UPBEAT MOOD TILL FIRST QUARTER OF 2007
By Jun Vallecera
Reporter
BUSINESSMEN are adopting a bullish mood and their level of confidence for the fourth quarter and expectations for the first quarter next year are at an all-time high, the Bangko Sentral ng Pilipinas said on Thursday.
The monetary authorities use the survey to gauge the strength or weakness of overall growth in the economy during the quarter.
Deputy BSP governor Diwa Guinigundo said their business expectations survey, which is done every three months, showed the overall business index at 49.4 percent, the highest since the survey started in April 2001.
The results come just a day after the release of the third-quarter national income accounts, which showed a disappointing 4.8-percent GDP growth, a matter that caused the socioeconomic planning chief, Romulo Neri, to lash out against "vested interests" blocking reform.
But other analysts pin the slower growth not so much on slow reforms, but on the government's deliberate underspending in order to meet fiscal targets. Sen. Mar Roxas, chairman of the Senate's economics panel, on the other hand attributed the poor performance to the tremendous waste of time and resource on the administration's obsession with Charter change.
In the BSP survey, the drivers of bullish sentiment include the continued strengthening of the local currency versus the US dollar, the rollback on oil and petroleum prices, strong overseas Filipino remittances and the advent of the holiday season when Filipinos splurge on most anything.
Business executives believe the outlook for the first quarter next year remains favorable even though its index, at 37.8 percent, was 3.8 percentage points lower than the 40.9-percent confidence index posted three months earlier.
The confidence index reflects the percentage of businesses taking on bullish expectations less the number taking on the opposite view.
According to Guinigundo, all business sectors were in a bullish mood, particularly the services sector where the financial services and hotel and restaurant subsectors are.
"Respondents in all sectors believed the economy would continue to be strong next quarter.
Firms from the services and construction were the most optimistic, followed by wholesale and retail, transport and the industry sectors," he said.
He revealed this was the first time all 17 regions of the country had been included in the survey, with the addition of respondents from Cagayan Valley, the Caraga as well as the Autonomous Region in Muslim Mindanao now forming part of the regular survey.
The survey found businessmen expecting revenues for the current quarter to increase based on the rising index on volume of business activity, having gone up 42.4 percent, and total order book similarly rising by 34.2 percent.
"Respondents also expressed improving access to credit with the index still positive for the second quarter in a row at 2.8 percent from 0.5 percent.
The financial conditions index, a measure of liquidity position, although still negative at 14.1 percent from (negative) 20.1 percent, showed an improvement of six points," Guinigundo said.
The pessimists cited low demand, high cost on raw materials, increased capital expenses, difficulties in collecting receivables and bad weather as reasons for their dim outlook.
But their outlook on employment remains positive at 8.9 percent, lower than three months earlier when this stood at 13.8 percent.
Their perception of capacity utilization for industry was basically unchanged at 75.6 percent.
The index for expansion plans stood higher at 38.9 percent from 29.6 percent, indicating that employment and capacity utilization could improve down the line.
Cited as restraints to business were the lack of demand for industry products followed by competition from local and foreign colleagues, unclear economic laws, high interest rates and financial problems.
But the bulk of businessmen expect inflation to slow down and for interest rates to come down even lower in the coming months, Guinigundo said.
Business Mirror
December 1, 2006
No comments:
Post a Comment