Local firms in hiring mode – survey

MANILA, Philippines – A survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed that more and more companies are looking at hiring additional employees after rationalizing their workforce during the height of the global economic meltdown.

Rosabel Guerrero, director of the BSP’s Department of Economic Statistics (DES), said the employment outlook index for the next quarter reached an all-time high of 22 percent in the quarterly Business Expectations Survey (BES) for the first quarter of 2010.

“This is another indicator supporting expectations of an economic recovery,” Guerrero said.

This was the highest since the employment outlook index reached a previous high of 21.7 percent in the first quarter of 2008 before plunging to negative territories in the fourth quarter of 2008 as well as first and second quarters of 2009 due to the impact of the global financial crisis.

She pointed out that the employment outlook was particularly favorable for the construction and services.

She added that bullish sub-sectors include financial intermediation, renting and business activities, real estate as well as hotel and restaurant that are already gearing up for heightened demand during the summer season and the May political exercise

Guerrero said the employment outlook index reached a new all-time high despite the fact that fewer companies expressed plans to expand their operations in the Philippines due to their excess capacities.

“As firms in the industry sector still have excess capacity, fewer firms or 19.9 percent of the respondents indicated expansion plans for the first quarter this year compared to the last quarter’s survey wherein 23.7 percent indicated their plans to expand their operations in the country,” she added.

Respondents of the survey placed their average capacity utilization at 72 percent in the first quarter of the year from about 69.8 percent in the last quarter of 2009.

Guerrero said respondents cited competition, weak demand leading to low sales volume, and financial problems as the major business constraints in the first quarter of the year.

The BSP earlier said the business confidence index rose sharply to a two-year high of 39.1 percent for the first quarter of the year from 22 percent in the fourth quarter of last year showing that businessmen are more optimistic that the domestic economy would recover from the worldwide economic debacle this year.

This was the highest since the fourth quarter of 2007 when the business confidence index reached 48 percent and has continued to increase for the third straight quarter after a negative growth of 23.9 percent in the first quarter of last year.

The Q1 2010 BES was conducted from Jan. 5 to Feb. 12. There were 1,664 firms surveyed nationwide and the respondents were drawn from the Top 7,000 Corporations of the Securities and Exchange Commission (SEC). –Lawrence Agcaoili (The Philippine Star)