MANILA, Philippines - Local businesses are more optimistic this quarter from the previous three months as they expect improved consumer demand buoyed by the holiday season and foresee new projects and expansion plans.
Results of the Bangko Sentral ng Pilipinas' (BSP) latest Business Expectations Survey showed the confidence index at 49.5% for the fourth quarter, an improvement from the 42.5% recorded in July to September.
The improved confidence was owed to an increase in orders and start of new projects leading to higher volume of production, expected increase in consumer demand during the Christmas and palay harvest seasons, and expansion of businesses and new product lines.
Respondents of the survey also cited favorable macroeconomic conditions in the country, particularly low inflation and interest rates, higher foreign investment inflows and the steady stream of overseas Filipinos' remittances, introduction of new and enhanced business strategies, possible further credit rating upgrade for the Philippines, and continued confidence in the administration.
Sentiment of businesses in the country mirrored the improved business outlook in China and India but was far from the weaker prospects in Singapore, South Korea, Hong Kong and New Zealand.
But businesses are less optimistic in the first quarter of next year, as the index dropped to 43.8%.
The decline was blamed to "seasonal slack in demand after the holiday season," the BSP said.
Respondents also said the lack of supply of raw materials and low sugar prices weakened their confidence.
The latest survey was conducted from October 1 to November 15. A total of 1,576 firms were surveyed, with a response rate of 75.1%.