The employment outlook for the first quarter of 2016 declined, as more companies have no plans to expand their business operations, results of a survey conducted by Bangko Sentral ng Pilipinas show.
The Business Expectations Survey for the fourth quarter 2015 showed the employment outlook index for the next quarter decreased to 19.5 percent from 22.3 percent in the last quarter’s survey.
“This indicates that more firms will continue to hire new employees than those that said otherwise, although the number of new hires could decrease compared to the previous quarter’s survey,” the Bangko Sentral said.
The survey was conducted from Oct. 1 to Nov. 16, 2015 involving 1,514 firms nationwide.
Companies in the construction and retail trade were less optimistic while those in the industry and services sectors were steady in their hiring intentions. The percentage of businesses with expansion plans in the industry sector for the first quarter was broadly unchanged at 31.9 percent.
“This was largely driven by the steady outlook of the manufacturing sub-sector. All other industry sub-sectors recorded weaker expansion plans,” it said.
The survey showed domestic competition and insufficient demand remained the major risks to business operations as cited by respondents in the fourth quarter.
Around 52.6 percent of those surveyed cited domestic competition as the leading business constraint, while 26.6 percent of respondents mentioned insufficient demand leading to low sales volume.
“However, the percentage of businesses that identified the above-mentioned constraints continued to show a broadly declining trend. The easing of these business constraints could indicate that business conditions are improving,” the Bangko Sentral said.
The survey also showed that businesses were anticipating favorable macroeconomic fundamentals to prevail in the current and next quarters as respondents continued to expect within-target inflation and stable exchange rates and interest rates.
More respondents expected inflation to increase for the current quarter compared with those who said otherwise. For the next quarter, respondents who expected inflation to go up outnumbered those that held the opposite view but the number that said so declined relative to the previous quarter.
Businesses expected the rate of increase in commodity prices to remain low at 2.1 percent for the fourth quarter of 2015 and 2.3 percent for the first quarter next year.
Inflation in the first 11 months stood at 1.4 percent, well within the government’s official target of 2 to 4 percent for the year. Inflation in November rose to 1.1 percent from 0.4 percent in October.