Consumer confidence improves — BSP

Consumers have a more favorable outlook in the near term due to prospects of jobs, higher income, decreased Covid-virus scare, and good governance, said the central bank.

Based on the latest Consumer Expectations Survey (CES), which was released on Friday, July 1, the Bangko Sentral ng Pilipinas (BSP) said the easing of restrictions and positive developments in the public health crisis situation are fueling consumer optimism, despite high oil, electricity and food prices.

But, the CES noted that consumer sentiment is more positive for the third quarter starting this month until the first “ber” month, September, compared to the second quarter. The overall confidence index (CI) — still in the negative — in the second quarter improved to -5.2 percent from -15.1 percent in the first three months of the year.

For the next 12 months, the outlook is likewise on the optimistic side.

“The higher CI, albeit remaining negative, indicated that the number of households with optimistic views increased, but was still fewer than those with pessimistic views,” according to BSP Senior Director Redentor Paolo Alegre Jr. of the Department of Economic Statistics.

Alegre explained that consumer outlook generally improved across the three component indicators, namely the country’s economic condition, family’s financial situation, and family income.

It also improved across the three income groups included in the survey, which was conducted April 25 until May 5. Of 5,287 households surveyed, these were distributed almost equally between the National Capital Region and in areas outside of the NCR. The survey also showed that 43.9 percent were in the middle-income group, while 30.2 percent and 25.9 percent were in the high-income group and low-income group, respectively.

Alegre said respondents’ improved outlook in the second quarter was anchored on expectations of more jobs and permanent employment, as well as positive developments related to Covid such as the declining number of cases and the consequent easing of travel and social gathering restrictions. And, with more available jobs, consumers expect additional and high income.

For this quarter, consumer sentiment turned more upbeat with a CI of 11.2 percent which was higher from 6.4 percent in the previous quarter. For the next 12 months, the CI also improved to 32.4 percent from 30.4 percent.

The CES indicated that the low-income group were the most optimistic when it comes to good governance as cited reason for their favorable sentiment for the second quarter this year. However, Alegre said the survey was not specific enough to note if this was tied to any administration, whether it is the government of President Rodrigo Duterte or the newly-installed President Ferdinand Marcos Jr.

Consumer spending is less upbeat for the third quarter, according to the CES, with households’ CI on spending outlook on goods and services declining to 38.3 percent from 40.4 percent in the first quarter.

Buying sentiment, however is more buoyant, while buying intentions for big-ticket items over the next 12 months remained steady, said the BSP.

Meanwhile, the percentage of households with savings declined in the second quarter but did not include data for the current quarter.

Still, consumers expect the unemployment rate to decline, interest rates to rise, and the peso to depreciate in the next quarter and for the next 12 months. They also expect the inflation rate to continue to increase to 5.7 percent for the next 12 months.

Households with OFW remittances as source of income is another consumer category in the CES. For the second quarter, 97.5 percent of the 322 OFW household respondents indicated that remittance proceeds were used for food and other household needs, while 58.4 percent and 53.4 percent apportioned their remittances for education and medical expenses, respectively, said the BSP.

The CES also said that about one in every four households availed of a loan in the last 12 months. “For respondents who found it difficult to apply for a loan, some reasons they cited include too many requirements, or difficulty in completing them, lack of collateral, and income is too low to support loan application,” said the BSP.

Credit belongs to :

Check Also

Turning empty offices into housing is a popular idea. Experts say it’s easier said than done

With office vacancy rates at high levels in several Canadian cities and a shortage of …