No. 12 06.30.14
PHL business confidence up in Q2
The Philippine businesses turned more positive on the overall economy for the second quarter with the overall confidence index (CI) growing by 50.7% from 37.8% in the first quarter.
The CI improvement was credited mainly to the robust consumer demand during the secondary harvest season. Part of the improvement was also attributed to the graduation and enrolment periods and the summer season where more local and foreign tourist arrivals were usually noted.
Rehabilitation projects for Typhoon Yolanda-affected areas were also factored in. In addition, higher orders and new contracts that in turn lead to higher volume of production, local and foreign business expansions , and continuing confidence in the Aquino administration, contributed to the CI improvement.
“The country’s strong macroeconomic fundamentals such as manageable inflation and steady growth of remittances as well as more favorable external conditions with the recovery of global markets support the positive business outlook,” according to Bangko Sentral ng Pilipinas (BSP).
For 2014’s third quarter, businesses were projected to continue economic expansion as the next quarter’s CI remained high at 48.9% .
The BSP said that investors remained upbeat on the economy because of “more optimistic outlook of firms in the wholesale and retail trade and construction sectors given their expectations of briskier demand at the start of the school year and new expansion projects in power generation, telecommunications, and building of highways.”
Businesses also expected that commodity prices are likely to remain well-anchored at 4% in the second quarter and 4.1% in the third quarter.
Meanwhile, more respondents expected the peso to appreciate in the second and third quarters of this year. Their views were based on the sustained remittance inflows from overseas Filipinos’ (OFs), and increased foreign portfolio, direct investments, and merchandise exports.
Some 1,529 firms nationwide participated in the survey covering the 1 April–14 May 2014 period.