Firms to expand, hire more in Q2

By Lawrence Agcaoili (The Philippine Star) Updated February 27, 2017 – 12:00am http://www.philstar.com/business/2017/02/27/1676104/firms-expand-hire-more-q2 MANILA, Philippines –  More companies are set to expand and hire additional workers in the second quarter amid the rebound in business optimism, 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 proportion of businesses with expansion plans for the second quarter improved to 34.9 percent from 31.7 percent the previous quarter. Among sub-sectors, agriculture, fishery and forestry recorded the strongest expansion plans, followed by manufacturing, electricity, gas and water as well as mining and quarrying. “Consistent with their favorable employment outlook, the percentage of industrial firms with expansion plans increased,” she added. Guerrero said the employment outlook index for the next quarter improved to 27.4 percent from 19 percent the previous quarter. “Consistent with the more optimistic view for the next quarter, the employment outlook index for the next quarter increased compared to the last quarter’s survey. This suggests that more firms will continue to hire new employees than those that indicated otherwise. Firms across all sectors were bullish in their hiring intentions,” Guerrero said. She pointed out confidence of businesses increased across all employment size, with the large-sized firms registering the highest index in the second quarter. The survey showed optimism was higher in the industry, wholesale and retail trade as well as services sector but was lower in construction. “Respondents optimistic views were driven by expectations of higher energy sales, business expansion with the opening of new branches and start of operation of new plants, and new projects for the year,” she said. A lull in new projects, Guerrero said, is expected to affect businesses with the outlook of construction firms turning less optimistic. On the other hand, the outlook of firms in the services sector was more upbeat on account of the usual uptick in demand during summer, new investment opportunities, increase in hiring intentions, and expectations of brisker business due to the hosting of the Asean Summit in April. The wholesale and retail trade sector was also bullish due to expectations of a more robust demand during the summer, harvest and enrollment seasons, business expansion, and improvement in product lines. This translated to a higher confidence index of 47.2 percent in the second quarter from 34.5 percent in the previous quarter pointing to sustained economic expansion in the country. In the first quarter, the country’s business confidence index hit its lowest level in 10 months after slipping to 39.4 percent from 39.8 percent the previous quarter due to the usual slowdown after the Christmas season, investors’ wait-and-see attitude due to the impact of the Trump policies on business process outsourcing and rising oil prices.