AMID better prospects this election season, more firms are planning to hire additional workers and expand production in the second quarter, results of the Bangko Sentral ng Pilipinas’ latest Business Expectations Survey (BES) show.
The employment outlook index jumped to 27.2 percent for the second quarter from the 19.5 percent recorded in the first quarter this year.
“This indicated expectations of an overall increase in the number of new employees to be hired for the second quarter of the year,” the BSP said.
Businesses usually take advantage of strong demand for goods and services related to candidates’ campaign activities ahead of the national and local elections, which will be held this May.
The BSP said more jobs were expected to be generated in the construction and services sectors during the April to June period.
The employment outlook for the construction sector in the second quarter peaked to 48.2 percent—the highest since the third quarter of 2014.
For services, the employment index reached 39 percent, a record-high since the fourth quarter of 2012.
The BSP also noted the percentage of enterprises in the industry sector that have expansion plans for the second quarter was “broadly steady” at 31.3 percent.
“Among sub-sectors, agriculture, fishery and forestry, and mining and quarrying recorded stronger expansion plans while those of manufacturing were steady from a quarter ago,” the BSP added.
As for business operations, the BSP said that “in anticipation of brisker business for the second quarter, the outlook of firms on the volume of business activity for the quarter ahead turned more optimistic across sectors.”
As a whole, the BES’ overall confidence index (CI) for the second quarter rose to 49.6 percent from 43.9 percent during the previous quarter’s poll. This reflected a further increase in the number of optimists, who outnumber pessimists, for the next quarter.
The higher CI for the April to June period “suggested that economic growth could be higher for the [second] quarter,” the BSP said.
According to the BSP, respondents were more bullish about the second quarter primarily due to the following: election-related spending in the run-up to the elections, sustained increase in orders and projects leading to higher production volumes, anticipated rise in demand during summer and the school enrollment period.
“For the quarter ahead, the outlook of firms across trade groups improved, following expectations of an uptick in consumer spending during the summer and enrollment seasons, improvement in the collection of accounts receivables, further decline in prices of oil and other raw materials, recovery of electronics exports, completion of business expansion and product development initiatives, and improving conditions after the elections,” the BSP said.
On a per sector basis, the BSP said firms in the industry, wholesale and retail trade as well as services sectors were more bullish on their prospects for the second quarter, while construction companies’ outlook were “less positive” amid expectations of a lull in construction activities during the period.