Firms to expand, hire more in Q4 – BSP survey

MANILA, Philippines - Companies are set to expand their operations and hire more workers as businesses are bullish about the prospects in the fourth quarter of the year, a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

Teresita Deveza, deputy director of the BSP’s Department of Economic Statistics (DES), said results of the Business Expectations Survey (BES) for the third quarter showed the employment outlook and the number of firms with expansion plans increased for the fourth quarter.

Deveza said the employment outlook index for the fourth quarter increased to 22.3 percent from the previous quarter’s 20.7 percent.

“This indicates expectations of an overall increase in the number of new employees to be hired for the fourth quarter of the year,” she said.

She explained firms in the services and wholesale and retail trade sectors were more upbeat while companies engaged in the construction and industry sectors were less optimistic in their hiring intentions.

Despite the lower employment outlook for the industry sector, Deveza said the percentage of industrial firms with expansion plans increased to 32.9 percent from 29.1 percent last quarter.

She pointed out agriculture, fishery, and forestry recorded the strongest expansion plans, followed by electricity, gas and water, mining and quarrying, and manufacturing.

According to Deveza, companies have tagged domestic competition and insufficient demand as the major risks to their businesses.

Furthermore, companies see average inflation to fall within the two to four percent target set by the BSP.

Inflation averaged 1.9 percent in the first seven months of the year after easing to a new record low of 0.8 percent in July on the back of stable food and lower oil prices.

Companies also believe the peso would strengthen against the dollar with the anticipated strong inflows of overseas Filipinos’ remittances, business process outsourcing (BPO) services and tourism receipts, and foreign investments.

For the fourth quarter of the year, Deveza said business outlook turned more upbeat as the confidence index rose to 53.1 percent from the previous quarter’s 47.3 percent.

 “This reading suggests sustained economic growth in the last quarter of 2015,” she added.

The more positive outlook in the fourth quarter was traced to the expected uptick in consumer demand during the holiday, harvest, and milling season.

She also cited the increase in sales and orders translating to higher volume of production, business expansion in retail trade, manufacturing, finance, and business process outsourcing services.

Economic managers penned a gross domestic product (GDP) growth of between seven and eight percent this year. However, the GDP growth slowed down to 5.3 percent in the first half of the year from 6.4 percent in the same period last year due to lack of government spending and weak global demand.