Business optimism dips in BSP survey

SEASONAL factors and the impact of higher taxes, among other factors, have led to lower business optimism for the first quarter, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.

- puted as the percentage of companies 39.5 percent from 43.3 percent three months earlier, results of the BSP’s latest Business Expectations Survey (BES) showed.

Reasons cited by respondents were an expected slowdown in business activities and consumer demand following the holiday and harvest seasons, rising fuel prices that are being affected by crude price movements and higher excise taxes on petroleum products, and increased competiton.

over the transitory impact on consumer prices with the implementation of the Tax Reform for Acceleration and Inclu- sion (Train) law may have contributed - cant number of businesses surveyed also mentioned about the positive impact Economic Statistics Director Rosabel

The Train law, which took effect at the start of the year, raised taxes on fuel products, car sales and sugar-sweetened beverages, among others, in exchange for lower personal income taxes. Revenues from the law will be used to fund the gov

Higher crude prices

Pump prices were immediately affected when the law took effect but central bank Deputy Governor Diwa Guinigundo noted that January’s increases were also due to a “huge increase of Dubai crude oil from something like

domestic prices of gasoline, kerosene, gas) prices also went up at a less sig

The Bangko Sentral also noted that the Philippines as it mirrored the “less favorable business outlook in the US, Canada, China, Hong Kong and South Korea, but was in contrast to the more

bullish views of those in the UK, Australia, France, Germany, Neth

- mism was attributed largely to the wholesale and retail trade sector, which cited expectations of reduced consumer demand following the holidays and initial price hikes due to the Train law’s implementation.

Other sectors were bullish over the impact of Train, with industry - hold disposable incomes and construction companies looking forward to new projects.

More upbeat for Q2

The outlook for the next three months, meanwhile, rose to 47.8 percent from 39.7 percent with respondents pointing to a usual increase in demand during the summer, school enrolment and harvest periods; increased government infrastructure spending - ness expansions, new projects and investment opportunities; and continued product development, new products and enhanced marketing strategies.

“This suggests that economic growth could accelerate for the Guerrero said.

By industry, optimism was higher for the industry, wholesale and retail trade, and services sectors but lower for construction, the BES found.

Hiring intentions for the next quarter also increased with the employment outlook index rising to 29.9 percent from 24.7 percent in the previous survey.

- ning to expand also rose to 35.1 percent from 31.1 percent.

Financing, inflation outlooks

- while, remained in negative territory percent from 0.9 percent. The BSP, that their financing requirement could be met … as respondents re

to increase but remain within target, the peso to weaken and interest rates to rise for both the current and second quarter results of 3.4 percent and 3.5 percent, respectively, within the BSP’s 2.0-4.0 percent target range.

The latest BES, which polled 1,469 companies nationwide, was conducted from January 8 to February 22. The survey results are considered indicative of the direction of overall business activity.