MANILA, Philippines—Expectations that the country indeed will get an investment grade this year has created a mood for expansion and for hiring more workers among enterprises, the Bangko Sentral ng Pilipinas said.
The BSP said the firms covered by its latest survey indicated plans to expand operations and employ more people in the second quarter in the belief an investment grade would help the country attract more foreign direct investments (FDIs). Higher FDIs mean an increase in various business opportunities—such as demand for inputs—that existing firms can supply.
“Firms indicated expansion plans, and the anticipation of an investment grade is cited among the reasons. We hope these plans will be realized,” BSP Assistant Governor Ma. Cyd Tuaño-Amador told reporters Friday, citing results of the central bank’s latest quarterly survey completed on Feb. 8.
The results of the survey, which the BSP conducted among 1,555 firms nationwide, showed that the employment outlook index, which reflected plans to hire additional workers in the coming quarter, remained in the positive territory and settled at +23 percent. This compares with the +22 percent registered in the previous quarterly survey and the +24 percent recorded in the survey done in the same period of 2012.
Amador said the employment outlook index has been in positive territory due to a string of positive developments in the Philippine economy. In the latest survey, Amador said the anticipation of a credit-rating upgrade was one of the highlighted reasons for optimism.
The employment outlook index is computed as the difference between respondent-firms that cited plans to hire more workers in the coming quarter and those that said they had no plans to increase their workforce.
The BSP said in the report that the interest in hiring more workers was across all sectors, with firms from the services sector had the biggest appetite to employ more people.
The Philippines has enjoyed a string of favorable credit-rating actions over the past two years and is rated just a notch below investment grade by all three international major credit-rating firms—Fitch Ratings, Moody’s Investors Service and Standard & Poor’s.
Economists from the government and the private sector expect the country to get an investment-grade rating toward the end of the year.
The BSP said the plans of firms to expand and hire more workers should help improve the employment situation in the country.
Latest employment data showed that unemployment in the country stood at 6.8 percent in the third quarter of 2012 compared with 6.4 percent in the same period in 2011.