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Wednesday, September 06, 2006
Business expects good things in last qtr. of ’06
More employment opportunities in the country will open in the fourth quarter of the year, as more companies expressed a positive business outlook for the period.
The Bangko Sentral ng Pilipinas said third quarter results of the quarterly business expectation survey (BES) showed that the employment outlook index of respondent-firms increased to 13.8 percent from the previous survey’s 12.6 percent.
This positive outlook is supported by the growing number of industrial firms that have expansion plans for the fourth quarter.
The BSP third quarter BES said more firms in the industry sector believe that business activities will be robust in the said period due to the holiday and harvest seasons, higher remittances by overseas Filipino workers, an increase in infrastructure projects, a boom in mining and better government performance.
However, the respondents identified major constraints, which could hamper business expansion. These include insufficient market demand, stiff foreign and domestic competition, unclear economic laws particularly on taxation, liquidity problem and high interest rate.
Top firms
The BES polled firms in the Securities and Exchange Commission’s top 5,000 corporations in 2004 located all over the country.
From each of the region, a stratified random sample of 1,071 firms were selected across four major economic groups and 12 sub-groups. These are: industry, which groups manufacturing, mining and quarrying, electricity, gas and water; agriculture, fishery and forestry; construction; wholesale and retail trade; and services sector, which consists of financial intermediation, real estate, renting and business activities, hotels and restaurants, transport, storage and communications and community, social and personal services.
Some 34.2 percent of the respondents belong to the small-firm category, employing less than 100 workers.
More of the respondent-firms showed business optimism in the third quarter of the year, as manifested in the positive confidence index or diffusion index (DI) of 21.7 percent.
DI measures the net difference between firms saying business conditions are favorable and those saying business is unfavorable.
Oil prices
Those who said business is unfavorable attributed their lower optimism to the continuing increase in oil prices arising from conflicts in the Middle East, higher labor costs due to the implementation of wage increases in both public and private sectors and seasonal factors such as the rainy season and typhoons.
Business confidence based on specified criteria remained positive across sectors in the third quarter but was lower compared to the previous quarter except for the services sector.
Firms from the services sector were bullish that business turnout would further strengthen while the other sectors—trade, industry and construction—anticipated a slowdown in business activities. (JBN)
For Bisaya stories from Cebu. Click here. (September 6, 2006 issue)
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