Business firms have reported an improved outlook on the Philippine economy for the first quarter and second quarter of 2023, and the next 12 months, according to a survey conducted by the Bangko Sentral ng Pilipinas.
The overall confidence indices (CIs) for these periods have shown a significant increase from the previous quarter’s survey results, indicating a surge in optimism where the percentage of optimists outweighed the percentage of pessimists during the reference periods.
Respondents cited a full reopening of the economy, an increase in consumer demand for products and services, and new opportunities in healthcare, manufacturing, and construction sub-sectors as reasons for their more positive outlook for the first quarter.
All sectors, including industry, construction, services, and wholesale and retail trade, showed increased optimism for the first quarter, with the CIs of all sectors increasing during this quarter.
However, exporters were less optimistic for the first quarter, while business outlook across all other types of trading firms was generally more upbeat.
The survey results also indicated that the average capacity utilization in the industry and construction sectors for the first quarter rose to 74.8 percent, up from 72.1 percent in the fourth quarter of 2022.
Furthermore, firms expect their financial condition and access to credit to be less tight for Q1.
Despite this positive outlook, businesses expect a stronger peso, and higher borrowing and inflation rates for Q1 and the near term.
However, inflation expectations among businesses may ease in the near term, as the number of respondents who expected higher inflation declined compared to Q4 2022 survey results.