Businesses upbeat as economy fully reopens
The full reopening of the Philippine economy has lifted investors’ confidence, results of the first quarter 2023 Business Expectations Survey (BES) of the Bangko Sentral ng Pilipinas (BSP) indicate.
In a briefing on Thursday, BSP Monetary Policy Sub-Sector officer-in-charge Redentor Paolo Alegre Jr. said the confidence index (CI) for this quarter, the second quarter and the next 12 months significantly improved.
Aside from the full reopening of the economy and lifting of all movement restrictions, Alegre also attributed the improvement of business firms’ CI to higher consumer demand for products and services, increased business activities and sustained economic recovery, and expansion and new business opportunities in healthcare, manufacturing and construction sub-sectors.
For the current quarter, the CI rose to 34 from 23.9 in the previous quarter.
CI for the next quarter inched up to 49 from quarter-ago’s 31.3 and the index for the next 12 months increased to 61.9 from 46.2 during the survey in the last quarter of 2022.
The survey was conducted from Jan. 13 to March 6, 2023 and was participated in by around 1,554 firms around the country.
Results of the latest BES also showed that average capacity utilization in the industry and construction sectors inched up to 74.8 percent from quarter-ago’s 72.1 percent.
Access to financing is also expected to be less tight during the quarter although Alegre said the index for this remains on the negative.
In terms of several economic indicators, survey results also indicate that business firms expect the peso to strengthen against the US dollar, and for the peso borrowing and inflation rates to go up.
He said that while the respondents expect inflation to remain above the government’s 2 to 4 percent target band until 2024, “inflation expectations among businesses may ease in the near term as the number of respondents who expected higher inflation declined compared with the Q4 2022 survey results.”