Consumers more optimistic in Q2

BSP survey

Filipino consumers were more optimistic in terms of their buying and general finances in the second quarter of this year because of higher sources of income – despite the TRAIN impact on prices – and more importantly from increased savings, based on a Bangko Sentral ng Pilipinas (BSP) survey.

The BSP’s Consumer Expectations Survey (CES) for the second quarter this year showed an overall confidence index (Cl) of 3.8 percent, more than the first quarter’s 1.7 percent. The higher Cl meant there were more optimists than pessimists compared to the previous quarter.

The BSP cited the following reasons for the higher CI number: improvement in peace and order; additional income; availability of more jobs; effective government policies; and increase in family savings.

Consumers’ optimism are apparently extended until the third quarter, according to survey results. For the next quarter and the year ahead, consumers' optimism remained generally steady, as the CIs showed a fractional decline from previous quarter's survey at 8.7 percent from 8.8 percent and at 23.1 percent from 24 percent, respectively, said the BSP.

“The relatively steady outlook for the next quarter and the year ahead stemmed from the counterbalancing of the number of respondents that reported more positive views on the economy, in anticipation of more jobs and additional income, versus those with negative views due to expectations of higher prices of goods,” the BSP explained.

The central bank also said that for the year ahead, consumers expect inflation and interest rates to increase and the exchange rate to continue to depreciate.

“The survey results showed that consumers anticipated inflation to increase, interest rates to go up and peso to depreciate in the next 12 months,” said the BSP. Consumers expected the rate of increase in commodity prices to be above the government's two to four percent inflation target range for 2018, at 4.2 percent over the course of the next 12 months or lower than the anticipated 4.7 percent in the first quarter 2018 survey, added the BSP. They also noted that more consumers expected unemployment rates to rise while fewer respondents anticipated the interest rate to increase and the peso to depreciate against the US dollar over the next 12 months compared the previous survey.

The survey measured CI based on the responses on economic condition, family financial situation, and family income.

The central bank said the latest numbers showed that better consumer sentiment on economic condition and family financial situation “outweighed” the less favorable outlook on family income, and these even became more positive compared to the previous results.

The sentiment across income groups also improved. The middle- and high-income groups as expected were still optimistic because of perceived peace and order improvement, additional income, and salary increase. The low-income group, in the meantime, continued to be pessimistic because of the expected higher prices of goods and low income.

For the next quarter, the sentiment of consumers was less favorable for the low-income, broadly steady for the high-income but was more upbeat for the middle-income group, said the BSP. “For the year ahead, consumer outlook was more optimistic for the low-income group but was less favorable for the middle- and highincome groups.”