MANILA, Philippines — Companies are expanding and hiring more workers in anticipation of brisk economic activity in the fourth quarter due to the Christmas season, despite concerns about rising inflation and interest rates, as well as the weak peso.
Redentor Paolo Alegre, head of the Department of Economic Statistics (DES) at the Bangko Sentral ng Pilipinas (BSP), said the result of the Business Expectation Survey for the third quarter showed that the percentage of businesses with expansion plans in the industry sector for the fourth quarter rose to 36.1 percent from 34.2 percent a quarter ago.
Alegre said the average capacity utilization in the industry and construction sectors for the third quarter increased to 75.1 percent from 74.8 percent in the second quarter.
Likewise, he added the survey showed the employment outlook index for the fourth quarter improved to 26.3 percent from 24.9 percent in the last quarter’s survey.
“The positive reading indicates that more firms will continue to hire new employees than those that said otherwise,” Alegre said.
According to Alegre, the outlook of firms on their hiring intentions was more optimistic in the services and wholesale and retail trade sectors, steady in industry, but less upbeat in construction.
For the fourth quarter, Alegre said businesses turned more upbeat as the confidence index rose to 42.6 percent from 40.4 percent in the previous quarter’s survey results.
“This suggests growth may be sustained in the last quarter of 2018,” he said.
Respondents’ more positive outlook for the fourth quarter, Alegre said, was due to expectations of an uptick in consumer demand during the holiday and harvest seasons, continued increase in orders and projects, and expansion of businesses and new product lines.
Alegre said respondents also cited the continued rollout of government infrastructure and other development projects under the Build Build Build program, more favorable weather conditions for agricultural products, as well as the opening of high seas or fishing operations in October.
“Positive outlook was likewise driven by respondents’ expectations of more favorable macroeconomic conditions in the country for the next quarter particularly robust gross domestic product growth, sustained foreign investment inflows and the steady stream of overseas Filipinos’ remittances,” he said.