The percentage of Philippine companies with plans to expand and hire more workers in the fourth quarter of the year against the total firms surveyed has declined, results of the latest central bank Business Expectation Survey (BES) showed.
Although the statement by the Bangko Sentral ng Pilipinas (BSP) on the survey gave no specific figure for the number of such companies, it said the confidence index (CI) of such companies slipped to 28.1 percent in the latest survey from 30.3 percent in the third quarter.
The CI is calculated as the net of percentage of companies that answered in the affirmative and the percentage of firms that answered in the negative with respect to their views on a given indicator.
The lower percentage of businesses in the industry sector with expansion plans in October to December was “due largely to weaker expansion plans of firms in the manufacturing sub-sector,” the statement said.
The CI for expansion plans in the manufacturing sub-sector declined to 27.5 percent from 30.9 percent.
Other industry sub-sectors, however, registered higher CIs for hiring and expanding in the fourth quarter, particularly mining quarrying (27.2 percent) electricity, gas and water (36.3 percent), and agriculture, fishery and forestry (29.5 percent).
Meanwhile, consistent with the decline in the overall expansion plans, the employment outlook for the fourth quarter also eased slightly to 23.6 percent from 23.8 percent.
The central bank said that a relatively steady but positive reading “indicates that more firms will continue to hire new employees than those that said otherwise.”
“The outlook of firms on their hiring intentions was more optimistic in the wholesale and retail trade and industry sectors, steady in services, and less upbeat in construction,” it said.
The expansion and employment outlooks are consistent with the less optimistic business sentiment for the third quarter of 2016, which fell to 45.4 percent from 48.7 percent in the second quarter.
Respondents based their responses on the expected interruption of business activities during the rainy season, as well as a slack in demand during the planting and closed milling seasons; lower consumer demand as households prioritized enrollment expenses; implementation of stricter mining policies that put some mining concessions on hold; closed fishing season in Davao Gulf from July to September; stiff competition; and concerns over the weak global economy.
The BES is a quarterly survey of firms drawn at random from the Securities and Exchange Commission’s top 7,000 corporations ranked in 2010 and Business World’s Top 1,000 Corporations in 2014.
The respondents consisted of 1,474 firms nationwide, and the survey was done between July 1 and August 12.