Job prospects turn less upbeat in 3Q

FIRMS are less upbeat about employment prospects in the third quarter amid the drop in business confidence in the domestic economy, the Bangko Sentral ng Pilipinas (BSP) said.

In a survey of the country’s publicly listed companies, the employment outlook index showed that respondents would continue hiring in the next quarter, which the BSP said was another indicator of sustained growth in 2011.

By sector, construction and services were the most optimistic in their employment outlook at 31 percent and 32 percent, respectively.

However, the results were less buoyant compared with 36.9 percent and 38.3 percent recorded in the previous quarter.

The BSP said that respondents attributed the less favorable sentiment to the continued volatility in the global markets.

The survey also showed that about one in every four respondent firms in the industry sector or 24.7 percent indicated expansion plans for the next quarter. However, the number of respondents who said so declined from a quarter and a year ago.

Expansion plans were noted across all sub-sectors at 24.7 percent.

Respondents from the mining and quarrying sector continued to record the highest expansion plans at 41.8 percent, compared with the 24.3 percent in the agriculture sector.

This was followed by the manufacturing at 24.2 percent; and electricity, gas, and water sub-sector at 23.8 percent. Competition, weak demand leading to low sales volume, and financial problems were the factors that limited business activity in the previous quarter.

These top three business constraints were the same risks identified by respondents since the third quarter of 2009, the BSP noted.

Inflationary expectations are likely to remain high this year as the number of respondents who anticipated higher inflation and interest rates in the second and third quarters increased to 34.8 percent compared with the 21.3 percent in the previous quarter’s survey.

”The increasing costs of fuel and other commodities in the global market and the strong performance of the domestic economy contributed partly to the higher inflationary expectations of respondents,” the BSP said.

The stronger peso relative to the dollar, which would soften the impact of higher oil prices in the domestic economy, is perceived by respondents to continue in the current and next quarters.

Results of the Second Quarter Business Expectation Survey showed that the confidence index fell to 31.8 percent from the record high of 59.4 percent during the first quarter. –LAILANY P. GOMEZ REPORTER, Manila Times