Manila: The economic outlook of Philippine businesses for the next 12 months improved, although confidence in April continued to be affected by the Middle East conflict, results of a Bangko Sentral ng Pilipinas (BSP) survey showed. The survey's results highlighted mixed sentiments among businesses but indicated a generally positive trend over the longer term.
According to Philippines News Agency, the BSP's April Business Expectations Survey (BES) revealed that the three-month-ahead confidence index (CI) improved from -17.3 percent to -7.5 percent, while the 12-month-ahead CI increased from 11.7 percent to 19.5 percent. This suggests that businesses are gradually regaining confidence despite ongoing geopolitical issues.
The BSP noted that firms were less pessimistic about the upcoming three months due to the start of the academic year, which is anticipated to drive demand for loans, financing products, and consumer goods like clothing and apparel. Regarding the 12-month outlook, businesses expressed optimism due to expected stronger demand in sectors such as business process outsourcing, construction, and transportation services.
Respondents also highlighted expectations of higher sales and income, improved economic conditions, and a potential resolution to the Middle East conflict as reasons for their improved outlook. Hiring intentions showed a positive trend, with the three-month-ahead index rising from -0.1 percent to 6.1 percent, while the 12-month-ahead index remained positive at 9.5 percent.
Despite an overall improved outlook, some firms expressed caution. A smaller share of industry firms indicated expansion plans, influenced by elevated fuel prices and heightened uncertainty. For April, the confidence index stood at -35.8 percent, compared to -24.3 percent in March, mainly due to concerns over the Middle East situation, which has kept oil prices elevated.
The BSP also reported that firms are wary of higher inflation potentially increasing operating costs and affecting consumers' purchasing power. The BES, a monthly survey, uses a stratified random sampling method from the Bureau van Dijk (BvD) database of the Top 7,000 Corporations based on total assets in 2017.
The survey results provide an advance indication of changes in overall business activity in the economy, as well as insights into various measures of companies' operations and selected economic indicators. For the April survey round, 507 firms were surveyed nationwide, with 193 companies in the National Capital Region and 314 firms outside the NCR, covering all 18 regions across the country.
