BSP: Business firms more confident on PH economy


Business firms are more confident on the Philippine economy for the first two quarters of this year and the next 12 months given the overall confidence indices (CIs) during these periods significantly increasing from the previous quarter’s survey result of the Bangko Sentral ng Pilipinas (BSP).

In a statement, the BSP said this means that the percentage of optimists increased and outweighed the percentage of pessimists during the reference periods.

“For Q1 2023 (first quarter 2023), the more upbeat outlook of respondents was attributed to expectations of: (a) higher consumer demand for products and services, (b) full reopening of the economy and return to pre-pandemic normalcy as more Covid-19 restrictions are lifted, (c) increased business activities and sustained economic recovery, and (d) expansion and new business opportunities in healthcare, manufacturing, and construction sub-sectors,” the BSP said.

The CIs of all sectors (i.e., industry, construction, services and wholesale and retail trade sectors) increased in Q1 2023, suggesting a more optimistic business outlook for the current quarter.

Across different types of trading firms (i.e., exporter, importer, dual-activity and domestic-oriented), business sentiment was generally more upbeat for Q1 2023, except for exporters whose outlook was less optimistic.

The average capacity utilization in the industry and construction sectors for Q1 2023 rose to 74.8 percent from 72.1 percent in fourth quarter of 2022.

“Firms expected that their financial condition and access to credit to be less tight for Q1 2023 as their corresponding indices improved, but remained negative,” the BSP said.

For the first and the second quarters of 2023 and the next 12 months, businesses expect that the peso may appreciate against the US dollar and the peso borrowing and inflation rates may rise. Although businesses expect that inflation may breach the upper end of the National government’s 2–4 percent inflation target range for 2023-2024, inflation expectations among businesses may ease in the near term as the number of respondents who expected higher inflation declined compared with the fourth quarter 2022 survey results.

“Particularly, businesses are expecting that inflation for Q1 2023, Q2 2023 and the next 12 months may average at 7 percent, 6.9 percent, and 6.6 percent, respectively,” the BSP said.


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