BSP survey finds consumer outlook weakening in Q1

The central bank said consumer confidence is weaker in the first quarter as Filipinos expressed concern on rising household expenses when they expect no positive adjustment to their income sources.

Based on its first quarter Consumer Expectations Survey (CES), Bangko Sentral ng Pilipinas (BSP) Assistant Governor Francisco G. Dakila Jr., who presented the latest results yesterday, said the weaker consumer sentiment is due to consumers’ expectations of high prices of goods, low income and rise in household expenses. These sentiments were noted by all income groups in the survey. The less optimistic consumer sentiment in the first quarter 2018 is also extended to the near term and in the next 12 months. This is because of consumers’ “anticipation of continued increase in prices of goods that, in turn, increase household spending, as well as low earnings of the family.”

Survey participants – or about 478 households – also worried on the anticipated increase in household debts, typhoon and other calamities, and poor harvest season, on top of a generally wary outlook on rising inflation and interest rates, and an exchange rate seen to depreciate further this year.

For the first quarter, consumers’ overall confidence index (CI) declined to 1.7 percent compared to 9.5 percent in the last quarter of 2017. The CI for the next quarter and the year ahead, although remaining positive, declined to 8.8 percent from 17.5 percent a quarter ago and 24 percent from 32 percent a quarter ago, respectively, said the BSP. The central bank’s CES assess and review consumer outlook based on the country’s economic condition, family financial situation, and family income.

In the first quarter results, Dakila said consumer confidence was mostly affected by the expectation that expenses will increase in the next quarters. “Notably, the CIs for the country’s economic condition and family financial situation reverted to negative territory for the current quarter (at -0.1 percent from 10.9 percent and -1.3 percent from 7.3 percent, respectively).”