Business sentiment more optimistic in Q2, less buoyant in Q3, BSP says

·2 min read

BUSINESS sentiment is more optimistic in the second quarter, but is less buoyant in the third quarter and the next 12 months, the central bank said.

The overall confidence index (CI) rose to 35.4 percent in Q2 from 32.9 percent in the previous quarter, according to the second quarter Business Expectations Survey (BES) by the Bangko Sentral ng Pilipinas (BSP).

For Q3, business sentiment weakened but remained positive as the overall CI declined to 46.4 percent from 59.7 percent from the previous quarter, BSP data showed.

The central bank found out that the trend is also less optimistic for the next 12 months as the overall CI decreased to 59.9 percent from 69.8 percent.

The outlook, BSP said, is generally more upbeat in the second quarter but is “largely less buoyant for the near term.”

BSP further noted that firms expected their financial condition and access to credit to improve in the second quarter.

In the third quarter, the employment outlook index was steady at 25.4 percent. It is also higher at 30.7 percent for the next 12 months, the survey showed.

“The higher positive readings for Q3 2022 and the next 12 months suggest that firms are looking forward to hiring more people in the next quarter and the next several months,” the BSP said.

Businesses are expecting the peso to depreciate further against the dollar in the second and third quarter and the next 12 months.

Inflation and borrowing rates could also rise further during the period, the BSP survey showed.

Inflation soared to 5.4 percent in May and is likely to settle between 5.7 to 6.5 percent last month.

Earlier, the BSP hiked its benchmark interest rate to 2.5 percent to tame skyrocketing inflation.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting