Philippine pessimism to linger until Q 1 2009--poll

This just shows how the recession is global. The Philippines exports quite a bit especially to the US. With US demand slowing this will effect exports. Interesting that areas outside of the Manila capital area are less pessimistic about prospects. This is from the Daily Tribune.


Pessimism to linger until Q1 ’09 — poll
By Ruben Hortelano
11/21/2008
Business sentiment remained dim until the next quarter with the overall confidence index at negative 6.8 percent in the last quarter of the year and at negative .5 percent in the first quarter of next year, the latest business confidence survey of the Bangko Sentral ng Pilipinas (BSP) showed.
The BSP, nevertheless, said the confidence index for the last quarter was 6.1 percentage points higher from the previous quarter with the moderate improvement being attributed to the recent easing of world oil prices and expectations of a seasonal pick-up in demand and higher remittances from Filipinos working overseas during the Holiday season.
“The bearish outlook on the macroeconomy mirrored the weak global sentiment due to the global economic slowdown and the financial turmoil,” according to BSP.
BSP Gov. Amando Tetangco Jr. said survey respondents attributed their negative sentiment largely to expectations of an economic slowdown and lower exports, especially to the US, the country’s major export destination.
Respondents also cited the decline in consumer demand for certain commodities, particularly milk and other milk-based products due to the melamine scare, the peso depreciation and political noise for their bearish mood.
BSP director for economic statistics Lou Sicat said most respondents, however, remain confident of higher sales in the domestic market during the long Christmas holidays when Filipinos tend to splurge.
Businesses, however, expect to spend only for the purchase of more capital equipment and not for the hiring of new employees.
Sicat said the most pessimistic of the business sectors was the trade sector, while the most optimistic were in the construction sector.
Sicat said the decline in business sentiment was evident across all sectors as pessimists outnumber optimists except in the construction sector.
The construction sector posted a positive index of 6.6 percent but the services sector showed an index of negative 6.3 percent.
The industry as well as the wholesale and retail sectors similarly posted negative indices of negative 5.8 percent and negative 9.8 percent, respectively.
Perceptions as to the availability of credit worsened to negative 7.4 percent in the fourth quarter from negative 1.6 percent in the survey three months earlier.
Banks were seen to tighten their already tight credit standards further, making credit less readily available.
The employment index, which stood at 8.3 percent in the third-quarter survey, slid to a negative 1.4 percent.
Sicat said the survey was conducted from Oct. 1 to Nov. 5 this year on 1,242 firms listed by the Securities and Exchange Commission.
The response rate was 75.4 percent, higher than previous quarter response rate of 74.3 percent.
Respondents from the areas outside the National Capital Region were less pessimistic than their counterparts from the NCR. By contrast, NCR respondents were pessimistic about general economic conditions in both the current quarter and the next.
The average capacity utilization of the industry sector in the last quarter of 74.8 percent was lower by 2.8 percentage points from its level in the previous quarter, and by more than 1 percentage point relative to its level a year ago.
Competition, weak demand leading to low sales volume, and high interest rates were cited by respondents as the major risks to their business prospects in the last quarter.