Enterprises are expected to hire more workers in the third quarter as the business environment remains favorable, a survey conducted by the Bangko Sentral ng Pilipinas showed.
Results of the latest survey conducted from April to May showed that companies set to hire additional workers in the third quarter outnumbered those that said they had no plans to increase their workforce.
Over a thousand enterprises nationwide participated in the survey, the BSP said.
The employment outlook index—computed as the difference between the percentage of firms that have hiring plans and the percentage of those that will not take on more workers—stood at +14.5 percent.
According to the BSP, the survey results indicate that the economy may grow at a respectable pace this year, noting that additional employment increases overall income.
The most number of firms that signaled their intention to hire more workers were in the construction and services sectors, the BSP said.
Although the latest employment outlook index remained in the positive territory, it was still lower than the +23 percent reported in the previous survey.
Central bank officials said the decline in the index was due to the unfavorable developments abroad over the past few months. These developments, particularly the unrest in the Middle East and North Africa, as well as the disasters in Japan, are expected to dampen performance of businesses in the Philippines and the domestic economy in general.
The continuing unrest in some oil-producing countries has pushed up global oil prices. Higher oil prices tend to temper demand for non-essential goods.
Also, the disasters in Japan could slash its demand for Philippine-made goods. Japan is one of the biggest export markets for Philippine products.
“The effects of these events are expected to be temporary,” BSP Deputy Governor Diwa Guinigundo said.
Given this expectation, firms that are optimistic about expansion and employment still outnumber those that are pessimistic, Guinigundo said.
Also, the survey showed that respondents in general felt that credit had become more accessible than the previous three months.
As such, they expect that there will be available financial support for their expansion plans.
The credit access index—computed as the difference between the percentage of respondents that cited easier credit access and those that said otherwise—stood at +18.4 percent.
This was up from the +17.8 percent recorded in the previous survey.
Respondents are also expecting challenges to emerge in the near term.
In particular, the companies cited faster inflation and higher interest rates on loans, the survey showed.
Citing projections, the companies expect faster inflation as global oil prices rise, the BSP said.
Faster inflation will increase their costs of production.
Enterprises likewise expect interest rates on bank loans to rise as a result of the BSP move to increase its key policy rates, which influence commercial interest rates.