Consumers turn more optimistic in Q2

Filipino consumers turned more optimistic in the second quarter as the confidence index showed improvement, reversing three consecutive quarters of decline on the back of expected higher income as well as family savings and improving peace and order situation, according to a survey conducted by the Bangko Sentral ng Pilipinas (BSP).

Redentor Paolo Alegre, head of the BSP’s Department of Economic Statistics, said the consumer confidence index improved to 3.8 percent in the second quarter from 1.7 percent in the first quarter based on the 2nd Quarter Consumer Expectation Survey (CES).

The consumer confidence index has declined steadily to 10.2 percent in the third quarter of last year, 9.5 percent in the fourth quarter, and 1.7 percent in the first quarter of the year from a record level of 13.1 percent in the second quarter of last year.

The latest survey, conducted from April 2 to 14, covered 5,517 respondents.

“According to respondents, their optimism stemmed from their expectations of improving peace and order situation, higher income, availability of more jobs, implementation of effective policies by the government, and higher family savings,” Alegre said.

He said the consumer confidence turned positive on the country’s economic condition to 5.7 percent from -0.1 percent and family financial situation to 0.2 percent from -1.3 percent.

The country’s gross domestic product (GDP) accelerated to 6.8 percent in the first quarter from the revised 6.5 percent in the fourth quarter.

On the other hand, Alegre said consumer confidence on family income dipped to 5.5 percent from 6.6 percent.

Ironically, consumers now expect a lower inflation rate this year at 4.2 percent in the second quarter from 4.8 percent in the first quarter, while those who expect interest rates will increase, declined to 22.5 percent from 23.7 percent.

Inflation averaged 4.1 percent in the first five months after climbing to a fresh five-year high of 4.6 percent in May from 4.5 percent in April, breaching the central bank’s two to four percent target.

For the third quarter, Alegre said consumer outlook was broadly steady at 8.7 percent in the second quarter from 8.8 percent in the first quarter.

“Spending on basic goods and services for the next quarter was broadly steady. Meanwhile, the outlook on buying conditions for big-ticket items was less favorable and buying intentions for big-ticket items were broadly steady,” he said.

BSP Deputy Governor Diwa Guinigundo said the consumer confidence index turned positive since the third quarter of 2016 when President Duterte assumed office. “Everything is going well,” he said.