Recently the Bangko Sentral ng Pilipinas (BSP) conduct its own survey which revealed that business sentiment in the Philippines became less optimistic during the 3rd quarter, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
Philippine businesses turned less optimistic about the economy in the third quarter amid bad weather and sluggish demand during “ghost month,” a survey by the Bangko Sentral ng Pilipinas (BSP) showed.
Based on its latest Business Expectations Survey, the overall confidence index (CI) for businesses fell to 23.2% in the third quarter, down from the 28.8% in the second quarter and the 32.9% in the same quarter last year.
A positive CI indicates that more respondents are optimistic than pessimistic. However, this was the lowest CI seen since the 23.9% recorded in the fourth quarter of 2022. The business confidence index has been on a decline for three consecutive quarters.
“Philippine businesses were less optimistic about the economy in the third quarter of the year,” the BSP said in a statement. “Their dampened confidence was primarily attributed to the slack in demand during the ‘ghost month’ and the onset of the rainy and typhoon season.”
This year, “ghost month,” the seventh month in the Chinese lunar calendar, ran from Aug. 23 to Sept. 21. Some investors avoid making big investments or decisions during this period.
The country also experienced heavy rains and flooding brought by several tropical storms and the southwest monsoon from late July to early August.
“Global headwinds, such as higher US tariffs, geopolitical tensions, and weaker foreign demand, also weighed on business confidence,” the BSP said. The US began imposing a 19% tariff on goods from the Philippines on Aug. 7.
At the same time, business confidence for the fourth quarter improved to 49.5% from 39.3% previously, as a surge in consumer spending is usually seen ahead of the holidays. The overall business outlook for the next 12 months eased to 48.1% from 51% the previous quarter.
“Despite the lower year-ahead CI, it remained positive, reflecting businesses’ continued optimism about near-term economic prospects,” the BSP said.
Businesses surveyed also see the peso appreciating against the US dollar in the fourth quarter and over the next 12 months but expect inflation to accelerate further.
“Firms also expect inflation over the next 12 months to remain within the National Government’s target range, indicating firmly anchored business inflation expectations. Within-target inflation supports investments and job creation,” the BSP said.
Businesses expect inflation to have settled at 2.1% in the third quarter, and picking up to 2.3% next quarter, and 2.4% in the next 12 months.
The central bank surveyed 1,523 firms nationwide, 580 of which are in the National Capital Region (NCR) and 943 in areas outside NCR, from July 4 to Aug. 17.
Let me end this post by asking you readers: What is your reaction to this development? Do you think the economy of the Philippines will somehow slow down in the 4th quarter?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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