Metro Manila (CNN Philippines, April 8) — Businesses were less optimistic about the Philippine economy in the first quarter of 2020, said the Bangko Sentral ng Pilipinas on Wednesday.
According to the BSP’s Business Expectations Survey (BES), business confidence plunged to 22.3 percent, from 40.2 percent three months ago.
Among the reasons cited by respondents are the negative effects of the Taal Volcano eruption, the COVID-19 pandemic and African swine fever outbreaks, concerns on government policies such as the travel ban and non-renewal of mining rights, and the termination of the Visiting Forces Agreement with the United States.
The low supply of raw materials and products and decrease in orders and lower volume of business activity and production also contributed to lower business confidence.
Businesses also experience a seasonal slack in demand after holiday season, which only added to pessimism.
Importers, domestic-oriented and dual-activity firms expected a slowdown in business activities within the quarter. However, exporters were more optimistic as they anticipate new clients and higher demand for fruits.
Meanwhile, all sectors have bleak outlook except for construction, with firms expecting a spike in the volume of projects because of the Build, Build, Build program and new prospective clients.
A total of 1,533 firms nationwide took part in the survey, which was conducted from January 24 to March 13, 2020. This was before the imposition of the enhanced community quarantine on the entire Luzon in an attempt to curb the spread of the coronavirus.
The World Bank and Asian Development Bank earlier slashed growth estimates for the country, with the pandemic hampering local trade and tourism.
Central Bank Governor Benjamin Diokno previously said he expects the Philippines to enter a technical recession, which the country will see negative growth for at least two quarters.
READ: BSP governor expects PH to go into technical recession due to COVID-19
Meanwhile, the National Economic and Development Authority said policies to help the Philippine economy adjust to the “new normal” resulting from the pandemic are already being identified.
READ: Policymakers plot moves for economy in COVID-19 aftermath
