After 3 consecutive quarters of optimistic sentiment, the Business Expectations Survey (BES) of the Bangko Sentral ng Pilipinas showed the outlook of business owners on the economy turned pessimistic as the overall confidence index (CI) declined to -5.6 percent in Q3 2021 from 1.4 percent in Q2 2021.
The Q3 2021 BES was conducted during the period 22 July — 15 September 2021. There were 1,511 firms surveyed nationwide, consisting of 584 companies in NCR and 927 firms in areas outside NCR, covering all 16 regions nationwide.
The negative index resulted from the combined effects of decrease in the percentage of optimists and the increase in the percentage of pessimists.
The respondents’ pessimism was attributed to the ongoing COVID-19 pandemic and its protracted adverse effects to their businesses; re-imposition of Enhanced Community Quarantine (ECQ) particularly in NCR; decrease in sales, orders, and income; concerns over government policies, particularly the actions to curb the spread of COVID-19 and its Delta variant; and higher prices of raw materials like steel, wood liner, glue, and other commodities.
For the next quarter, the business sentiment remained optimistic as the overall CI increased slightly to 31.9 percent from 31.4 percent a quarter ago.
For the next 12 months, business sentiment was more optimistic as the overall CI increased to 56 percent from previous quarter’s survey result of 52.5 percent.
Importers and domestic-oriented respondent firms turned pessimistic, while exporters and dual-activity firms were less optimistic. For Q4 2021, the outlook of importers and domestic-oriented responding firms were more optimistic, while that of exporters and dual-activity firms were less buoyant.
For the next 12 months, the improved business sentiment persisted across the different types of respondent trading firms as the indices were higher than the Q2 2021 survey results, except for the dual-activity firms whose positive outlook was relatively steady.
Business sentiment across all sectors deteriorated for Q3 2021, with the overall CI of firms from the construction sector turning negative for the first time since Q4 2008. Similarly, firms from the services, wholesale and retail trade, and the industry sectors find that business would be less favorable in Q3 2021. For Q4 2021, business outlook across all sectors remained in the positive territory, but at varying degrees. Business sentiment in the industry, construction, and wholesale and retail trade sectors was more buoyant for the next quarter. Likewise, the CI across all sectors for the next 12 months was more positive.
