Companies plan to hire more workers in the second quarter, amid the increase in demand during the dry season, a survey of the Bangko Sentral ng Pilipinas showed over the weekend.
The latest Business Expectations Survey showed that the employment index for the second quarter increased to 29.9 percent from 24.7 percent in the last quarter’s survey.
“This indicates that the number of firms with hiring intentions increased relative to a quarter ago,” it said.
The percentage of businesses with expansion plans in the industry sector increased to 35.1 percent in the second quarter from 31.1 percent in the previous quarter.
It said the overall business sentiment improved in the second quarter, with the confidence index climbing to 47.8 percent from 39.7 percent in the last quarter’s survey, suggesting that economic growth could accelerate for the next quarter.
The reasons cited by respondents behind their more optimistic outlook were the usual increase in demand during the dry season, enrollment and harvest periods and the anticipated higher level of household disposable income as the Tax Reform for Acceleration and Inclusion law took into effect.
Respondents also expect an increase in government infrastructure spending with the ‘Build, Build, Build’ program, higher tax revenues due to the Train law, expansion of businesses, new projects and investment opportunities, continued product development, new product lines and enhanced market strategies.
The survey, however, showed that the outlook of businesses on the economy turned less optimistic in the first quarter 2018 compared to a quarter ago, due to the usual slowdown in business activity after the holiday season and in part to the impact of the implementation of the Train law.
The overall business confidence index declined to 39.5 percent from 43.3 percent in the last quarter of 2017.
The less upbeat quarter-on-quarter outlook was due primarily to the lesser business activity and moderation of consumer demand after the holiday season and harvest seasons, the Bangko Sentral said.
Other reasons cited were the rising fuel prices that were largely influenced by higher international prices of crude oil and the increase in excise tax on petroleum products, and stiffer business competition.
Another concern cited by respondents was the transitory impact on consumer prices with the implementation of the Train law. Train was signed into law by President Rodrigo Duterte in December 2017 and took effect in January this year.
The law reduced personal income taxes but raised excise taxes on petroleum products, automobile, alcohol, tobacco and sugar-sweetened beverages.
The survey was conducted on Jan. 8 to Feb. 22, 2018, involving 1,469 firms nationwide.