JOB prospects will turn more favorable in the second quarter this year, as more companies gear up for heightened demand during the summer season and the May political exercise, according to the Philippine central bank.
According to its Business Expectations Survey, the Bangko Sentral ng Pilipinas (BSP) said the employment outlook index for the next quarter will reach an all-time high of 22 percent.
The outlook was particularly favorable for the construction and services sectors, particularly financial intermediation, renting and business activities, real estate and hotel and restaurant sub-sectors since these companies expect to ram up summer and election-related jobs.
In the industry sector, firms however still have excess capacity, with only 19.9 percent of survey respondents indicating they would expand their businesses in the first quarter. The index stood at 23.7 percent last year.
Respondents indicated that competition, weak demand leading to low sales volume and financial problems were the key challenges to business activity during the quarter.
The central bank noted that these three business constraints were the same factors the respondents had identified since the first quarter 2009 survey round.
The BSP survey showed that credit access continued to improve in the first quarter this year. Also, financial conditions improved but remained tight as the index was still in the negative territory.
According to the BSP, these only indicated that monetary policy easing measures that started in December 2008 were able to address the liquidity requirements of the economy and provided sufficient credit to businesses for their operations.
Respondent firms also expect inflation and interest rates to go up and the peso to appreciate in the first and second quarters this year.
The expected increase in consumer prices could stem from the possible shortfall in the supply of agriculture products because of El Niño weather conditions and the impending power rate adjustments.
The central bank, however, said these factors could be tempered by the expected appreciation of the peso.
Standard Chartered Bank and BNP Paribas earlier said that the Philippine currency would appreciate to between 43 and 43.50 within the year on the back of the BSP’s gradual implementation of its exit strategy. –LAILANY P. GOMEZ Reporter, MAnila Times
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