Businesses were less optimistic while consumer confidence improved in the second quarter of the year, the Bangko Sentral ng Pilipinas (BSP) Business Expectations Survey (BES) and Consumer Expectation Survey (CES) showed Friday.
Senior director of the BSP Department of Economic Statistics, Redentor Paolo Alegre Jr., said the overall confidence index of businesses in April to June plummeted to 1.4 percent from 17.4 percent in January to March.
“If we compare the Philippine sentiment with other countries, we are similar to businesses in the United States, Bulgaria, Chile, and China. Their businesses there were less optimistic,” Alegre said in a virtual press briefing.
Business sentiment fell in the second quarter of the year due to the upsurge in coronavirus disease 2019 (Covid-19) infections, re-imposition of stricter community quarantine in the National Capital Region (NCR) Plus (Metro Manila, Bulacan, Cavite, Laguna, and Rizal), and elevated inflation due to supply constraints, he added.
He said this trend would continue in the next quarter and the next 12 months.
Among sectors, the BES showed that only the construction sector has better expectations in the coming months while the business confidence of firms in industry, services, and wholesale and retail trade is weak.
“In the construction sector, we see that the sector turned optimistic. And the reason given was because of the expect(ed) increase in volume, in activity of infrastructure projects due to the ‘Build, Build, Build’ program of the government,” Alegre said.
On the other hand, other sectors were less optimistic mainly due to concerns on Covid-19, rising infection rate, implementation of stricter community quarantine, and the slow arrival of vaccines, among others.
The African swine fever outbreak, declining milling production, power generation, limited public transportation, the decline in exports, and weaker macroeconomic fundamentals were also cited by other sectors, saying these have affected their business expectations in the coming months.
Meanwhile, consumer confidence in the second quarter of the year improved to -30.9 percent from -34.7 percent in the first quarter.
Alegre said Philippine consumer confidence for the April-to-June quarter is comparable to those in Europe, such as France, Poland, Switzerland, and the United Kingdom.
The BSP reported that consumer confidence remains upbeat for the third quarter of the year and the next 12 months.
Among the expectations of consumers that improved outlook for the coming months are more jobs and permanent employment; additional and higher income; and effective government programs in dealing with the pandemic, such as the vaccination program, provision of financial assistance, and relaxing of quarantine restrictions