An updated report from Bangko Sentral ng Pilipinas (BSP) shows a drop in the employment outlook index down to 19.5 percent for the first quarter of 2016. Earlier, BSP reported an optimistic employment index at 22.3 percent.
“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,” according to BSP.
Results of the BSP survey signals that businesses are expected to slow down after the holiday spending splurge indicating a downswing for employment. Companies are less optimistic to expand their businesses early next year, particularly the construction and retail trade sectors, Rosabel Guerrero, director of the BSP’s Department of Economic Statistics (DES) said. “Among the sectors, firms in the construction and retail trade sectors were less optimistic while those in the industry and services sectors were steady in their hiring intentions,” Guerrero said.
Businesses expect a moderate consumer demand in early 2016, plummeting the overall confidence index at 43.9 percent. The third quarter report submitted by BSP saw an overall optimism in business at 51.3 percent for the next two years. BSP surveyed 1,514 firms and they cited the following major factors for an optimistic outlook:
- High consumer demand for the holidays
- main rice harvest and milling seasons;
- a steady flow of remittances from overseas Filipino workers; and
- early election-related spending
“Moreover, the percentage of businesses with expansion plans in the industry sector for Q1 2016 was broadly unchanged at 31.9%. This was largely driven by the steady outlook of the manufacturing sub-sector,” according to BSP.
Generally, firms look ahead with business confidence in 2016 anticipating favourable macroeconomic structures to be sustained including within-target inflation and stable exchange rates and interest rates.