Business sentiment in the country turned positive in the fourth quarter amid the easing of COVID-19 restrictions and the faster pace of the vaccination rollout, latest results of the Business Expectations Survey conducted by the Bangko Sentral ng Pilipinas show.
The BSP said that in the fourth quarter, the overall confidence index reverted to the positive territory at 39.7 percent―the highest level since the onset of the COVID-19 pandemic in the first quarter of 2020―from -5.6 percent in the third quarter of 2021.
The positive index resulted from the combined effects of the increase in the percentage of optimists and the decrease in the percentage of pessimists.
“The respondents’ optimism was attributed to the easing of COVID-19 restrictions and opening of borders, increase in demand and sales, continuous vaccine rollout leading to herd immunity, seasonal factors such as the uptick in demand during the holiday season and start of mining and milling seasons, as well as decreasing number of COVID-19 cases,” the BSP said.
It said the release of positive economic news, such as the real GDP growth of 7.1 percent in the third quarter, might have also influenced the more sanguine business expectations.
The BSP said that for the next quarter, the business sentiment improved as the overall confidence index increased to 52.8 percent from 31.9 percent a quarter ago. For the next 12 months, business sentiment was also more optimistic as the overall confidence index increased to 67.6 percent from previous quarter’s survey result of 56 percent.
The BSP said that unlike the business sentiment, the consumer sentiment weakened in the fourth quarter of 2021, although more optimistic for the first quarter of 2022 and the next 12 months.
Based on the latest Consumer Expectations Survey, the consumer confidence index declined in the fourth quarter to -24 percent from –19.3 percent in the third quarter.
“According to respondents, their weaker outlook during Q4 2021 was brought about by their expectations of higher unemployment rate, low income, ongoing COVID-19 pandemic, higher cases, and restrictions/lockdown/travel ban, faster increase in the prices of goods, and less working family member,” the BSP said.
Consumer sentiment for the first quarter of 2022 and the next 12 months improved as the confidence index increased to 9.3 percent and 23.6 percent, respectively from the third quarter 2021 survey results of 2.7 percent and 18.6 percent.
Respondents attributed their optimism in the next quarter to the expectations of availability of more jobs and permanent employment, additional and high income, effective government policies and programs, and good governance.
The Q4 2021 Business Expectation Survey was conducted from Oct. 8 to Nov. 18 involving 1,511 firms nationwide, while the Q4 2021 Consumer Expectation Survey was conducted from Oct. 1 to 13 involving 5,665 households.