MANILA: Despite stellar economic growth in the first half of this year, the local business community’s confidence is down for the third quarter, according to the Bangko Sentral ng Pilipinas. The Q3 Business Expectation Survey (BES) released on Friday, August 26, showed that the overall confidence index (CI) declined to 45.4% from 48.7 % in the Q2 2016 survey.
While the number of optimists declined, they still still outnumbered pessimists during the quarter. The BSP also pointed out that it was the highest third quarter reading of all time. The main reasons for declining optimism, the BSP said, were the impending rainy season, a drop in demand during the planting and closed milling seasons, a drop in consumption as households prioritize enrollment expenses, and implementation of stricter new mining policies.
International concerns were also a factor as respondents cited concerns over a weak global economy, which has weakened Philippine exports in the first half of the year. Despite weak exports, the outlook of companies involved in export activities and dual-activity (both import and export) improved for the third quarter.
The dip in confidence of the local business community follows those in the United States, United Kingdom, Germany, and Hong Kong. Business confidence also dropped in those areas for the third quarter, in contrast to the more bullish views of those in France, Italy, South Korea, India, and Switzerland, the central bank noted.
