Local businesses expect to gain momentum in economic activity for the second quarter as indices for volume of sales, net profit and inventory showed marked improvement from the first quarter, according to the latest result of the D&B Business Optimism Index (BOI) produced by the leading global information provider Dun & Bradstreet (D&B).
The survey conducted by the world’s leading business information provider Dun & Bradstreet last March 1 to12 this year involving 251 firms aims to establish the BOI of the country. It is a quarterly measure of the optimism of business leaders and owners in a country based on six parameters — volume of sales, net profits, selling prices, new orders, inventories and employes.
The bright prospects validate widespread expectation of economic gains amid heavy election spending along with the rush to complete government-funded infrastructure projects, continuing growth in overseas Filipino workers (OFWs) remittances, increase in exports and the relatively tame inflation outlook at 4.3 percent to 4.6 percent (year-on-year) for the quarter.
On the other hand, prices are seen to remain steady with selling price across all sectors registering a 7-point decline from +17 percent in the first quarter to +10 percent in the second quarter. This is mainly due to a decline in the pricing of the manufacturing sector (non-durables) likely as a result of global free trade agreements, the survey showed.
The latest BOI showed that for the second quarter, volume of sales, net profit and inventory improved by 4, 8, and 10 points, respectively, from the first quarter level.
The foreseen gains in sales also translated into a more positive outlook towards net profits and inventories.
These expectations were supported by positive indices in expected orders, selling prices, and employment, even though these latter set of indices showed a slowdown (5, 7, 12 points, respectively) from the previous quarter.
Thus, while the top and bottom line outlooks brightened, selling price hikes, new orders build-up and employment gains are likely moderate.
The release of the index results marked the official launch by D&B Asia Pacific Partnerships of the Philippine BOI which measures business confidence in the economy and is designed to capture business expectations.
It is considered as one of the most effective ways to track how the business community perceives the business environment, and where they think it is moving.
D&B, the world’s leading business information provider, produces the BOI every quarter. Each quarter, at least 200 business owners and senior executives in major industry sectors across the country are asked if they expect increases, decreases or no changes in their upcoming quarterly Volume of Sales, Net Profit, Employment, New Orders, Inventories and Selling Prices.
The index relies on Dun and Bradstreet’s extensive and up-to-date commercial database of business information gathered from over 150 million companies covering more than 200 countries. –Daily Tribune
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