A DUN and Bradstreet survey released on Wednesday showed that businessmen registered optimism for the second quarter this year, buoyed by signs of global economic recovery and election spending.
“The bright prospects validate widespread expectation of economic gains amidst heavy election spending along with the rush to complete government-funded infrastructure projects, continuing growth in Overseas Filipino Workers (OFW) remittances, increase in exports and the relatively tame inflation outlook at 4.3 percent to 4.6 percent (year-on-year) for the quarter,” the report said.
The Philippine Business Optimism Index (BOI) showed that for the second quarter, volume of sales, net profit and inventory improved by 4, 8 and 10 points, respectively, from the first quarter level.
Volume of sales moved up to net 56 percent from 52 percent in the first quarter. Profit expectations for the second quarter jumped by eight points to 53 percent from 45 percent in the first quarter.
University of Asia and the Pacific (UA&P) economics professor Victor Abola added that the renewed optimism on the domestic economy is essential for the Philippines to achieve a higher-end of 3.6 percent growth in 2010.
Meanwhile, the National Economic Development Authority (Neda) affirmed the observation of Abola, saying it remained “optimistic” of its economic goals.
“There is a global economic rebound this year and there are good signs coming. Exports are rebounding although we have El Niño. Also, inflation is moderate,” Neda acting director-general Augusto Santos said in statement.
“There may be a reduction in our agricultural output, but there will definitely be gains in other sectors,” he added.
But Santos warned that the government is “mindful of the risks that can affect macroeconomic stability.”
These include global economic conditions, crude oil prices, exchange rates, natural calamities, and narrowing sources of investment.
“We are aware that the world recovery remains fragile. Crude oil prices have been rising in the world market, ever since green shoots began appearing last year. That in turn may put some pressure on consumer prices, backed up by utility rate hikes,” he said.
The release of the index results mark the official launch by D&B Asia Pacific Partnerships of the Philippine BOI, which measures businesses confidence in the economy and is designed to capture business expectations.
“It enhances the way that (businesses) make effective commercial decisions, be it risk management or sales or marketing,” Nicholas Teoh, vice president of D&B Asia Pacific Partnerships said.
The survey, which was conducted two weeks ago, included 250 firms from eight sectors: construction, manufacturing durables, manufacturing non-durables, wholesale, transport/communication/utilities, retail, services, and finance/insurance/real estate. (Virgil Lopez/Sunnex)