Local firms still keen on expanding

MANILA, Philippines – The number of companies planning to expand their operations in the first quarter of next year remained steady amid the uncertainties brought about by the fragile economic recovery in advanced countries led by the US and the debt crisis in Europe, a Central Bank survey showed.

Teresita Deveza, acting deputy director of the Bangko Sentral’s Department of Economic Statistics (DES), said the Business Expectations Survey for the fourth quarter of 2011 showed the number of firms with expansion plans remained steady at 27 percent from the previous quarter’s 26.6 percent.

“About one in every four respondent firms in the industry indicated expansion plans for the first quarter of 2012. The number of respondents that indicated expansion plans was almost unchanged from a quarter ago,” Deveza stressed.

She pointed out that expansion plans in the manufacturing sub-sector remained steady while more companies in agriculture, fishery and forestry as well as electricity, gas, and water sub-sectors that signified expansion activities increased.

She added that less companies engaged in the mining and quarrying sub-sector signified expansion plans.

Data showed that the agriculture, fishery, and forestry sub-sector recorded the highest expansion plans with 41.9 percent, followed by the mining and quarrying with 41.1 percent, and electricity, gas and water with 41 percent

The manufacturing sub-sector recorded the lowest expansion plans with 24.9 percent.

According to Deveza, the business sector’s employment outlook softened to 37 percent from 39.3 percent but remained positive.

“Employment outlook declined but remained positive in all sectors, indicating a slowdown in hiring for the next quarter,” she said.

The business confidence index on own operations for the current quarter improved to 37.1 percent in the fourth quarter from 29.5 percent in the third quarter but declined to 32.5 percent from 51.6 percent for the first quarter of 2012.

Deveza said the business outlook index on the macroeconomy for the fourth quarter jumped to 38.7 percent from 34.1 percent but plunged to 36.1 percent from 53.9 percent for the first quarter of next year.

The Cabinet-level Development Budget Coordination Committee (DBCC) earlier estimated the country’s GDP expanding between seven and eight percent this year but is now looking at between 4.5 and 5.5 percent due to weak global trade as well as the political tensions in the Middle East and North African (MENA) nations.

The country’s gross domestic product (GDP) growth eased to four percent in the first half of the year from the revised 8.7 percent in the same period last year due to heavy government underspending and weak global trade.

The Philippines posted its strongest economic growth in 34 years after its GDP surged 7.6 percent last year, exceeding the revised growth target of five to six percent.

The Philippines barely escaped recession after its GDP growth slackened to 1.1 percent in 2009 from 3.8 percent in 2008 due to the full impact of the global financial crisis. –Lawrence Agcaoili (The Philippine Star)