Business outlook on the Philippine economy improved for the first quarter of 2019 as indicated by the latest Central Bank of the Philippines’ Business Expectations Survey (BES).
The overall Confidence Index (CI) rose to 35.2 percent from 27.2 percent for fourth quarter of 2018.
The latest figure is the highest level since the second quarter of 2018. “This means that the number of optimists increased and continued to be greater than the number of pessimists during the quarter,” the Central Bank said.
Even though the confidence index declined in four (4) consecutive quarters from first quarter 2018 (39.5%) to fourth quarter 2018 (27.2%), the recent jump in business optimism, as reflected in the latest BES, is due to President Rodrigo R. Duterte’s decisive leadership, Presidential Spokesperson Salvador Panelo said.
“We consider this jump of business optimism as a good indicator of strong business and investor confidence to the decisive leadership of President Rodrigo Roa Duterte and his competent economic team, which resulted in the easing of inflation and higher government infrastructure spending, two of the primary reasons mentioned by respondents for their upbeat outlook,” Panelo said.
Panelo said Duterte wants a strong economy that will provide a comfortable life for all Filipinos.
“The Chief Executive is a man of action and his recent stern resolve to address the challenges that plagued the nation showed that his utmost priority is our people. His leadership style is reflected on his swift action, which is for effecting real and lasting change,” Panelo said.
The BES is a quarterly survey of firms drawn at random from the combined list of the Securities and Exchange Commission’s Top 7,000 Corporations in 2010 and Business World’s Top 1,000 Corporations in 2017.
Results of the BES provide advance indication of the direction of the change in overall business activity in the economy and in the various measures of companies’ operations as well as in selected economic indicators.
The latest BES was conducted from January 22 to March 19 among 1,496 firms.
According to respondents, their more upbeat outlook was due primarily to expectations of the
(a) more business activities during the start of the campaign period for the
forthcoming midterm elections,
(b) increased orders and consumer purchases with the easing of
(c) higher government infrastructure spending with the “Build, Build, Build” strategy of
the current administration,
(d) introduction of new and enhanced business strategies and
(e) expansion of businesses and new product lines.
Respondents were also optimistic that their business operations would benefit from the favorable macroeconomic conditions in the country, particularly lower inflation and interest rates.