributed their less sanguine outlook for Q1 2015 to the typical downturn in demand after the holiday season,” the BSP said.
“Other reasons cited by firms were concerns over the backlog in deliveries caused by the port congestion problem and a looming power crisis as well as uncertainties in the global economy, particularly emanating from Europe and Japan,” the central bank added.