Filipino consumers turned more pessimistic about their prospects for the current quarter and, more importantly, also turned less upbeat about their prospects going into the Christmas season as well as the year ahead, the latest central bank survey showed.
In a press briefing, officials of the Bangko Sentral ng Pilipinas disclosed that the overall confidence index of consumers reverted to negative territory for the third quarter of the year after eight consecutive quarters of positive consumer readings.
The confidence index fell to -7.1 percent in the current quarter from 3.8 percent in the second quarter.
“The negative index indicates that the pessimists outnumbered the optimists for the third quarter of 2018,” BSP’s Department of Economic Statistics head Redentor Paolo Alegre Jr. said.
According to respondents, their negative outlook for the third quarter was mainly brought about by their expectations of an increase in commodity prices, low salary or income, higher household expenses, high unemployment rate and no increase in their income.
High prices of goods
“Respondents also noted concerns on higher educational expenses and higher transportation expenses as reasons behind their gloomy prospects,” Alegre said.
For the next quarter and the year ahead, consumers optimism turned less positive as the confidence indices declined approximately by half from the previous quarter’s survey to 3.8 percent from 8.7 percent and to 13 percent from 23.1 percent, respectively.
“Similar to the current quarter, respondents cited expectations of high prices of goods, low salary or income and the rise in expenditures as reasons for their less upbeat outlook for the near term and the year ahead,” the BSP official said.
Indicators
Consumer outlook is measured across three component indicators, namely, the country’s economic condition, family financial situation and family income. The quarter-on-quarter decline in confidence was observed across these three component indicators of consumer confidence.
The confidence index for the country’s economic condition and family financial situation reverted to negative territory for the current quarter while family income remained positive but lower from a quarter ago. For the next quarter, outlook on economic condition of the country was pessimistic, broadly steady and positive on family financial situation and more optimistic on family income. For the next 12 months, consumer confidence on the three component indicators was less upbeat.
Sentiments of high-income group
Consumer outlook across income groups weakened for the current quarter, next quarter and the year ahead. For the current quarter, the outlook of the low- and middle-income groups was pessimistic given their expectations of higher household expenditures and no increase in income.
Meanwhile, the high-income group was less buoyant as they anticipated peace-and-order problems and peso depreciation. For the next quarter, the sentiment of consumers turned negative for the low-income group, but became less positive for the middle- and high-income groups. For the year ahead, consumer outlook was less upbeat across all income groups.