The first quarter Business Expectations Survey (BES) released by the Bangko Sentral ng Pilipinas (BSP) on March 30 showed an increase in the confidence index (CI) to 34 percent from 23.9 percent in fourth quarter of 2022.

The BES is a quarterly survey presenting entrepreneurs’ views on the Philippines’ business situation. The results provide advance indication of the direction of the change in overall business activity in the economy.

The improvement in the business outlook was driven by expectations of higher consumer demand amid the full reopening of the economy, increased business activities, sustained economic recovery, as well as the emergence of new business opportunities in healthcare, manufacturing, and construction sub-sectors.

Heightened optimism for the construction sector stemmed from the anticipation of new projects and good weather conditions, while favorable business sentiments for services were mainly due to expectations of strong demand in the tourism, banking, and education sub-sectors.

Moreover, the improved outlook for the industry and wholesale and retail trade sectors was attributed to higher sales projection as economic recovery gains further traction.

Likewise, the overall CI for the next 12 months increased to 61.9 percent from the previous quarter’s result of 46.2 percent. The increase in confidence can be attributed to respondents’ optimism on higher demand/sales, a fully reopened economy, better business conditions, and new business opportunities.

Industry firms with expansion plans notably rose to 26 percent from 22.9 percent in fourth quarter of 2022, reflecting the increase in the following sub-sectors: mining and quarrying (from 7.3 percent to 20.4 percent), manufacturing (from 22.5 percent to 25.3 percent), and the agriculture, fishery and forestry (from 16.4 percent to 23.6 percent).

In particular, the continued expansion of manufacturing is reflected in car sales, which posted double-digit year-on-year (YoY) growth rates for commercial (29.0 percent) and passenger (21.6 percent) vehicles in February 2023.

Production volume and value in manufacturing grew double digits in January 2023. The Volume of Production Index (VoPI) recorded a year-on-year increase of 10.6 percent, faster than 4.2 percent in December 2022. The upturn in VoPI was mainly due to food, transport equipment, and electrical equipment.

Meanwhile, the Value of Production Index (VaPI) recorded a year-on-year growth of 15.4 percent, faster than the December 2022 annual growth of 9.5 percent and January 2022 growth of 15.1 percent. DOF Communications Office