Filipino consumers turn pessimistic

BSP survey

Filipino consumers are less upbeat for the third quarter with rising food and oil prices when there are no sources of additional income.

The Bangko Sentral ng Pilipinas’ (BSP) Consumer Expectations Survey (CES) showed a negative outlook for the third quarter mainly because of these reasons: an increase in commodity prices; low salary/income; and higher household expenses.

The CES also showed that the high unemployment rate and no increase in income are dampening consumers' outlook. “Respondents also noted concerns on higher educational expenses and higher transportation expenses as reasons behind their gloomy prospects,” the report said.

The overall confidence index (CI) reverted to a negative score of -7.1 percent for the first time in eight straight quarters from a favorable 3.8 percent in the previous quarter. The negative index means that there were more pessimist consumers than optimists for the third quarter reading. The overall consumer Cl measures the average direction of change in three indicators which is the overall condition of the economy, household finances, and household income, said the BSP.

For the fourth quarter, the BSP said consumer sentiments are also “less positive” with CI dropping to 3.8 percent from 8.7 percent in the second quarter.

For the year ahead, the CI was also lower at 13 percent from 23.1 percent previously as consumers cited expectations of high prices of goods, low salary or income, and rise in expenditures as reasons for their less upbeat outlook for the near term and the year ahead.

The BSP said consumer outlook based on economic condition and family financial situation, and family income declined quarter-on-quarter.

“Notably, the CIs for the country's economic condition and family financial situation reverted to negative territory for the current quarter while family income remained positive but lower from a quarter ago. For the next quarter, outlook on economic condition of the country was pessimistic, broadly steady and positive on family financial situation, and more optimistic on family income,” said the BSP. “For the next 12 months, consumer confidence on the three component indicators was less upbeat.”

Across income groups, the outlook has also weakened for all survey subject periods.

For the third quarter, the BSP said the low- and middle-income groups is more pessimistic as they expect higher household expenditures and no increase in income.

The high-income group was “less buoyant as they anticipated peace and order problems and peso depreciation,” the report said.

It is the same for the next quarter. "The sentiment of consumers turned negative for the low-income group, but became less positive for the middle- and high- income groups. For the year ahead, consumer outlook was less upbeat across all income groups,” said the BSP.

The latest CES was conducted July 1 to 14 and included 5,580 households, of which 2,764 or 49.5 percent were from the National Capital Region and 2,816 or 50.5 percent from areas outside of the NCR.