DECLINE IN CONFIDENCE

The Bangko Sentral ng Pilipinas’ quarterly survey on consumer confidence shows consumers are worried about high prices

Consumer sentiment weakened but remained positive for the third quarter, with the overall confidence index (CI) decreasing to 10.2 percent from 13.1 percent for the second quarter.

Despite the decline in the CI, consumer confidence remained high, registering the second highest reading since the start of the nationwide survey in the first quarter of 2007.

According to respondents, their less favorable outlook for the current quarter was due to the anticipated higher prices of commodities, which could lead to higher household expenditures; peace and order problems (particularly, crisis in Marawi City); low or no increase in income; and expected increase in the number of unemployed persons. Respondents also cited other concerns on occurrence of calamities during the third quarter and poor health.

For the next quarter, consumer sentiment turned more upbeat as the CI increased to 17.8 percent from 13.6 percent in the previous quarter’s survey.

Respondents’ more optimistic outlook for the next quarter stemmed from expectations of additional income and salary increase, improvement in peace and order, and availability of more jobs. Meanwhile, consumer outlook for the year ahead remained broadly steady as the CI showed a marginal decline to 33.7 percent from 34.3 percent for the second quarter of 2017.

Consistent with the less optimistic overall sentiment of consumers, consumer outlook across income groups likewise weakened for the current quarter.

In particular, the low-income group turned pessimistic for the current quarter as the CI reverted to negative territory, with respondents anticipating no increase in salary for the period.

The middle-income group’s less upbeat sentiment was due largely to expectations of higher household expenditures. Respondents from the high-income group, while remaining to be the most optimistic, also cited higher prices of goods and peace and order problem as reasons for their less optimistic outlook. /