Home Business News Business, consumer sentiments improve in Q1

Business, consumer sentiments improve in Q1

By: Joann Villanueva

 

MANILA — Business and consumer sentiments both improved during the first quarter of 2019 generally due to better outlook on the domestic economy.

In a briefing Thursday, Bangko Sentral ng Pilipinas (BSP) Department of Economic Statistics (DES) Director Redentor Paolo M. Alegre said the Consumer Expectations Survey (CES) shows that the confidence index in this quarter remains in the negative territory at -0.5 percent but posted a big leap from the -0.22.5 percent in the previous quarter.

Respondents of the quarterly nationwide survey, done between February 5-16 for this quarter, identified additional or high income, improvement in peace and order, availability or more jobs; and good governance as the reasons behind their improved outlook.

Outlook for the next quarter and year-ahead also improved.

Results of the latest survey showed that index for the next quarter traversed to positive territory at 10.7 percent from -0.8 during the survey in the last quarter of 2018.

Index for the year-ahead is 28.4 percent from 10.7 percent in the previous survey.

Amid the improved outlook, respondents expect inflation and interest rates to go up and for the peso to depreciate against the US dollar during the next 12 months.

BSP Deputy Governor Diwa Guinigundo, during the same briefing, said improvement of the CES index this time around was the largest quarter-on-quarter change to date.

He attributed this to post Christmas holiday season sentiments, the summer or dry season, which is advantageous to construction activities; improvement of peace and order situation, availability of more jobs, and good governance.

He explained that some people may question results of the survey, which seems to suggest an improvement in the peace and order situation, but stressed that it honestly reflects the respondents’ answers.

Respondents were given several options as their answers, and they will simply indicate what they think is the best answer.

“People may argue against this because of the different type of crimes that are reported in media but this is what the respondents are saying. They perceive an improvement in peace and order,” he said.

Relatively, index for the Business Expectations Survey (BES) got better at 35.2 percent from 27.2 percent in the survey done in the last quarter of 2018.

Reasons cited by the respondents include more business activities in line with the election period, higher orders and consumer purchases due to decelerating inflation, higher government spending on infrastructure, introduction of new and enhanced business strategies and processes, and expansion of business and new products.

Guinigundo said this improvement was also posted by the quarter-ahead index from 29.4 percent to 52 percent, which is the highest level since the last quarter of 2016.

He is optimistic that results of this quarter’s BES and CES will be sustained in the next quarter.

“I think both surveys will indicate firmer and better sentiment, more optimistic sentiment. The negative confidence index for the Consumer Expectations Survey may not move to positive territory,” he said.

He, however, pointed out that risks remain and these include the El Nino phenomenon, which authorities expect to last until the early part of the third quarter, and the rising oil prices in the international market.

“All told that could also impact on expectations by both the consumers and businesses,” he added. (PNA)

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