The number of unenthusiastic consumers across the country still outnumber their optimistic counterparts in the first three months of the year, according to the Bangko Sentral ng Pilipinas (BSP).
In the latest iteration of the BSP’s consumer confidence survey, the overall consumer index or CI stood at minus 10.4 percent in Q1-2023 from minus 14.6 percent in Q4-2022. This indicates that the number of Filipino households taking an optimistic view have increased during the three-month period.
The BSP traced the improved outlook to optimism that more jobs and permanent employment are available, to higher income from salaries or wages and even remittances from abroad, and positive outcomes from the COVID-19 pandemic as the lifting of harsh pandemic-related medical rules on vaccination, masking and other measures that make possible for people to return to work, for instance.
Consumer confidence in the second quarter remained positive in outlook but the confidence index retreated to only 7.5 percent from 9.5 percent a quarter earlier.
“The consumer sentiment for the next 12 months remained optimistic as the CI marginally increased to 22.7 percent from 21.7 percent in Q4 2022,” the BSP said.
Consumer confidence across component indicators and income groups improved in Q1 2023. Consistent with the nationwide consumer outlook, consumer confidence was less pessimistic for Q1 2023 across all three component indicators (i.e., family financial situation, country’s economic condition, and family income), and across all income groups (i.e., low, middle, and high), it said.
Consumers are less hesitant about buying big-ticket items in Q1 2023. The consumer sentiment on buying big-ticket items for Q1 2023 was less pessimistic as the CI turned less negative to -72.8 percent from -74.5 percent in Q4 2022.
The percentage of households with loans decreased, while those with savings increased. About 22.8 percent of households availed of a loan in the last 12 months, which is lower than the 24 percent recorded in the previous quarter’s survey results. The percentage of households with savings rose to 32.9 percent from 30.5 percent in Q4 2022.
Consumers expect higher interest and inflation rates, a weaker peso, and lower unemployment rate for Q1 2023 and the near term. For Q1 and Q2 2023, and the next 12 months, consumers anticipate that the interest rate may increase, the peso may depreciate against the U.S. dollar, and the unemployment rate may decline. Consumers also expect that the inflation rate may rise for the reference periods. In particular, consumers are expecting that the inflation rate may average at 6.2 percent for the next 12 months, which is above the upper end of the National Government’s inflation target range of 2 to 4 percent for 2023-2024.
