MANILA – Business confidence in the Philippines in the first three quarters of 2012 has been above the 40 percent level and same as in 2007, state media reported Thursday.
This prompted a Central Bank official to hope that full-year expansion of the domestic economy will be above six percent.
Bangko Sentral ng Pilipinas Acting Deputy Director of Dept. of Economic Statistics Teresita Deveza, in a briefing Thursday, noted that because of the similarity in the levels of business confidence between this year and in 2007 a 6.5 percent growth for the Philippines is possible.
“Based on the survey results a very rough assessment shows that a 6.5 percent growth is likely for the country this year,” she said.
The country posted its three-decade high 7.4 percent growth, as measured by gross domestic product, in 2007 boosted by the strong performances of the Trade, Agriculture and Fishery, Private Services, Construction and TCS as well as high household spending and investment in construction.
In the first half this year, the economy registered a 6.1 percent growth, higher than year-ago’s 4.2 percent.
For the second quarter alone, growth rose by 5.9 percent, up from year-ago’s 3.6 percent but slower compared to the revised 6.3 percent in the previous quarter.
The economy’s growth in the second quarter this year is among the highest in the region next to China’s 7.6 percent and Indonesia’s 6.4 percent.
Results of the central bank’s third quarter 2012 Business Expectation Survey showed a drop in the business sector’s optimism due to combined effects of weather-related disturbances and negative developments overseas.
However, the index for the next quarter posted its highest level to date due to the upcoming holidays and elections.
Results of survey showed that confidence index in the third quarter this year declined to 42.5 percent from the previous quarter’s 44.5 percent.
For the next quarter, the index rose to record-high of 59.6 percent from 44.6 percent.
The previous record high was posted in the first quarter of 2011 at 59.4 percent.
Deveza traced the record-high CI for the fourth quarter this year to expectations for higher business volumes, expansion of business and new product lines, higher government infrastructure due to the Public-Private Partnership projects, and increased spending due to the holiday season and the upcoming national elections next year.
She said the favorable macroeconomic conditions like the low interest rate environment, manageable inflation, steady growth of inflows from overseas Filipinos as well as positive credit rating actions also pushed the CI for the fourth quarter to record-high.
Among the selected economic indicators, the respondents expect the peso-dollar exchange rate to appreciate, the inflation to go up and the interest rate to further go down for the quarter.
Monetary officials have earlier said tracking ability of the survey vis-à-vis actual expansion of the economy is good.
However, BSP Assistant Governor Cyd Tuano-Amador told PNA that results of the BES is only among the factors in the GDP growth projection and pointed out that the survey is also time-dependent.
She explained that the survey was held between July 2 to August 13, 2012 or during the time when the country was hit by monsoon rains that resulted to wide-spread flooding.
Tracking ability of the survey result in terms of domestic growth is about 70 percent, she said noting that it is not a perfect gauge because the survey was only done nationwide since 2006. (Joann Santiago)
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