As opposed to rosy consumer expectations, business confidence dipped further due to weak peso, higher borrowing and inflation rates, affecting expansion and hiring plans for the last quarter of 2022 and in the next 12 months, according to a central bank survey.
For the next quarter, the business sentiment also weakened for the second consecutive quarter as the overall CI decreased to 43.9 percent from 46.4 percent in the previous quarter. “Businesses expected the peso may continue to depreciate against the US dollar and the peso borrowing and inflation rates may rise in Q3 and Q4 2022, and the next 12 months,” said the BSP.
For the fourth quarter, the outlook was still “less buoyant” for importers and exporters, but more optimistic for domestic-oriented firms and dual-activity firms. For the fourth quarter and the next 12 months, the BSP said the surveyed firms also indicated less optimistic views based on their business operations, the volume of business activity and total orders booked.
For the last quarter of the year, the BSP said the percentage of firms that look forward to hiring more people has declined but the percentage of firms with expansion plans have somewhat improved.