FEWER LOCAL companies expect to expand their operations even if they plan to hire more workers, according to a study by the Philippine central bank.
Companies that plan to expand in the next 12 months fell to 25.6% from 26.8%, the Bangko Sentral ng Pilipinas (BSP) said in its Business Expectations Survey for this quarter.
Businesses expect the peso to weaken further in the first half, before strengthening again starting July until March next year.
Companies also expect borrowing rates to increase and inflation to breach the central bank’s 2-4% target. The survey found that more companies expected credit to remain tight this quarter.
Meanwhile, the employment outlook index for the second quarter rose to 24.7% from 24.5%, but declined to 28.9% (from 32.4%) for the next 12 months.
“The slightly higher positive reading for the second quarter of 2022 suggests that firms are looking forward to hiring more people in the next quarter, while the lower index for the next 12 months implies that firms are still looking to hire, but at a lesser degree, in the next several months,” the BSP said.
The study found that companies were less optimistic for the first quarter as reflected by the overall confidence index, which declined to 32.9% from 39.7% amid a surge in coronavirus infections spurred by the Omicron variant, higher raw material prices, the weaker peso and Typhoon Odette.
The central bank covered 1,498 companies for the survey, which was conducted on Jan. 21 to Mar. 4. — Luz Wendy T. Noble