In the second quarter of this year, business morale is poor, while consumer confidence is improving
As reported by the Bangko Sentral ng Pilipinas’ Business Expectations Survey (BES) and Consumer Expectations Survey (CES), businesses were less hopeful in the second quarter of the year, while consumer confidence increased.
Senior director of the Bureau of Statistics’ Department of Economic Statistics, Redentor Paolo Alegre Sr., said that the overall confidence index of companies in the period from April to June fell to 1.4 percent from 17.4 percent in the period from January to March.
In terms of business attitude in other nations, the Philippines is comparable to companies in the United States, Bulgaria, Chile, and China, to name a few examples. According to Alegre, who spoke during a virtual news event, “their companies were less optimistic.”
In addition, the increase in coronavirus disease 2019 (Covid-19) infections, the re-imposition of stricter community quarantine in the National Capital Region (NCR) Plus (Metro Manila, Bulacan, Cavite, Laguna, and Rizal), and elevated inflation as a result of supply constraints all contributed to a decline in business sentiment in the second quarter of the year, he explained.
He predicted that this tendency will continue in the next quarter as well as for the following 12 months.
The Business Hopes Survey (BES) revealed that only the construction sector has higher expectations for the next months, while business confidence among companies in the industry, services, and wholesale and retail trade are all low in comparison.
”We can observe that the building industry has taken a more positive stance recently. And the reason given was the anticipated increase in volume and activity of infrastructure projects as a result of the government’s “Build, Build, Build” program,” Alegre explained. “The reason given was the expected increase in volume and activity of infrastructure projects as a result of the government’s “Build, Build, Build” program.”
Another reason for the gloomy outlook in other sectors was the ongoing Covid-19 outbreak, an increase in the incidence of infection, the adoption of tighter community quarantine measures, and the delayed delivery of vaccinations, to name a few factors.
Other industries mentioned the African swine fever epidemic, decreasing milling output, reducing electricity generation, restricted public transportation, a drop in exports, and worse macroeconomic fundamentals as factors that have impacted their business prospects for the future months.
Meanwhile, consumer confidence increased to -30.9 percent in the second quarter of the year, up from -34.7 percent in the first quarter.
According to Alegre, consumer confidence in the Philippines during the April-to-June quarter is similar to that of countries in Europe, such as France, Poland, Switzerland, and the United Kingdom, among others.
Consumer confidence, according to the BSP, is expected to continue high in the third quarter of the year and for the next 12 months.
Consumers expect more jobs and permanent employment, as well as additional and higher income, in the coming months. They also expect effective government programs to combat the pandemic, such as the vaccination program, the provision of financial assistance, and the relaxation of quarantine restrictions, to be implemented.