The business sentiment in the Philippines turned less optimistic in the fourth quarter, compared to the third quarter because of elevated inflation, weaker peso, and rising costs of production, results of the latest Business Expectations Survey conducted by the Bangko Sentral ng Pilipinas show.
The overall confidence index in the fourth quarter declined to 23.9 percent from 26.1 percent in the third quarter. The lower index resulted from the increase in the percentage of pessimists, outweighing the increase in the percentage of optimists.
“The respondents’ less optimistic sentiment in Q4 2022 was attributed to higher inflation [i.e., faster increase in prices of consumer goods and services], peso depreciation, decline in sales and demand, rising costs of production inputs, e.g., raw materials and fuel and higher interest rates,” the BSP said.
The business outlook for the next quarter also turned less upbeat as the overall confidence index decreased to 31.3 percent from 43.9 percent a quarter ago. For the next 12 months, the overall confidence decreased for the third consecutive quarter to 46.2 percent following the previous quarter’s survey result of 57.7 percent.