More jobs in Q2

MANILA, Philippines – Companies are expected to hire more in the second quarter with the expected rebound in economic activity after the usual slowdown in the first quarter, results of a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

BSP’s Department of Economic Statistics director Rosabel Guerrero said results of the Business Expectations Survey (BES) for the first quarter showed the employment outlook index rose to 27.2 percent from 19.5 percent in the last quarter.

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

In line with the bullish outlook on business activity for the next quarter of the construction and services sectors, she said their employment indices reached record-highs of 48.2 percent since third quarter of 2014 and 39 percent since the second quarter of 2012.

Furthermore, she said out the percentage of businesses with expansion plans in the industry sector for the second quarter of the year remained broadly steady at 31.3 percent.

Guerrero said agriculture, fishery, forestry, mining and quarrying recorded stronger expansion plans while those of manufacturing were steady from a quarter ago.

According to Guerrero, average capacity utilization for the current quarter decreased to 74.8 percent from the 77 percent registered last quarter.

Guerrero said the results of the survey showed business outlook turned more optimistic for the second quarter of the year with the confidence index rising to 49.6 percent from 43.9 percent in the last quarter’s survey.

 “The next quarter confidence index suggests that economic growth could be higher for the next quarter,” she added.

Factors cited by respondents, she said, included election-related spending in the run-up to the elections in May 2016, sustained increase in orders and projects leading to higher volume of production, and the anticipated increase in demand during summer.

She explained respondents also cited the introduction of new and enhanced business strategies and processes as well as expansion of businesses and new product lines.

Although more respondents continued to expect inflation to rise for the current and next quarters compared to those who said otherwise, businesses expected the rate of increase in commodity prices to remain low at 1.9 percent for the first quarter and 2.1 percent for the second quarter.

Inflationary pressures might arise from adverse weather conditions, election-related expenditures, holiday spending, peso depreciation and possible adjustments in utility rates but these could be tempered by lower global growth prospects and the continued slump in the prices of oil and other commodities.

Similarly, more respondents expect the peso to appreciate in the first and second quarter of the year compared to those who said otherwise.