BSP survey: PH business, consumer confidence plunge due to economic woes

DESPITE the onset of the holiday season, the confidence of Philippine businesses and local consumers are at their lowest levels in almost eight years — with the bearish sentiment expected to persist into early 2019 — no thanks to rising prices, a weak peso and higher interest rates.

Thus revealed the latest survey of the Bangko Sentral ng Pilipinas (BSP) conducted on Filipino businessmen and consumers for the fourth quarter, with most respondents showing a level of gloom not seen since the first quarter of 2010.

In a statement, the central bank said that business outlook on the economy was less optimistic during the current quarter, with the overall confidence index declining to 27.2 percent, from 30.1 percent in the third quarter of 2018 .

“Despite the expected uptick in demand during the Christmas season, business outlook was less buoyant for the current quarter due to higher inflation driven by rising raw material costs and global oil prices; weakening peso; higher interest rates (i. e. , borrowing costs); decrease in volume of sales and orders; and lack of supply of raw materials,” it said.

Respondents also expected the less bullish business conditions to continue for the first quarter of 2019 as the index remained positive, but lower at 29.4 percent, from 42.6 percent in the previous quarter.

The central bank said this also represents the weakest forward looking sentiment in the business sector since the third quarter of 2009.