Just weeks prior to the enforcement of the enhanced community quarantine over Luzon, the business sector maintained a positive outlook for the second quarter, latest data from the Bangko Sentral ng Pilipinas’ Business Expectations Survey show.
“The employment outlook index was steady for the second quarter 2020 at 16.9 percent from 16.6 percent…This suggests that more firms indicated to continue hiring new employees in the second quarter,” the survey showed.
“Further, increased hiring intentions in the industry and construction sectors counterbalanced the moderation of employment prospects in the wholesale and retail trade and services sectors.”
However, the BSP reported a slightly lower 12-month outlook on hiring to 37.2 percent, down from 38.1 percent, owing to the slowdown in hiring employees in wholesale, services and retail trade sectors.
Likewise, businesses planning expansion was higher in the second quarter.
“Relative to quarter-ago survey results, the percentage of businesses with expansion plans in the industry sector for the second quarter 2020 was higher at 30.2 percent (from 29.2 percent), but lower for the next 12 months at 37.2 percent (from 38.1 percent),” the central bank said.
The survey found businesses expect financial conditions to remain tight as sentiments further slipped into negative territory, from minus 5.4 percent to minus 12.2 percent in the first quarter of 2020.
“This means that firms that expect tight financial conditions increased and continued to outnumber those that said otherwise during the quarter,” it said. “However, firms were of the view that their financing requirements could be met through available credit as more respondents reported ease of access to credit than those that said otherwise.”
Previously, the BSP survey showed softer economic sentiment from businesses in the first quarter this year as the overall confidence index slipped from 40.2 percent a quarter ago to only 22.3 percent.