Businessmen are less optimistic in the third quarter of the year mostly due to the weak peso and the declaration of martial law in Mindanao, a survey conducted by Bangko Sentral ng Pilipinas shows.
The Third Quarter Business Expectations Survey showed the business confidence index fell to 37.9 percent in the third quarter from 43 percent a quarter ago.
Reasons cited for the drop were seasonal factors such as slowdown of business activities during the rainy season, slack in demand during the planting and closed milling season, as well as the closed fishing season in Davao Gulf, Marawi crisis and the declaration of martial law in Mindanao, weakening peso, increasing prices, stiffer competition and damages and power outages caused by the July earthquake in the Visayas.
“The sentiment of business in the Philippines mirrored the less buoyant business outlook in the US, Canada, The Netherlands, New Zealand, and Thailand but was contrast to more more bullish views of those in Germany and Hong Kong and steady outlook in France.
The business outlook turned more positive in the fourth quarter as the next quarter confidence index rose to 51.3 percent from 42.7 percent in the previous quarter’s survey results.
The Bangko Sentral attributed the respondents’ more positive outlook for the fourth quarter to the uptick in consumer demand during the holiday, harvest and milling seasons, continued rollout of government infrastructure and other development projects and increase in orders and projects translating into higher volume of production.
“The sentiment of business involved in international commodity trading was broadly less favorable for the third quarter as importers and domestic-oriented firms expected lower consumer demand during the rainy season,” the central bank said.
The outlook of exporters, meanwhile, was more optimistic for the current quarter, while that for imports and domestic-oriented firms turned more robust compared to that of the previous quarters.
The Bangko Sentral conducted the survey from July 3 to August 18, covering 1,480 companies nationwide.