CONSUMER OUTLOOK WEAKENS
The confidence index is computed as the percentage of households that answered in the affirmative less the percentage of households that answered in the negative with respect to their views on a given indicator.
Consumer confidence weakened but remained positive for the first quarter of 2018, with the overall confidence index (CI) declining to 1.7 percent from 9.5 percent for the previous quarter.
The less optimistic sentiment was brought about by respondents’ expectations of higher prices of goods, low income, and rise in household expenses. Respondents also cited concerns on increase in household debts, occurrence of typhoon and other calamities, and poor harvest.
The less optimistic consumer sentiment was carried to the near term and the next 12 months due to anticipation of continued increase in prices of goods that, in turn, increase household spending, as well as low earnings of the family. 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.
Consumer outlook is measured across three component indicators--the country’s economic condition, family financial situation, and family income.
For this quarter, consumer confidence waned across the three indicators due to the anticipated increase in prices. 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). Meanwhile, the current quarter CI for family income dropped to 6.6 percent from 10.3 percent.
The CI on the economic condition of the country registered the biggest decline among the three indicators. Consumer sentiment for the near term and the year ahead on all three indicators likewise turned less positive compared to the previous quarter’s survey.
Consumer outlook also weakened across income groups for the current and next quarters and the year ahead. For the current quarter, the low-income group turned more pessimistic while the middleand high-income groups both registered a positive but less upbeat outlook. The primary reason driving the weaker outlook across income groups was their expectation of higher prices of goods. A secondary factor noted by the low- and middle-income groups was low family income/salary. For the next quarter and the year ahead, the same less favorable outlook was reflected across income groups.
More respondents expected that their expenditures on basic goods and services would go up for the second quarter compared to the previous quarter’s survey results. Increased spending was expected on electricity, food, non-alcoholic and alcoholic beverages, fuel, water, and transportation, indicating that inflationary pressures could come from these goods and services.