Firms plan to hire more but are less upbeat on expansions

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Philippine companies plan to hire more workers in the last three months of the year while keeping a lid on expansions, results of the central bank’s Third Quarter Business Expectations Survey (BES) showed.

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Data released by Bangko Sentral ng Pilipinas on Friday said showed the confidence index of firms with expansion plans for the next quarter at 32.8 percent, down from 34.6 percent three months earlier.

The employment outlook, meanwhile, improved to 27.3 percent for the next quarter from 24.7 percent, with the volume of business activity index also strengthening to 49.6 percent from 44.7 percent.

The confidence indices are calculated as the net of the percentage of companies that answered in the affirmative and the percentage of those with the opposing view with respect to a given indicator.

“The employment outlook index for the next quarter improved due largely to the more positive sentiment of the services and wholesale and retail sectors offsetting the less optimistic outlook of the industry and construction sectors,” the Bangko Sentral said.

“This suggests that more firms will continue to hire new employees than those that indicated otherwise,” it added.

With regard to expansion plans, meanwhile, the BSP noted that the “agriculture, fishery and forestry, and mining and quarrying recorded stronger expansion plans while those of manufacturing, and electricity, gas, and water were slightly lower from a quarter ago.”

The expansion and employment outlooks are consistent with an improvement in overall business sentiment for the last three months of the year amid a drop in optimism for the current quarter.

The overall confidence index declined to 37.9 percent for July to September from 43 percent in April to June, attributed to seasonal factors such as a slowdown in business activities during the rainy season, the Marawi crisis and the declaration of martial law in Mindanao and the peso’s current weakness.

For the fourth quarter, however, the CI rose to 51.3 percent from 42.7 percent on expectations of an uptick in consumer demand during the holiday, harvest and milling seasons and the rollout of government infrastructure and other development projects, among others.

The latest BES, which polled 1,480 companies nationwide, was conducted from July 3 to August 18.

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