FIRMS expect to hire more toward the fourth quarter of the year, consistent with their buoyant view on the solid macroeconomic fundamentals of the country, the Bangko Sentral ng Pilipinas said.
In a survey of the country’s publicly listed companies, the BSP said the employment outlook index showed that respondents across all sectors would continue hiring in the next quarter on the back of indicated expansion plans.
“The increase in the employment outlook index supports expectations of higher growth in the remaining months of the year,” the central bank said.
By sector, construction and services remained the most optimistic in their employment outlook with confidence indices of 55.2 percent and 59.2 percent, respectively.
According to monetary authorities, the more favorable outlook of the services sector was largely driven by brighter prospects in the financial intermediation, community and social services, and hotels and restaurants sub-sectors.
The BSP said firms from this sector attributed their more confident outlook to the sound macroeconomic fundamentals, good governance as well as expected business expansion arising from the surge of foreign investment inflows.
The more favorable expectations of the construction sector drew support from the expected upsurge of infrastructure projects under the Public-Private Partnership Program, the large-scale investments by public utility companies and continued demand by the private sector.
The number of firms with expansion plans as well as the average capacity utilization increased during the survey period, according to the BSP.
It said that about one in every four respondent firms in the industry sector or 26.6 percent indicated expansion plans in the fourth quarter compared with 24.7 percent during the previous quarter.
The BSP said respondent firms attributed the improved business sentiment to the expectations of rising demand, increasing export prices of commodities in the world market—particularly metal—improving business operations in Japan, and the introduction of new product lines.
Although companies were upbeat for the rest of the year, the top three constraints were competition, weak demand leading to low sales volume, and unclear economic laws—such as double standard in implementation of laws, red tape, outdated labor laws and unclear applications of tax laws among others.
The survey was conducted from July 1 to August 17 among 1,619 firms nationwide.
Respondents were drawn from the Securities and Exchange Commission’s Top 7,000 corporations. –LAILANY P. GOMEZ REPORTER, Manila Times
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