Exporters’ Confidence Level Is Improving

November 24, 2012, 12:08pmBy LEE C. CHIPONGIAN

Philippine exporters’ confidence level is rising and the outlook for increased international trading has turned more optimistic this quarter.

 “Businesses involved in international commodity trading (exporters and importers) were more optimistic in the fourth quarter,” according to the Bangko Sentral ng Pilipinas (BSP) based on the latest survey results on businessmen’s confidence level.

 “Importers were the most optimistic as they expected brisker consumer demand during the holiday season,” said the BSP. The Business Expectations Survey, released quarterly, noted that exporters showed the “biggest improvement in sentiment” because of the improved investor confidence and introduction of new products in the market.

 For businesses dealing with both the exporting and exporting activities, the outlook is less positive, said the BSP. “The majority of firms in this group was affected by recent developments in the industry such as lack of supply of raw materials, the ‘no fishing’ season for sardines, herrings and mackerel in the Visayan seas and Zamboanga Peninsula, and banning of plastic bags,” said the central bank.

These issues seem to have affected the exporters’ outlook for the next quarter or for the early months of 2013. “For the quarter ahead, the outlook of firms across all trade groups (have) declined.”

Philippine export earnings as of end-September grew 7.2 percent to $40.067 billion from $37.376 billion posted in the same period in 2011. For the month of September, exports rose by 22.8 percent year-on-year to $4.784 billion. The growth was an improvement from August’s nine percent decline.

Based on National Statistics Office data, the increase in merchandise shipments of tuna, metal components, fresh bananas, and woodcrafts and furniture contributed much to the growth for the given period. The exports of ignition wiring set and other wiring sets used in vehicles, aircrafts, and ships, petroleum products, coconut oil, and electronic products also showed growth.

Japan remains the biggest destination for Philippine exports followed by the US and China. Singapore and Thailand are also two of the top export destinations.

The BSP’s BES latest results showed that overall, the business confidence of Filipino entrepreneurs are more buoyant in the last quarter of the year.

The optimistic outlook were attributed to: the increase in orders and start of new projects leading to higher volume of production; the expected increase in consumer demand during the Christmas and palay harvest seasons; expansion of businesses and new product lines; and the favorable macroeconomic conditions in the country, particularly low inflation and interest rates, higher foreign investment inflows and the steady stream of overseas Filipinos’ remittances.

Other factors that are contributing to the optimistic sentiments are the introduction of new and enhanced business strategies; the possible further credit rating upgrade for the Philippines; and the continued confidence in the administration.

Outlook on inflation and the peso are generally stable. “More (businessmen) expected the peso to appreciate in the fourth quarter and first quarter of 2013,” said the BSP. The expectations of the peso’s sustained appreciation will be backed by strong remittances, foreign investments, recovery of export demand and receipts from the business process outsourcing sector.

Filipino business expects interest rates to decline, in the meantime, in the fourth quarter and the next. The BSP has cut rates by 100 basis points since January.

As for the BES’ forward looking survey for the first quarter of 2013, the central bank said it seemed to be less optimistic.

The “less sanguine outlook” was due to the seasonal slack in demand after the holiday season, said the report. Other reasons cited were the lack of supply of raw materials and low sugar prices in the world market that affected the sentiment in the industrial sector.

The BES was conducted from October 1 to November 15 and tallied as respondents 1,576 firms.

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