Big companies see freeze hiring in first quarter of 2009
abs-cbnNEWS.com | 11/20/2008 5:29 PM
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New job hirings could take a hit in the first quarter of 2009 as the Philippines' big businesses expect the economy to slow down.
This was one of the results of the Bangko Sentral ng Pilipinas' (BSP) fourth quarter Business Expectations Survey (BES) released Thursday.
The survey asked the country's top corporations for their outlook of the current quarter and the next quarter.
The results have been in the red since early 2008 due to high oil prices and inflation, reflecting the business community's pessimistic outlook.
The BES' Confidence Index was -6.8 percent in the fourth quarter of 2008 and -0.5 percent in the first quarter of 2009.
However, there was an improvement in outlook in the third quarter due mainly to the downtrend in oil prices.
Moreover, businesses were less pessimistic in the last quarter of the year since commerce traditionally picks up during the Christmas season.
"Basically, people are less pessimistic because they expect inflows from overseas Filipinos to pick-up during the holidays and that would fuel demand," said Iluminada Sicat, director of the BSP's Department of Economic Statistics.
Sicat also said the BES pessimistic outlook for 2009 is "consistent with other surveys."
The Makati Business Club and Pulse Asia have come up with similar results based on their own surveys on business and people's outlook.
The BES showed that jobs outlook was negative for the first quarter of 2009, an indication that companies are planning to freeze hiring. The bleak outlook was pulled down by the manufacturing sector.
The survey showed that only 30 percent of companies survey said they would hire in the first quarter of 2009.
Sicat said the BES indicated that businesses have plans to expand in 2009, but not hire new people.
"To us, this means that the expansion would come in the form of capital expenditures. That’s probably because a lot of these businesses are planning to buy machinery and equipment that would improve their efficiency and allow them to compete better," she said.
Sicat said the overall pessimistic outlook reflects weak global demand, which would also weaken domestic demand and affect production.
Other factors that affected the outlook were the depreciation of the peso, new indications of political instability, competition, inflation, interest rates, and tighter access to credit.
Business firms outside Metro Manila were less pessimistic than those located in the national capital.
Companies engaged in food manufacturing, export of food and wood-based furniture were also less pessimistic than other firms.
Exporters which import raw materials fear a double whammy since they would be affected by the slowdown in demand and the depreciation of the peso.
The negative confidence index was last observed in 2005, the year of the Hello Garci scandal and the resignation of the Hyatt-10 or key Cabinet officials and senior agency heads who asked for Arroyo to step down.
