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Companies plan to hire more workers in second quarter

More companies plan to hire new employees in the second quarter, reflecting the positive outlook of businesses on the economy, results of a survey conducted by Bangko Sentral ng Pilipinas showed.

The first-quarter business expectations survey showed that the employment outlook index rose to 27.2 percent in the second quarter from 19.5 percent in the first quarter.

“This indicates expectations of an overall increase in the number of new employees to be hired for the second quarter of the year,” Bangko Sentral said.

“Likewise, in line with the bullish outlook on business activity for the next quarter of the construction and services sectors, their employment indices reached record-highs of 48.2 percent  since the third quarter of 2014, and 39 percent since the fourth quarter of 2014, respectively,” it said.

The percentage of businesses with expansion plans in the industry sector remained broadly steady at 31.3 percent in the second quarter. 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 economy is expected to remain robust this year, with the government expecting a 6.8-percent to 7.8-percent GDP growth for the full year, anchored mainly on the government’s accelerating fiscal spending and strong domestic demand.

The gross domestic product grew 5.8 percent in 2015, lower than 6.1 percent in 2014, and below the government’s target of 7 percent to 8 percent.

The same survey showed that businesses were expecting tight financial conditions this year but easy access to credit. The financial conditions index increased slightly, but remained in the negative territory at -0.1 percent in the first quarter, from -0.7 percent in the previous quarter.

“This means that firms continued to be pessimistic regarding their financial conditions for the current quarter, although the number of pessimists declined,” Bangko Sentral said. 

It said companies believed that their financing requirements could be met through available credit as respondents who reported easy access to credit exceeded those who said otherwise.

More respondents continued to expect inflation to rise, but businesses expected the rate of increase in commodity prices to remain low at 1.9 percent in the first quarter and 2.1 percent for the second quarter.

The government set an inflation target range of 2 percent to 4 percent this year. Last year, inflation averaged 1.4 percent.

The survey was conducted on Jan. 5 to Feb. 17, 2016, involving 1,539 firms nationwide. These included 588 companies in the National Capital Region and 951 firms outside NCR. 

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