MANILA -- Philippine businessmen are maintaining a positive employment outlook despite a weaker sentiment in the third quarter of the year.
Results of the Bangko Sentral ng Pilipinas’ (BSP) third-quarter Business Expectations Survey (BES), conducted from July 10 to September 10, showed that respondents’ employment outlook remain on positive territory at 19.6 percent, although this is lower than the 26 percent recorded in the previous quarter’s survey.
“This suggests that more firms will continue to hire new employees, although the number that said so (is) lower compared to the Q2 2019 survey result,” the central bank said in its report.
In a briefing on Thursday, BSP Department of Economics Statistics Director Redentor Paolo Alegre Jr. said respondents also expected inflation rate and interest rate to decline this quarter but the peso-dollar rate was seen to increase.
In the first eight months this year, rates of price increases averaged at 3 percent, the mid-point of the government’s 2 percent to 4 percent target band.
Last August alone, inflation decelerated to 1.7 percent from the previous month’s 2.4 percent.
Except for an uptick to 3.2 percent last May from the previous month’s 3 percent, domestic inflation rate has been posting slower rates since peaking at 6.7 percent in September and October last year.
The Philippine peso also continued to prove its resiliency, trading between the 51- and 52-level against the US dollar.
Domestic interest rate has also been on the downtrend after a total of 50 basis points cut in the central bank rates due to a deceleration of inflation and still robust domestic growth.
Businesses’ positive outlook on employment has been registered despite the weaker business sentiment, with the confidence index down to 37.3 percent from 40.5 percent in the previous quarter’s survey.
Alegre said the respondents, whose entities are part of the Security and Exchange’s (SEC) Top 7,000 corporations in 2010, attributed the weaker sentiment to the seasonal slack in demand economic activities because of the rainy season, lower sales because of drop in orders, lack of supply of raw materials, perceived negative effects of recent government policies, such as the rice tariffication, and stiffer competition.
He said this quarter’s business sentiment in the country was similar to those of Bulgaria, Croatia, Germany, India, and Norway.
However, he cited that the outlook for the next quarter improved to 56.1 percent from 47.6 percent in the second quarter BES.
During the same briefing, BSP Assistant Governor for Monetary Policy Sub-Sector Iluminada Sicat said correlation of BES’ results to gross domestic product (GDP) was about 67 percent.
She noted that while the latest BES results showed weaker outlook, “the view remain(s) to be positive.”
“If you look at the result of the confidence index for Quarter 4, they remain to be very upbeat about the outlook on Quarter 4,” she said.
Sicat also pointed out that third-quarter BES results normally post lower figures compared to the second quarter.
“So the result of the survey today, which shows lesser optimists compared to pessimists, is merely an indication of the sentiment during the third quarter of the year. It’s more of seasonality,” she added.
Meanwhile, the results of the third quarter 2019 Consumer Expectations Survey (CES), conducted on July 1-13, showed an improved level of 4.6 percent from -1.3 percent in the previous quarter.
The respondents cited improvement in the peace and order situation, availability of more jobs, additional and high income, and good governance. (PNA)
