Consumers upbeat in Q2, but see slow business

CONSUMER sentiment continued to improve in the second quarter, thanks to an increased number of employed family members, improvements in peace and order, and stepped-up roadwork, among other factors.

But consumer sentiment about the upcoming third quarter is less upbeat, amid expectations of poor harvests, slower business during the rainy season and higher household expenses.

The Bangko Sentral ng Pilipinas (BSP) released yesterday the results of its Consumer Expectations Survey that was conducted from April 1 to 14, 2014.

It said the overall confidence index (CI) edged up to -17.3 percent from -18.8 percent in the first quarter.

“The higher (but still negative) CI in the second quarter means that the number of households with an optimistic outlook increased, but they continued to be outnumbered by those who think otherwise,” the BSP said.

The CI is computed as the percentage of households that answered yes, less the percentage of households that no, with respect to their views on a given indicator.

Respondents attributed their more favorable outlook in the second quarter to the following factors: availability of jobs as well as an increase in the number of employed family members; increasing family income due to higher salary, stronger business activity, and better harvests; stepped-up road infrastructure projects; more investment prospects in the country; and improvement in the peace and order situation. But for the third quarter and the year ahead, “consumer sentiment turned less upbeat.”

How is confidence measured?

According to respondents, they expected lower income due partly to poor harvests and slower business activities during the rainy season, which could cause work interruptions.

They also expected higher household expenses (for education and maintenance medicines, for example) and fewer job opportunities.

“The overall consumer confidence is measured using three indicators–economic condition of the country, family financial situation and family income,” the BSP explained.

For the current quart er, respondents were more confident about the country’s economic condition and their family income. Their outlook on family finances remained unchanged.