THE employment outlook and the number of companies with expansion plans in the third quarter decreased this year, a survey of the Bangko Sentral ng Pilipinas showed over the weekend.
The Business Expectations Survey in the second quarter showed the employment outlook index for the next quarter declined to 23.8 percent from 27.2 percent in the last quarter’s survey.
“This indicates that more firms will continue to hire new employees than those that said otherwise, although the number of new hires could decrease compared to the previous quarter’s survey,” Bangko Sentral said.
The survey was conducted from April 1 to May 17, 2016, involving 1,482 firms nationwide.
Companies across sectors were less optimistic, except those in the wholesale and retail trade areas, which were more upbeat in their hiring intentions.
The percentage of businesses with expansion plans in the industry sector for the third quarter also decreased to 30.3 percent from 31.3 percent a quarter ago.
“The outlook was weaker across industry subsectors, except for the manufacturing subsector which recorded steady expansion plans. These developments are consistent with the lower outlook in the industry sector for the next quarter,” it said.
The same survey showed that business confidence turned more bullish in the second quarter this year due to the more optimistic outlook on the economy.
The overall confidence index rose to 48.7 percent from 41.9 percent in the first quarter, indicating more businesses were optimistic on the country’s economic prospects for the second quarter.
Respondents were more upbeat due to election-related spending in the run-up to the May 9 national elections; sustained increase in orders and projects leading to higher volume of production; anticipated rise in demand during the dry season; and introduction of new and enhanced business strategies and processes.
Other reasons for the more bullish outlook are expansion of businesses and new product lines, and improving conditions in the local economy as well as in some advanced economies, especially in Asia.
“Their more positive outlook was further driven by expectations of more favorable macroeconomic conditions in the country, particularly low inflation and stable interest rates, and sustained foreign investments inflows,” the Bangko Sentral said.
The sentiment of businesses in the Philippines mirrored the improving business outlook in South Korea, Canada, France, and The Netherlands but was in contrast to the deteriorating views of those in the US, United Kingdom, Germany, China, and Australia.
For the third quarter, however, business optimism remained high although the outcome was lower compared with the previous quarter’s results, with the confidence index declining to 45.3 percent from 49.6 percent.
Respondents cited the interruption of business activities during the rainy season, lower consumer demand as households prioritize enrollment expenses, and expectations of higher oil prices as some of the reasons for the lower optimism in the third quarter.