MANILA, Philippines – Businessmen are generally pessimistic about their prospects for the first quarter of this year due to the negative impact of the global financial turmoil on the Philippines, results of the latest Business Expectations Survey (BES) of the Bangko Sentral ng Pilipinas (BSP) showed.
The quarterly BES indicated that overall confidence index (CI) of business enterprises dropped to a negative 23.9 percent, the lowest since the first quarter of 2002.
“The overall business outlook was weighed down by concerns over recessionary conditions in many advanced countries, which muted the favorable impact of lower oil and non-oil commodity prices,” Iluminada Sicat, director of the BSP’s Economic Statistics Department said in a press briefing yesterday.
The CI is computed as the percentage of firms that answered positively minus the percentage of firms that answered in the negative with respect to their views on a given indicator. A positive CI indicates a favorable view except for the inflation rate and the peso-borrowing rate where a positive CI indicates the opposite.
The central bank conducted the survey from Jan. 5 to Feb. 11 among 1,410 firms nationwide. Respondents were drawn from the Securities and Exchange Commission 2007 Top 7,0000 corporations.
Respondents expressed concern on weaker economic activities, an increase in the costs of raw materials, delays in credit collection and political noise.
Those involved in international trade such as importers and exporters are generally pessimistic on their outlook for the first and second quarters of the year.
All sectors, except for construction, are bearish about the macroeconomic environment in the first quarter of the year.
The industry sector was the most pessimistic with an index at -30.1 percent due to expectations of weak customer demand arising from reported lay-offs and possible reduction in disposable income.
Similarly, the indeces of wholesale and retail trade as well as the services sectors were recorded at -22.8 percent and -23.2 percent, respectively.
The construction sector, on the other hand, remained upbeat during the period with an index at 2.2 percent.
The construction index, nonetheless, was lower compared to the index recorded during the previous quarter of 6.6 percent. In the first quarter of 2008, the index of the construction sector was recorded at 42.4 percent.
Sicat said this was largely because of the view that the construction of high-rise condominiums and other projects could slow down in the wake of the global financial crisis.
In terms of credit access, private firms across all sectors expect difficult access to credit.
The credit access index slid further into the negative territory for the third consecutive quarter in 2009.
“The CI at -12.8 percent indicated expectations of tighter access to credit. Respondents anticipated that the financial turmoil would make banks more risk averse in the coming months and would likely impose stricter credit standards,” the BSP said. – By Iris C. Gonzales (Philstar News Service, www.philstar.com)