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BSP: Consumers more upbeat in Q1

More high-paying jobs, good harvests perk up PH

MANILA, Philippines—Filipino consumers turned less pessimistic in the first three months of the year as higher paying jobs became more available while favorable weather across the country resulted in bountiful harvests.

Results of the Bangko Sentral ng Pilipinas (BSP) Consumer Expectations Survey (CES) for the first quarter showed that the overall index of consumers improved to -18.8 percent from the -21.3 percent of the previous quarter.

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Historically, CES results have always been in the negative territory, implying that families with pessimistic outlooks outnumbered the more confident households.

“Respondents attributed their favorable outlook to the … availability of more jobs, increase in the number of employed family members, more investment products, higher income … and good harvests,” the BSP said in a statement.

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Many families also cited “good weather” as a cause for optimism, it added.

The confidence index is measured using three indicators—the outlook for economic conditions in the country, the financial situation of families, and family income.

More families indicated that financial support from household members increased due to the availability of more jobs, the continued implementation of the government’s Pantawid Pamilyang Pilipino Program, and good governance.

Consumers’ outlook for the next quarter and the rest of the year improved to 5.4 percent and 19.3 percent, respectively.

Across income segments, there was an across-the-board improvement in the outlook for the country’s overall economic situation, while results were mixed for household situations and family income.

“According to consumers, their more optimistic outlook is due to expectations of more job opportunities and good weather conditions in the quarter ahead,” the BSP explained.

Consistent with the less pessimistic outlook, consumers said they would more likely spend on big-ticket items such as real estate, appliances and motor vehicles.

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The index for households that considered the first quarter of the year as a good time to buy big ticket items improved to 24.1 percent, from 23.8 percent in the previous quarter.

The higher spending outlook defied consumers’ expectation of rising inflation in the current quarter, BSP results showed.

The survey showed that consumers expected prices to rise by 8.4 percent compared to the 7 percent reported in the fourth quarter.

“This indicates that inflationary expectations increased compared to a year ago,” the BSP said.

“Consumers respond based on what they see and buy on a daily basis,” BSP Deputy Governor Diwa C. Guinigundo said, explaining the divergence between consumers’ estimate for inflation against actual government numbers.

Respondents also expected the peso to continue to depreciate against the US dollar, “influenced in part by the recent weakening of the peso against the dollar.”

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TAGS: Bangko Sentral ng Pilipinas, BSP, confidence index, consumer confidence, Diwa C. Guinigundo, economic outlook
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