The latest Bangko Sentral ng Pilipinas Business Expectation Survey showed that local businessmen are more confident about their growth prospects, thanks to indications of improving general economic conditions and demand.
The survey was conducted on January 6 to February 14 among representatives of 1,587 business establishments.
The survey showed confidence index for the current quarter picking up to 40.5 per cent from the 38.7 per cent recorded in October to December 2011, while the “next quarter” index similarly rose to 55.4 per cent from 36.1 per cent in the same survey.
Survey respondents cited several factors for their upbeat outlook, namely : increased orders; new contracts and projects; new, enhanced business strategies and products; higher government spending; business expansion due to steady investment inflows; sound macroeconomic fundamentals; political stability; and possible credit rating upgrade.
Moreover, respondents’ expectation of a gradual recovery of global markets, particularly in the USA and “dissipation” of the impact of natural disasters that struck Japan nearly a year ago fueled optimism in the quarter ahead.
Trading firms attributed their bullish outlook to increasing demand, business expansion, increased state spending and brighter growth prospects of emerging Asian economies, while those in the services sector cited factors like increased revenues from business process outsourcing, continued strong remittances from Filipinos abroad as well as possible credit rating upgrades as basis for their increased confidence.
On the other hand, respondents identified the top constraints to business growth and expansion: competition, insufficient demand and unclear economic laws.
The confidence index is computed as a the percentage of respondents who answered in the affirmative less percentage of those that answered in the negative with respect to views on specific indicators.
The index is considered a good indicator of economic growth. Using the measure, high economic growth is expected in the first quarter as well as the second quarter of 2012,” according to Diwa Guinigundo, BSP deputy governor.