2024 worries for PH businesses, households
An aerial view of downtown Cebu City with the CCLEX. CDN Digital photo | Brian J. Ochoa
MANILA – Businesses and households are less optimistic about their prospects in the first quarter of 2024 due to concerns about ongoing high inflation and worries about lower income, according to the latest survey by the Bangko Sentral ng Pilipinas conducted from October 5 to October 14.
The Business Expectations Survey (BES) included 1,548 randomly selected firms from the Top 7,000 Corporations list, ranked by total assets in 2016 from the Bureau van Dijk database.
Meanwhile, the parallel Consumer Expectations Survey (CES) covered a random sample of 5,398 households across the Philippines. It was done last Oct. 2 to Oct. 13.
Results show that the business optimism for the next quarter—in this case the first quarter of 2024—deteriorated as the confidence index receded to 38.2 percent from 53.8 percent in the previous survey done last July.
Weak consumer spending
Decreased optimism among businesses regarding the quarter ahead was attributed to expectations of a decline in consumer spending typically following the holiday season; adverse effects of the Israel-Hamas conflict on supply chains; high inflation; and rising interest rates.
Meanwhile, business confidence for the next 12 months was similarly less optimistic, with the index slipping down to 54 percent from 59.7 percent.
The less favorable outlook for the next 12 months among enterprises was attributed primarily to their concerns about the negative effects of the Israel-Hamas and Ukraine-Russia conflicts on the economy, including higher oil prices; lower demand for goods and services; higher prices of basic goods; increasing interest rates; and higher costs of production and raw materials.
Among households, optimism about the next three months also declined to 5.6 percent from 7.8 percent in the previous survey.
Less buoyant
The consumer outlook for the next 12 months was similarly less buoyant, with the index down to 15 percent from 18.95 percent in the previous poll.
Households are expecting a faster increase in the prices of goods—higher inflation— lower income; and fewer available jobs.
Among households surveyed last October, the percentage of those with savings decreased to 29.1 percent compared to 32.8 percent in the July survey.
Among those who do have savings, they are setting aside money for emergencies; health and medical expenses; education; retirement; business capital and investment; and house purchase.
READ MORE: Inflation worries persist but BSP stands pat on rates
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