BUSINESS and consumer confidence showed improvements in the fourth quarter of 2020 as the economy gradually reopens after months of community quarantines due to COVID-19 pandemic, latest Bangko Sentral ng Pilipinas (BSP) surveys showed.
According to the results of the Business Expectation Survey (BES), business confidence on the economy improved for October to December as the overall confidence index (CI) reverted to the positive territory at 10.6 percent from -5.3 percent in the third quarter.
Third quarter’s negative business CI is the worst after posting 43 quarters of positive confidence since the index was recorded at -2.6 percent in the third quarter of 2009.
“The positive reading indicates that respondents with optimistic views increased and outnumbered those with pessimistic views,” the BSP said.
The central bank noted that the respondents’ optimism for the fourth quarter 2020 was attributed to the “reopening of businesses and adapting to the ‘new normal,’ easing of community quarantines nationwide, seasonal factors such as uptick in demand during the holiday season and start of milling season, and increase in volume of sales and orders.
The BSP said the favorable sentiment prevailed across the different types of trading firms such as exporter, importer, dual-activity, and domestic-oriented, but at varying degrees.
Importers and domestic-oriented firms turned optimistic on the business environment for the fourth quarter, while exporters became more optimistic and dual-activity respondent firms were less upbeat.
For the period, the business sentiment of the industry and construction sectors was more upbeat, while the sentiment of the services and wholesale and retail trade sectors turned optimistic, according to the central bank.
“The employment outlook index returned to the positive territory for the first quarter of 2021 and the next 12 months, suggesting that firms are looking forward to hiring people in the first quarter of 2021 and the next 12 months,” it said.
Consumer sentiment
Meanwhile, results of the Consumer Expectations Survey (CES) showed the country’s consumer outlook was less pessimistic for the fourth quarter as the overall confidence index increased to -47.9 percent from -54.5 percent in the third quarter.
“According to respondents, their improved outlook during fourth quarter 2020 was brought about by their expectations of: (a) availability of more jobs and permanent employment, (b) additional and high income, (c) effective government policies and programs such as the Social Amelioration Program (SAP) and the Plant, Plant, Plant Program, and (d) less community restrictions, reopening of businesses and end to COVID-19 pandemic,” the BSP said.
For the first quarter of 2021, the consumer CI reverted to positive territory at 4.3 percent from the third quarter survey result of -4.1 percent.
Consumers cited their anticipation of availability of more jobs and more working family members, additional and high income, an end in the COVID-19 pandemic as well as the discovery of COVID-19 vaccine, and reopening of businesses as reasons behind their optimism.
The fourth quarter BES was conducted during the period Oct. 6 to Nov. 24, 2020. There were 1,513 firms surveyed nationwide.
Samples were drawn from the Top 7,000 corporations ranked based on total assets in 2016 from the Bureau van Dijk (BvD) database, consisting of 585 companies in the National Capital Region (NCR) and 928 firms in areas outside NCR (AONCR), covering all 16 regions nationwide.
For the fourth quarter CES, the BSP conducted the survey from October 1 to 31, 2020. The CES samples were drawn from the Philippine Statistics Authority’s (PSA) Master Sample of Households, which is considered as a representative sample of households nationwide.
About 5,612 households were surveyed. Of the said households, 2,828 (50.4 percent) were from NCR and 2,784 (49.6 percent) from AONCR. (with GMA News)
