BSP cites consumers’ downbeat sentiment

Households in the country expect smaller incomes and higher expenses amid tougher economic conditions in the current quarter of the year, results of a survey by the Bangko Sentral ng Pilipinas (BSP) showed.

The BSP’s Consumer Expectations Survey (CES) for the fourth quarter showed that the mood of consumers in the country was at its most pessimistic since the second quarter of 2011, despite the above-target growth rates for the economy.

Consumers surveyed by the BSP cited “higher prices of commodities as adverse weather conditions resulted in poor harvests, weak public governance particularly issues relating to the Priority Development Assistance Fund (PDAF), and concerns over the peace and order situation.”

The confidence index for the fourth quarter worsened to -21.3 percent from -7.9 percent in the third quarter. The latest score is the lowest since the second quarter of 2011, when the index dropped to 24.1 percent.

The BSP said dips in confidence were recorded across three indicators—economic conditions of the country, households’ financial situations, and family income levels.

The biggest decline was seen in the perception over the economic conditions of the country, dragged down by the “pork barrel” issue in Congress.

“For the current quarter, respondents’ outlook on the country’s economic condition declined to a 10-quarter low on concerns over the PDAF issue, while the outlook on family finances and income weakened moderately,” the BSP said.

BSP Deputy Governor Diwa C. Guinigundo said Typhoon “Santi,” which hit the country in October may have led to pessimism among investors. The conflict in Zamboanga City in September, right before the survey was conducted, may have also affected the results.

Guinigundo said the earthquake in Bohol and Cebu, and Supertyphoon “Yolanda” both happened after the survey was conducted.

He said survey results for the quarter may be an indication that consumer spending in the current quarter may slow down, given the “statistically significant” correlation between the CES results and economic growth.