BSP resumes surveys after Q2 suspension

MANILA, Philippines  — The surveys pertaining to the outlook of Filipino consumers on the country’s future economic conditions as well as the overall sentiment and prospects of businesses are expected to resume this quarter after being called off for the first time due to the coronavirus crisis, the Bangko Sentral ng Pilipinas (BSP) said.

BSP Deputy Governor Francisco Dakila Jr. said both the Consumer Expectations Survey (CES) and Business Expectations Survey (BES) are expected to resume in the third quarter after being suspended for the first time in the second quarter as Luzon was placed under enhanced community quarantine to prevent the further spread of COVID-19.

“The CES and BES will resume and results will be released within the third quarter,” Dakila said.

The CES launched in July 2004 captures the outlook of consumers as an indication of the country’s future economic conditions. It provides an advance indication of consumer sentiments for the current and next quarters and the year-ahead as well as in the selected economic indicators.

On the other hand, the BES launched in the second quarter of 2001 reports the overall sentiment and prospects of the business community through a quarterly survey of firms drawn at random from the list of Top 7,000 corporations based on total assets. The survey results provide advance indication of the direction in overall business activity in the economy and in various measures of companies’ operations as well as in the selected economic indicators.

In an advisory, the central bank said results of the Q2 2020 CES and BES were supposed to be released last June 26.

“This is the first time that both have been suspended,” Dakila added.

Filipino consumers turned less optimistic as the confidence index for the second quarter based on the Q1 2020 CES declined to 9.2 percent from the previous quarter’s 15.7 percent, and for the next 12 months to 19.9 percent from 26.4 percent.

The respondents cited the COVID-19 outbreak as well as natural disasters such as the eruption of Taal Volcano and the onslaught of Typhoon Tisoy late last year for their less upbeat outlook in the second quarter as well as the next 12 months.

The respondents also noted the faster increase in the prices of goods resulting in higher household expenses as well as the low or no increase in income.

Business confidence based on the Q1 2020 BES plunged to its lowest level in a decade, with the confidence index hitting 22.3 percent in the first quarter from 40.2 percent  the previous quarter.

This was the lowest since the index hit 22 percent in the fourth quarter of 2009 due to the global financial crisis.

Businesses turned less optimistic in the first quarter of the year due to the negative effects of the COVID-19 pandemic, the African swine fever (ASF)) outbreak and the Taal Volcano eruption.

The respondents of the survey also cited concerns on government policies, such as termination of Visiting Forces Agreement (VFA), non-renewal of mining rights, and travel ban, among others.

Likewise, businesses also noted decrease in orders and lower volume of business activity and production, seasonal slack in demand after the holiday season as well as low supply of raw materials and products.