BSP: Firms, consumers more upbeat beyond Q4 2021 amid improved economic conditions

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Metro Manila (CNN Philippines, December 18) — Businesses and consumers are seeing a rosier picture in the months ahead amid efforts to further reopen the economy, the latest Bangko Sentral ng Pilipinas (BSP) surveys revealed.

The BSP on Friday reported improvements in confidence levels logged in the fourth quarter Business Expectations Survey (BES) and Consumer Expectations Survey (CES) toward the next quarter, along with the next 12 months.

The confidence index (CI) of firms for the next quarter rose to 52.8% from the 31.9% outturn in the previous survey. A positive index means the number of optimists is bigger than pessimists.

Respondents attributed their more optimistic view to the wider availability of COVID-19 vaccines, relaxing of quarantine restrictions and increase in sales and orders, said the BSP.

They also cited improvement in economic conditions coupled with the prospect of recovery losses incurred during tighter quarantine restrictions, the central bank further explained, adding that the continuing drop in COVID-19 cases was another factor.

Survey participants cited the same factors for their improved business sentiment for next 12 months along with the expected return of business operations, the BSP also said.

Businesses’ CI for the period rose to 67.6%, compared to the 56% logged in the last BES.

Meanwhile, the CES yielded indexes of 9.3% and 23.6% for the next quarter and the 12 months ahead.

This is an improvement from the 2.7% and 18.6% CIs logged in the CES last year, the BSP noted.

“Respondents attributed their optimism to the following expectations: (a) availability of more jobs and permanent employment, (b) additional and high income, (c) effective government policies and programs, and (d) good governance,” its report read.

Behaviors observed

Speaking to CNN Philippines’ The Exchange, Paul Santos, chairman of the Philippine Retailers Association, acknowledged that the holidays will be better this year for firms and consumers alike with the easing of restrictions and wider COVID-19 vaccination drive.

However, he flagged concerns over the more transmissible Omicron variant saying retailers are “very, very wary” of what happens next.

Still, Santos said retail businesses could be better prepared in reacting to new coronavirus variants this time around given their prior experience with other contagious variants.

Meanwhile, Bench general manager Jude Ong shared that there are two kinds of shoppers observed so far: the cautious shopper, which only purchases essential goods; and the “revenge” shoppers who splurge on the luxuries they offer.

Still, shoppers in general spend less time in their stores compared to pre-pandemic times, Ong added. The challenge now is to get both their attention and the most out of their stay, he said.

The Bench executive projects a comeback from brick-and-mortar stores despite the dominance of online shopping in 2022.

Filipinos are “more emotional,” and shopping in physical stores is “more experiential” for them, noted Ong.