Firms not too keen on hiring in Q2

IRMS are not too keen on hiring new employees in the second quarter of this year as they consider sluggish demand and rising interest rates as major risks to their operations.

The latest Business Expectations Survey of the Bangko Sentral ng Pilipinas show that the employment outlook index declined to 13.4 percent for the second quarter of 2023 from 21.2 percent in the fourth-quarter 2022 survey results.

“The lower reading in Q1 (first quarter) 2023 suggests that hiring intentions may turn less favorable for the next quarter,” BSP said.

But employment prospects for the next 12 months are expected to improve as the employment outlook index increased to 36.4 percent from 29 percent in the previous quarter’s survey results.

Likewise, the percentage of businesses in the industry sector with expansion plans for the second quarter declined marginally to 19.1 percent from 19.5 percent in the fourth-quarter 2022 survey results.

“In particular, the increase in the percentage of firms with expansion plans belonging to the mining and quarrying subsector was counterbalanced by the decline in the percentage of firms with expansion plans in the manufacturing, electricity, gas and water, and agriculture, fishery and forestry subsectors,” the BSP said.

Meanwhile, the percentage of industry firms with expansion plans for the next 12 months rose to 26 percent from 22.9 percent, driven by the increase in the percentage of firms with expansion plans from the mining and quarrying, manufacturing and the agriculture, fishery and forestry subsectors.

Last month, the Philippine Statistics Authority reported that the unemployment rate increased to a four-month high of 4.8 percent in January 2023 from 4.3 percent a month ago, due mainly to slower economic activities usually observed after the Christmas season.

But Dennis Mapa, national statistician and civil registrar general, said the January rate was significantly slower compared to the 6.4 percent unemployment rate posted in January 2022.

The construction sector posted the biggest decline in employment, followed by aquaculture, agriculture, and mining and quarrying.

In 2019, the unemployment rate stood at 5.1 percent and significantly increased to 10.3 percent in 2020 during the onslaught of the pandemic.

But in July 2022, the unemployment rate stood at 5.2 percent, 5.3 percent in August 2022, 5 percent in September 2022, 4.5 percent in October 2022, 4.2 percent in November 2022 and 4.3 percent in December 2022.