BUSINESS confidence in the country has weakened for the second and third quarter of 2021, the Bangko Sentral ng Pilipinas (BSP) reported.
The less optimistic outlook was brought about by the upsurge of Covid-19 cases, re-imposition of stricter community quarantine, particularly in the National Capital Region Plus, and elevated inflation rate due to supply constraints.
The BSP said the respondents also cited concerns over the pace of the vaccination rollout for the current quarter as well as the expected seasonal factors for the third quarter of 2021 such as the close of the milling season and the usual slack in demand for power and construction materials during the rainy season as reasons for their less buoyant sentiment for the second and third quarter of the year.
Less upbeat
Similarly, due to these reasons, the business outlook on the country’s economy for the next 12 months was less upbeat as the confidence index decreased to 52.5 percent from the first quarter 2021 survey result of 60.5 percent.
Outlook across different types of businesses generally waned for the second and third quarters this year, and the next 12 months.
A less favorable sentiment generally prevailed across the different types of trading firms (i.e., exporter, importer, dual-activity and domestic-oriented).
Importer, dual-activity and domestic-oriented respondent firms were less confident on the business environment for the second quarter of 2021, while exporters were more optimistic.
For the third quarter of 2021 and the next 12 months, the wea-ker business sentiment persisted across the different types of respondent trading firms as the indices were lower than the first quarter survey results.
For the second and third quarters of the year, and the next 12 months, the business sentiments of the industry, services and wholesale and retail trade sectors weakened.
Bright spot
Meanwhile, the outlook of the construction sector remains to be a bright spot and was more buoyant for the second quarter this year and the next 12 months, but was optimistic and broadly steady for the third quarter.
The outlook of firms on their own business operations turned pessimistic for the second quarter.
This pessimism mainly emanated from the negative views of firms from the wholesale and retail trade and services sectors on the volume of business activity and total orders booked.
Lean period
Steven Yu, president of Mandaue Chamber of Commerce and Industry, said the third quarter period is traditionally a lean period in the Philippines.
With all these factors setting in, the prognosis is consequentially pessimistic, he explained.
Yu said there was also a sizeable increase in prices in raw materials and commodities. Prices of oil, for instance, continue to be on an uptrend.
“The mood is understandably depressed but it will slowly reverse in the fourth quarter. The fourth quarter is a peak season and with our vaccination in full swing, we should see better numbers by then,” he said. (JOB)