MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) reported yesterday the country’s business confidence continued to slip for the third straight month with the index in the first quarter hitting its lowest level in 10 months.
Based on the Business Expectation Survey conducted by the BSP, the overall business confidence index slid to 39.4 percent in the first quarter from 39.8 percent in the fourth quarter of last year.
This was the lowest level for the business confidence index since hitting 34.4 percent in the third quarter of 2014.
Rosabel Guerrero director of the BSP’s Department of Economic Statistics, explained the sentiment of businesses was negatively affected by the usual slowdown in business activity and moderation of consumer demand after the Christmas holidays and harvest seasons.
Likewise, she said the first quarter is usually the start of the implementation of new business strategies for the year.
Guerrero said businesses are also wary about the rising oil prices and higher cost of raw materials.
According to Guerrero, investors have also adopted a wait-and-see attitude with regard to the economic policy of US President Donald Trump that could affect companies involved in the business process outsourcing (BPO) sector.
The BSP official added sentiment of companies was tempered by expectations of further weakening of the peso against the dollar.
BSP assistant governor Francisco Dakila Jr. said the overall confidence index in the first quarter of the year was broadly steady.
Dakila pointed out the business confidence index normally declines in the first quarter of the year as seen in 2013, 2014, 2015, and 2016.
For the second quarter of 2017, Guerrero reported a higher business confidence index of 41.9 percent compared with the index of 34.2 percent in the fourth quarter.
Guerrero said the more optimistic outlook for the next quarter could be attributed to the anticipated increase in demand during summer due to the expected influx in the number of local and foreign tourists as well as enrollment and harvest period.
She added companies are bullish about sustained increase in orders and projects, the introduction of new and enhanced business strategies as well as the continued infrastructure projects and government spending.
Furthermore, Guerrero said survey results also showed the confidence of businesses under the Duterte administration.