Business confidence in the local market fell for the second straight quarter on the back of higher operating costs and delayed government disbursements, a Bangko Sentral ng Pilipinas (BSP) survey showed Thursday.
The BSP's Business Expectation Survey showed that for the second quarter of the year, the business confidence index dropped to 31.8 percent, down 33 percent from its first-quarter figures.
The confidence index is computed as the percentage of firms that answered positively, subtracted by the percentage of those that answered negatively in terms of certain given indicators.
Rosabel Guerrero, BSP Department of Economic Statistics director, said a number of factors went into play to influence the weak business sentiment for the second quarter.
"They cited some domestic constraints to the business environment that contributed to their weaker sentiment, namely, higher operational costs as well as slow business procedures and fund disbursements for government construction projects," Guerrero said.
Rising global oil and commodity prices, as well as the ongoing conflicts in Middle Eastern countries, also played a role in the weak business outlook, she added.
BSP Deputy Governor Diwa Guinigundo, however, quickly dismissed speculations that the somber results of the survey could mean businessmen are getting impatient with the Aquino administration.
"There is no basis for that," Guinigundo stressed.
Perceived economic slowdown
For the next quarter, Guerrero said the confidence index similarly declined to 33 percent due to the perceived economic slowdown this year.
"The second quarter and third quarter 2011 outlook suggests that the Philippine growth trend could be sustained, but a slowdown is possible after the reported growth of 7.6 percent in 2010," she said.
Industry-wise, the survey revealed that business outlook index likewise eased as it settled at 31.9 percent in the second quarter, from 48.1 percent in the previous quarter.
Business confidence index of the construction sector, meanwhile, fell to 41.9 percent despite being the most optimistic among all sectors.
Guerrero said the respondents' views were weighed down by the government's slow disbursements of funds for infrastructure projects under the PPP scheme, the increasing costs of building materials and the cost-cutting efforts of the government.
Index of the services and the wholesale and retail industries likewise plummeted to 39.3 percent and 23.9 percent, respectively, in light of the recent Japan disasters and the elevated prices of oil and commodity in the world market.
The Q2 2011 Business Expectation Survey was conducted from April 1 to May 10 and covered 1,625 firms nationwide.
Aside from confidence in doing local business, the survey also revealed that firms see inflation and interest rates rising and the peso appreciating further against the US dollar. — JMT/VS
