Consumer confidence remained pessimistic under latest survey conducted by the Bangko Sentral ng Pilipinas (BSP) in the second quarter (2Q) this year, with the index steady at 10.5 percent from 10.4 percent a quarter (1Q) earlier.
The sustained negative sentiment among consumers was traced to accelerated inflation, higher household expenses, lower income, fewer available jobs and the effectiveness of government policies and programs on inflation management, economic resilience, high-quality and well-paid job creation and financial assistance to low-income households.
Consumers were also less confident when looking at the next quarter and the next 12 months as the confidence index for the periods fell to 4.6 and 20.5 percent (from 7.5 percent and 22.7 percent), respectively.
The BSP regularly surveys consumer mood as it helps the policy-making monetary board craft the policy response needed to keep prices stable as mandated by its charter and optimize local output growth.
According to the BSP, consumers remained pessimistic across the three component consumer confidence indicators on the country’s economic condition, family financial situation, and family income while consumer sentiment was mixed across income groups (i.e., more pessimistic among the low-income group, steady among the middle-income group, but turned optimistic among the high-income group) for 2Q 2023.
Consumer sentiment on the purchase of big-ticket items in 2Q 2023 proved less pessimistic as the index improved to negative 67.7 percent from negative 72.8 percent a quarter earlier.
It noted the percentage of households with loans increases, while those with savings decreases.
“In 2Q 2023, 24.8 percent of households availed of a loan in the last 12 months, higher than the 22.8 percent recorded in 1Q 2023. Meanwhile, the percentage of households with savings decreased to 30.2 percent from 32.9 percent in 1Q 2023.
“Consumers expect higher interest and inflation rates, a weaker peso, and lower unemployment rate for 2Q 2023 and the near term. Consumers anticipate that the interest rates may increase, the peso may depreciate against the U.S. dollar, and the unemployment rate may decline for 2Q and 3Q 2023 and the next 12 months.
“Households also expect that the inflation rate may rise in all reference periods but at a slower pace. Specifically, consumers are expecting that the inflation rate may average at 5.2 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,” the BSP said.
However, the confidence index among businessmen for the period proved bullish as the index moved higher in the industry, services and wholesale and retail trade sector. Only the index for the construction sector moved in the opposite direction.
“The respondent firms’ optimism stemmed from their expectations of: (a) increase in sales and production due to stronger demand for goods and services across all sectors, (b) continued post-pandemic recovery, (c) fully reopened economy, (d) easing inflation, and (e) seasonal uptick in demand for certain goods and services during the hot dry season.
“However, the business sentiment for Q3 2023 and the next 12 months was less buoyant as the overall CIs declined from the previous quarter’s survey results,” the BSP said.
