July 18, 2018, 6:23 pm
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Consumers remain optimistic

Consumer outlook was broadly steady for the fourth quarter of 2017, with the overall confidence index (CI) decreasing slightly to 9.5 percent from 10.2 percent for the previous quarter. 

Bangko Sentral ng Pilipinas said this means that the optimists continued to outnumber the pessimists but the margin for the current quarter was slightly lower relative to a quarter ago. 

The CI is computed as the percentage of households that answered in the affirmative less the percentage of households that answered in the negative with respect to their views on a given indicator.

Respondents indicated that their continued positive sentiment during the current quarter was on account of additional family income and higher salary, and availability of more jobs leading to an increase in the number of employed family members. 

However, their slightly less favorable outlook, which counterbalanced their positive views, was due to concerns on: higher prices of goods and household expenditures, peace and order problems, occurrence of calamities such as typhoon, and poor health and high medical expenses.

For the next quarter, consumers’ optimism likewise remained steady, as the CI showed a fractional decline to 17.5 percent from 17.8 percent in the previous quarter’s survey. 

Meanwhile, consumer outlook for the year ahead was less upbeat as the CI declined slightly to 32 percent from 33.7 percent a quarter ago.

Consumer confidence is measured across three component indicators, namely, the country’s economic condition, family financial situation, and family income. 

For the fourth quarter, consumer sentiment on the three indicators was mixed, as optimism was lower on the country’s economic condition, steady on the family’s financial situation and higher on family income. 

Notably, a record-high CI was posted on the outlook on family income at 10.3 percent from 9 percent in the previous quarter. 

For the next quarter, consumers’ views on family finances and income turned more buoyant but that on the country’s economic condition weakened. 

The same broad trends were observed for the year ahead.

Consumer outlook was also mixed across income groups for the current and next quarters and the year ahead. 

For the current quarter, the low-income group turned less pessimistic due to the availability of more jobs and good harvest. 

Meanwhile, the middle- and high-income groups both registered a positive but weaker outlook as they anticipated lower salary and higher household expenditures. 

For the next quarter and the year ahead, the sentiment of consumers was less favorable for the low-income group, steady for middle-income and was more upbeat for high-income.

The spending outlook index of households on basic goods and services increased to 34.9 percent for Q1 2018 from 28.1 percent in the previous quarter. 

This means that respondents who expected to spend more on goods and services outnumbered those who said otherwise, and the number that said so increased compared to a quarter ago. 

The more upbeat outlook on consumer spending was observed across all commodity groups and geographical areas in both NCR and AONCR.

The percentage of households that considered the current quarter as a favorable time to buy big-ticket items increased to 31.9 percent from 30.2 percent for the previous quarter. 

The more favorable outlook on buying conditions was evident across all big-ticket items. 

For the year ahead, buying intentions of respondents across all big-ticket items likewise improved to 12.7 percent compared to 11.2 percent from the previous quarter’s survey results.

The percentage of households with savings decreased to 35.6 percent from 36.8 percent in the previous quarter. 

The decline in the percentage was observed in both NCR and AONCR. According to respondents, they save money for the following reasons: emergencies, education, health and hospitalization, retirement, business capital and investment, and purchase of real estate. 

Almost two-thirds or 65.4 percent of household savers had bank deposit accounts while 45.6 percent kept their savings at home and 38.8 percent put their money in cooperatives, paluwagan, other credit/loan associations,  and as investment.

Meanwhile, the percentage of respondents who reported that they could set aside money for savings during the current quarter edged up to 43.6 percent from 43 percent for Q3 2017. 

However, the proportion of those that could set aside 10 percent or more of their monthly gross family income was lower at 37.1 percent from 40.3 percent for Q3 2017.

The survey results showed that consumers anticipated inflation to increase but to remain within target, interest and unemployment rates to go up and peso to depreciate in the next 12 months. 

The number of respondents with views of higher inflation increased compared to that a quarter ago, reflecting stronger inflationary expectations over the next 12 months. 

Moreover, respondents anticipated the rate of increase in commodity prices to stay within the government’s 2 to 4 percent inflation target range for 2017, at 3.6 percent over the course of the next 12 months, higher than the expected 3.2 percent in the Q3 2017 survey. 

Meanwhile, more respondents expected interest and unemployment rates to rise and the peso to depreciate against the US dollar over the next 12 months compared to a quarter ago.

The Q4 2017 CES was conducted during the period 2 – 14 October 2017. The CES samples were drawn from the Philippine Statistics Authority (PSA) Master Sample List of Households, which is considered a representative sample of households nationwide. 

The CES sample households were generated using a stratified multi-stage probability sampling scheme. It has a sample size of 5,581 households, of which 2,722 (48.8 percent) were from NCR and 2,859 (51.2 percent) from AONCR.
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