Businesses are scaling back their hiring plans in the coming months, amid an expected slowdown in economic activity in the first quarter of next year relative to the peak holiday and harvest season in December.
The Bangko Sentral ng Pilipinas (BSP) said fewer companies are planning to expand their operations and hire more staff amid uncertainties in the economic environment due to volatile global conditions.
“[Businesses] attributed their less sanguine outlook to the seasonal slack in demand after the holiday season and the political noise brought about by the pork barrel issue,” the BSP said in a report last week.
The BSP’s employment outlook index, which is a component of the quarterly Business Expectations Survey, settled at 23.6 percent for the fourth quarter of the year, lower than the 31.7 percent in the July to September period.
This indicates that there were still more firms that expect to hire more employees than there were that said they would keep their headcounts steady. The index score is the difference in the percentage of the number of companies that said they would hire more people than those that did not.
By sector, the employment outlook of the construction sector was steady, with demand for new homes and offices expected to remain buoyant in the coming months. The decline was mainly seen in the services, industry, wholesale and retail, and trade sectors, the BSP said.
The lower employment index was mirrored by a similar measure of companies with plans to expand their operations. According to the BSP, the net percentage of businesses with expansion plans declined to 30.5 percent from the previous 32.1 percent.
Across sub-sectors, mining, quarrying and electricity, gas and water recorded the most robust expansion plans, the BSP said. However, agriculture and manufacturing firms, which were less optimistic, dragged down the index.
Last week, the BSP said the overall confidence index of the Business Expectations Survey rose to 52.3 percent for the fourth quarter from 42.8 percent the previous three-month period.
However, the forward-looking confidence index for prospects in the first quarter of 2014 fell to 40.7 percent from an all-time high of 60 percent in the last survey.