According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest Newsbriefs, a weekly digest produced by IDEA, Inc. to highlight the most recent national and international economic events, as said by Bangko Sentral ng Pilipinas (BSP), business sentiment remarkably hits a record high in the second quarter of the year, sustained by the country’s investment grade credit rating and the previous midterm elections. This displayed the fact that businesses were bullish in their general outlook on the economy from April to June. Optimism for the period went up to 54.9 percent in the overall confidence index of the Business Expectations Survey (BES). So far the particular record was the highest since the start of the central bank’s use of BES in 2007. It exceeded the reigning 50.6 percent acquired in the fourth quarter of 2010.
Per IDEA, based on survey respondents, rise in optimism resulted from rapid business caused by election-related expenditures, as noted by BSP. Apart from past elections, it was also attributed to great conditions of sectors such as manufacturing, trade, construction and real estate ones. Seasonal uptick is another notable factor. Above all, business confidence was stimulated due to the country’s strong macroeconomic fundamentals and investment grade status.
Furthermore, according to the same report, to deal with losses which reached a record high in the previous year, the Bangko Sentral ng Pilipinas (BSP) is in the process of recommending amendments to Republic Act 7653 or the New Central Bank Act. So far, the most notable change includes expansion of capitalization to a higher degree in proportion with the current growth of the economy and the financial system. Moreover, BSP pursues formal deal with the government when it comes to sharing gains and losses.
Likewise according to a report released by the Bureau of Treasury, as of end-March, the outstanding debt of the government increased by 4 percent from the first quarter of last year, exhibiting more borrowings from domestic lenders. In the end of the year’s first quarter, the government’s debt stock added up to Php5.281 trillion, jumping 3.78 percent from Php5.089 trillion in the same period in 2012. Nevertheless, the end-March record declined by 0.82 percent from Php5.325 trillion established as of the second month of the year.
Lastly, in spite of a plunge in poverty claims during the first quarter, a Social Weather Stations (SWS) survey which was conducted in the period, revealed the worsening of hunger among families in the country. The March 19-22 poll came up with 19.2 percent of the total number of respondents who said they experienced having nothing to eat, amounting to approximately 3.9 million Filipino families and higher than 16.3 percent of December last year. SWS stated that hunger rose substantially between the last quarter of 2012 and first quarter of 2013, saying that it rose among both the poor and the non-poor according to the researchers of IDEA.
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