Fewer companies are set to expand and hire additional workers amid the expected slowdown in economic activity in the third quarter, results of a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed. Jun Acculador/CC BY-ND, File

Fewer companies to expand, hire in Q3
Lawrence Agcaoili (The Philippine Star) - May 28, 2017 - 4:00pm

MANILA, Philippines -  Fewer companies are set to expand and hire additional workers amid the expected slowdown in economic activity in the third quarter, results of a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

Rosabel Guerrero, director of the BSP’s Department of Economic Statistics, said results of the latest Business Expectations Survey (BES) showed the percentage of businesses with expansion plans for the third quarter slipped slightly to 34.6 percent from 34.9 percent in the previous quarter.

Likewise, she said the employment outlook index for the next quarter remained positive across sectors although lower at 24.7 percent from 27.4 percent in the previous quarter.

“Employment outlook remains positive and expansion plans are almost unchanged,” she said.

According to her, the volume of business activity index also declined to 44.7 percent from 46.7 percent.

Among sub-sectors, agriculture, fishery and forestry; mining and quarrying as well as electricity, gas and water recorded the strongest expansion plans while those of manufacturing were slightly lower from a quarter ago.

Guerrero said business outlook is less optimistic in the third quarter with the confidence index slipping to 42.7 percent from 47.2 percent in the previous quarter.

She explained the respondents of the survey cited seasonal factors as the major reasons behind their less upbeat outlook.

She added the expected interruption of business activities during the rainy season as well as lower consumer demand as households prioritize enrolment expenses in the third quarter could result to slower business activities.

The survey revealed businessmen turned more upbeat about the country’s economic prospects in the second quarter with the overall business confidence index improving to 43 percent in the second quarter from 39.4 percent in the first quarter.

The increase in the business confidence index in the second quarter ended three consecutive quarters of steady decline in the overall business confidence index.

Weaker-than-expected private consumption pulled down the gross domestic product (GDP) growth to 6.4 percent in the first quarter from 6.6 percent in the fourth quarter last year.

Economic managers penned a GDP growth of 6.5 to 7.5 percent this year after accelerating to 6.9 percent last year from 5.9 percent in 2015 due to robust domestic demand and strong investment growth.

Guerrero said businesses cited the anticipated increase in demand during summer with the influx of domestic and foreign tourists, enrolment, and harvest periods as one of the factors for their more optimistic outlook.

She added the respondents of the BES also cited the increase in orders and production volume, expansion of businesses and new product lines, introduction of new and enhanced business strategies and process, and inflows of investments with the continuing trust in government leadership.

“Their more positive outlook was also driven by expectations of higher disbursements by the government on infrastructure and other development projects, and brisker business due to the hosting of the 30th Association of Southeast Asian Nations Leaders’ Summit,” Guerrero said.

 

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