Business confidence upbeat in Q4 —BSP survey

Philippine economic outlook turned more upbeat in the fourth quarter of the year and lifted the level of business confidence to the highest in six quarters, results of the latest Bangko Sentral ng Pilipinas (BSP) Business Expectations Survey showed Tuesday.

The overall confidence index (CI) hit 43.3 percent in October to December, from 37.9 percent in the third quarter and compares with 39.8 percent registered in the fourth quarter of 2016.

It was the highest since the CI registered at 45.4 percent in the third quarter of 2016.

"This means that the number of optimists increased and continued to be greater than the number of pessimists during the quarter," BSP Department of Economic Statistics director Rosabel Guerrero said in a briefing at the central bank headquarters in Manila City.

The CI is computed as the percentage of firms that answered in the affirmative, minus the percentage of firms that answered in the negative with respect to their views on a given indicator.

Guerrero said a more favorable outlook of companies was due to the following factors:

• Expectations of more orders and consumer purchases during Christmas holidays

• Increasing number and expansion of businesses

• Higher fiscal spending on infrastructure and other development projects

• Favorable macroeconomic conditions—manageable inflation, low interest rates

• Expansion of export markets and stronger demand for Philippine products

Issues such as President Duterte's supposed intention to establish a revolutionary government, allegations of extrajudicial killings in the war on drugs, and impeachment complaint against Chief Justice Maria Lourdes Sereno were not mentioned by the survey respondents, said BSP Deputy Governor for Monetary Stability Sector Diwa Guinigundo.

"The most that you can conclude with the non-inclusion of those factors is that it is not something that they consider when they make their business decision whether to expand, employ more people," Guinigundo said.

But the economic outlook has turned less positive for the first quarter of 2018 with the CI dropping to 39.7 percent from 51.3 percent in the previous quarter's survey results.

Respondents with "less optimistic" outlook cited the following expectations:

• Seasonal slowdown in demand after the holidays

• Lag in business transactions at the beginning of the year

• Stiffer business competition

• Concerns about the impact of new excise tax rates on automobiles and higher inflation

The fourth quarter survey was conducted on October 2 to November 20 with 1,473 companies surveyed nationwide. Respondents were culled from the Securities and Exchange Commission list of Top 7,000 corporations in 2010 and Business World's Top 1,000 corporations in 2015. — VDS, GMA News