LOCAL businesses are looking to hire less people in the second quarter of the year, as companies cite heightened worries on competition and demand during the period.
In the Bangko Sentral ng Pilipinas’s (BSP) quarterly gauge of local corporate sentiment, firms across the country reported decreased business confidence for April to June this year.
More than half of the 1,466 top companies surveyed by the Central Bank cited competition as their main business complaint during the period.
Low and “insufficient” demand was also one of the top concerns of businessmen in the country with at least a quarter of the surveyed firms citing this as a major concern for operations.
The BSP said firms are worried that combination of high competition and insufficient demand will translate to low sales volume for firms in the second quarter of the year.
These rising jitters among local companies are about to spill over to the real economy, as businesses expressed decreased interest in expanding their businesses and hiring more people.
In particular, the percentage of businesses with expansion plans in for the next quarter edged lower to 34.2 percent, from 35.1 percent in the previous quarter.
The BSP also said that although the employment outlook index for the next quarter remained positive across sectors, it was lower at 24.9 percent compared to a quarter ago’s 29.9 percent.
This indicates that while firms will continue to hire new employees, the number of new hires could be lower compared to the overall volume of new hires in the first three months of the year.
Data from the Philippine Statistics Authority showed the unemployment rate hitting 5.3 percent in January this year, improving from the 6.6 percent seen in the same month last year. Among the other concerns of businesses for the quarter include higher interest rates, unclear economic laws, access to credit and labor problems.