Filipino businessmen and consumers turned less bullish in the fourth quarter amid high prices, results of two surveys conducted by the Bangko Sentral ng Pilipinas show.
“The results of these two surveys are the results of many factors coming together,” Bangko Sentral Deputy Governor Diwa Guinigundo said in a news briefing Thursday.
The business outlook on the economy turned less optimistic, with the overall confidence index dropping to 27.2 percent from 30.1 percent in the quarter. It was also the lowest level since the first quarter of 2010.
Results showed that despite the expected uptick in demand during the holiday season, the business outlook was less buoyant because of higher inflation, driven by rising raw material costs and global oil prices, weaker peso, higher interest rates, decrease in volume of sales and orders and lack of supply of raw materials.
Inflation peaked at a nine-year high of 6.7 percent in October, before easing to 6 percent in November.
Businessmen expect the less bullish business conditions to continue in the next quarter, as the index declined to 29.4 percent from 42.6 percent in the third quarter. This was also the lowest next-quarter reading since the third quarter of 2009.
Respondents attributed their weaker outlook for the next quarter to the usual slowdown in demand after the holiday season. Their sentiments were tempered by expectations of a weak peso that could increase the costs of imports and contribute to higher inflation and interest rates.
Meanwhile, the consumer confidence index declined to -22.5 percent in the fourth quarter from -7.1 percent in the third quarter. This was the lowest reading since the fourth quarter of 2014 and marked the largest drop of 15.4 percentage points since the nationwide survey started in the first quarter of 2007.
Respondents said among the reasons for the decline in confidence index were higher prices of commodities, low salary and income, increase in household expenses, no increase in income and upsurge in the number of unemployed persons.
They also cited the occurrence of typhoons and calamities during the period.
The consumer expectation survey was conducted on Oct. 1 to 13, covering 5,609 households nationwide. The business expectations survey, meanwhile, covered 1,463 firms and was conducted on Oct. 1 to Nov. 23.