The consumer sentiment in the country was more pessimistic in the fourth quarter of 2022 as the overall confidence index (CI) decreased to -14.6 percent from -12.9 percent in Q3 2022, the Bangko Sentral ng Pilipinas said.
The decline in the index in Q4 2022 indicates that the number of households with pessimistic views increased and continued to outnumber those with optimistic views.
The sentiment across the three component indicators of consumer confidence was mixed in Q4 2022: more pessimistic for the country’s economic condition, less pessimistic for the family’s financial situation, and steady for family income.
Similarly, consumer sentiment was also mixed across income groups: less pessimistic among the low-income group, steady among the middle-income group, and more pessimistic among the high-income group.
The consumer sentiment on buying big-ticket items was more pessimistic in Q4 2022 as the CI declined to -74.5 percent from -72 percent in Q3 2022.
However, in Q4 2022, 24 percent of households availed of a loan in the last 12 months, slightly lower than the 24.9 percent recorded in Q3 2022.
But the percentage of households with savings in the country rose to 30.5 percent from 27.5 percent in Q3 2022 with all income groups registering an increasing trend.
Consumers anticipated that interest and inflation rates may increase, the peso may depreciate against the US dollar, and the unemployment rate may decline in Q4 2022, Q1 2023, and the next 12 months.
In particular, consumers expected the inflation rate may rise to 5.9 percent for the next 12 months, breaching the upper end of the National Government’s inflation target range of 2 to 4 percent for 2022 and 2023.
Business sentiment, meanwhile, turned less optimistic in Q4 2022 as the overall confidence index (CI) declined for the second consecutive quarter to 23.9 percent from 26.1 percent in Q3 2022.
The lower index resulted from the increase in the percentage of pessimists, outweighing the increase in the percentage of optimists.
The respondents’ less optimistic sentiment in Q4 2022 was attributed to: higher inflation, peso depreciation, decline in sales and demand, rising costs of production inputs, and higher interest rates.
The business outlook for the next quarter also turned less upbeat as the overall CI decreased to 31.3 percent from 43.9 percent a quarter ago.
For the next 12 months, business confidence was likewise less optimistic as the overall CI decreased for the third consecutive quarter to 46.2 percent following the previous quarter’s survey result of 57.7 percent.
The CI across all sectors increased in Q4 2022, except for the services sector. The less positive outlook of the services sector outweighed the more optimistic outlook of the construction, industry, and wholesale and retail trade sectors, which in turn translated to a lower overall CI.
Across different types of trading firms, business sentiment was mixed in Q4 2022. Importers and dual-activity firms were less optimistic, while exporters and domestic-oriented firms were more upbeat in the current quarter.
The average capacity utilization of the industry and construction sectors was slightly lower at 72.1 percent in Q4 2022 from 72.7 percent in Q3 2022.
Firms expected that their financial condition and access to credit would be tighter in Q4 2022 as their corresponding indices declined further.
Businesses expected that the peso may continue to depreciate against the US dollar and that the peso borrowing and inflation rates may continue to rise in Q4 2022, Q1 2023 and the next 12 months.
