MANILA, Philippines — Fewer companies are expected to expand and hire more workers in the first quarter of 2020 amid lower capacity utilization as well as slower demand after the Christmas holidays, according to the Bangko Sentral ng Pilipinas (BSP).
Fernando Salvoza, officer-in-charge of the BSP’s Department of Economic Research, said the results of the fourth quarter Business Expectations Survey (BES) showed the percentage of businesses with expansion plans in the industry sector for the first quarter of 2020 was lower at 29.2 percent from 30.4 percent in the previous quarter.
“Weaker expansion plans for the next quarter were recorded across the industry sub-sectors, except for the mining and quarrying sub-sector whose expansion plans were stronger,” Salvoza said.
However, Salvoza said the percentage of businesses with expansion plans in the next 12 months was higher at 38.1 percent from the previous quarter’s 37.9 percent.
For the next 12 months, Salvoza said higher expansion plans were recorded for the mining and quarrying and manufacturing sub-sectors, but lower for the utilities and agriculture, fishery and forestry sub-sectors.
According to the survey, the average capacity utilization in the industry and construction sectors for the fourth quarter was lower at 75.1 percent compared to the previous quarter’s 76.1 percent.
Salvoza said outlook on the volume of business activity was less upbeat across sectors, except for the construction sector, which was more upbeat.
“Construction firms turned more optimistic as they anticipated new projects,” Salvoza added.
He pointed out the outlook of firms in the industry, wholesale and retail trade and services sectors turned less buoyant amid expectations of lower demand after the holiday season.
Likewise, Salvoza said fewer companies intend to hire additional workers in the next quarter as well as the next 12 months.
The employment outlook index for the next quarter and the next 12 months remained positive although lower at 16.6 percent and 34.5 percent, respectively, compared to the last quarter’s survey results at 19.6 percent and 35.8 percent, respectively.
“This suggests that more firms will continue to hire new employees, although the number that said so are lower compared to the previous quarter’s survey. The decline in the employment outlook index for both periods stemmed from the moderation of employment prospects in the industry and wholesale and retail trade sectors,” Salvoza said.