Philippines outlook dims amid graft scandal, US slowdown: survey
MANILA (AFP) — Business confidence in the Philippines has suffered a knock due to growing political unrest and an economic slowdown in the United States, according to a central bank industry survey released Friday.
Firms cited "local political noise", concerns over a possible US recession, reduced export competitiveness due to the strong peso, and a relentless surge in oil prices, for their "cautious outlook," the monetary authority said in a statement.
The first quarter survey was made as President Gloria Arroyo tries to fight off fresh corruption allegations following a robust 2007 that saw economic growth reach a 31-year high 7.3 percent, a 20-year low inflation rate of 2.8 percent and the lowest budget deficit in 10 years.
The central bank said 26 percent of respondents were in the export sector, an area that accounts for about 45 percent of the Philippine economy.
The survey found that the general outlook for all sectors remained positive, particularly for the construction and services sectors.
Average capacity use for all sectors rose 6.8 index points to 83.1 percent compared to late 2007, and they expected to hire more workers in the three months to June period.
Respondents expect the peso to remain strong for the rest of the first half, while anticipating higher inflation but lower interest rates.
The central bank said it polled 1,258 companies between January 7 and February 6.
