Firms see better prospects but consumers remain wary

Businesses turned less pessimistic in May while consumers grew more downbeat in the second quarter, reflecting a split in sentiment as firms pointed to easing cost pressures and stronger demand, but households remained weighed down by inflation fears and concerns over governance.

- By KEISHA TA-ASAN

In its latest Business Expectations Survey (BES), the Bangko Sentral ng Pilipinas (BSP) said the overall business confidence index improved to -25.2 in May from -35.8 in April, indicating that while pessimists still outnumbered optimists, sentiment became less negative month-on-month.

Respondents attributed their improved outlook to “higher consumer spending and corporate earnings” and “lower oil prices and energy costs.”

Firms were also more upbeat about the months ahead. The confidence index for the next three months turned positive at 0.6 in May from -7.5 in April, while the 12-month outlook climbed to 27.8 from 19.5.

Businesses said their August outlook was supported by “better business growth prospects in manufacturing, construction and business process outsourcing sectors,” as well as “declining oil prices” and “higher public works spending.”