Firms, consumers less optimistic economist
The lower index resulted from the increase in the percentage of pessimists, outweighing the increase in optimists.
Daily TribuneThe lower index resulted from the increase in the percentage of pessimists, outweighing the increase in optimists.
A private sector economist said on Friday that inflation might be the main cause as to why business sentiments became less optimistic and Filipino consumers more pessimistic in 2022 and 2023.
This is after Bangko Sentral ng Pilipinas mentioned that business and consumers' confidence index declined until next year.
"This (outlook) may have to do with higher prices/inflation that reduces what would otherwise be spending by consumers (which account for at least 63 percent of the economy), businesses, government, and other institutions," Rizal Commercial Banking Corp. chief economist Michael Ricafort told Daily Tribune in a Viber message.
Ricafort added that this could be "aggravated" by the continued Covid-19 lockdowns in China, which is the world's second-largest economy and could slow down global economic growth/recovery, as well as aggravate global supply chain disruptions since the pandemic started.
Business sentiment data
Data from BSP showed on Friday that the business' confidence index declined for the second consecutive quarter to 23.9 percent from 26.1 percent in Q3 2022.
"The lower index resulted from the increase in the percentage of pessimists, outweighing the increase in optimists," the Central Bank said.
Aside from inflation, Bangko Sentral ng Pilipinas attributed the lesser optimistic sentiment to peso depreciation, sales and demand decline, rising production inputs costs, and higher interest rates.
The business outlook for the next quarter also turned less upbeat as the overall CI decreased to 31.3 percent from 43.9 percent a quarter ago.
For the next 12 months, business confidence was likewise less optimistic as the overall CI decreased for the third consecutive quarter to 46.2 percent following the previous quarter's survey result of 57.7 percent.
Consumer sentiment data
BSP mentioned that the consumers' confidence index decreased to -14.6 percent from -12.9 percent.
"The decline in the index in the fourth quarter 2022 indicates that the number of households with pessimistic views increased and continued to outnumber those with optimistic views," BSP explained.
The Central Bank said Filipino consumers anticipated that interest and inflation rates might increase while the peso may depreciate against the U.S. dollar.
Filipinos are also expecting that the unemployment rate may decline in the fourth quarter of 2022, the first quarter of 2023, and the next 12 months, BSP mentioned.
"In particular, consumers expected the inflation rate may rise to 5.9 percent for the next 12 months, breaching the upper end of the National Government's inflation target range of 2 to 4 percent for 2022 and 2023," BSP said.
