Pinoys pessimistic over high prices, low income – poll

For the first time in more than two years, Filipinos turned pessimistic in the third quarter amid rising commodity prices and expenses, a high unemployment rate and no increase in income, a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

Redentor Paolo Alegre, head of the Department of Economic Statistics, said the overall confidence index of the Consumer Expectation Survey slipped to negative territory at -7.1 percent in the third quarter from 3.8 percent in the second quarter.

This ended the streak of positive consumer confidence index at eight quarters. The last time the confidence index was in negative territory at -6.4 percent was in the second quarter of 2016.

Alegre added that the Philippines mirrored the weak- ened confidence of consumers in Australia, Indonesia, Japan, South Korea, Switzerland, Taiwan and the United Kingdom.

Respondents, according to him, traced their negative sentiment in the third quarter to the increase in commodity prices, low salary or income, higher household expenses, high unemployment rate and no increase in income.

Alegre added that consumers also cited higher educational expenses and higher transportation expenses as the reasons behind their gloomy prospects.

The latest survey was conducted from July 1 to 14 covering 5,580 respondents.

Alegre said consumer confidence on the country’s economic condition and family situation reverted to negative territory at -17.7 percent in the third quarter from 6.2 percent in the second quarter as well as -6.6 percent from -1.2 percent, respectively.

The country’s gross domestic product growth eased to a three-year low of six percent in the second quarter from the revised 6.6 percent in the first quarter, bringing the average to 6.3 percent in the first half of the year.

Alegre said Filipino consumers also turned less optimistic in the next quarter and the year ahead, with the confidence index slipping to 3.8 percent from 8.7 percent and to 13 percent from 23.1 percent, respectively.

Alegre added that consumers expect inflation, interest rates and prices of basic goods and services to rise further in the next 12 months.

The BSP’s Monetary Board has lifted rates by 100 basis points so far this year to curb inflationary pressures arising from higher global oil prices and the implementation of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law.

The BSP also raised its inflation forecasts to 4.9 instead of 4.5 percent for this year and to 3.7 instead of 3.3 percent for next year.

Alegre said the respondents also expect the peso to further weaken over the next 12 months. The local currency almost breached P54 to $1, hitting an intraday low of P53.975 before closing at P53.73. It is the third worst performing currency, shedding over six percent to hit P53.8 to $1 Thursday, its weakest in almost 13 years.