Filipino consumers are less optimistic about their prospects in the second quarter of 2020 and the rest of the year due to worries about inflation and stagnant income, according to the latest survey of the central bank.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said that consumers were less buoyant as the confidence index of the quarterly survey declined in the April to June period — though remaining positive — at 9.2 percent from the survey result of 15.7 percent for first quarter.
The confidence index for the next 12 months also came in lower at 19.9 percent from the previous quarter’s expectations of 26.4 percent for the year ahead.
“Consumers cited anew their anticipation of faster increase in the prices of goods; low or no increase in income; natural calamities and the coronavirus pademic; and higher household expenses as reasons for their less upbeat outlook for the second quarter of 2020 and the next 12 months,” the central bank said.
The confidence index is computed as the percentage of households that answered in the affirmative less the percentage of households that answered in the negative with respect to their views on a given indicator.
The overall consumer confidence index measures the average direction of change in three indicators—overall condition of the economy, household finances and household income.
This latest consumer expectations survey was conducted from late January to early February among 5,555 households nationwide.
The central bank said that, for the second quarter of 2020 and the next 12 months, the sentiment of consumers across income groups was generally less upbeat compared to the previous quarter’s survey results.
The country’s spending outlook index of households on basic goods and services declined to 33.3 percent for the second quarter from the pervious survey result of 37.1 percent, indicating that growth in consumer spending may slow in the next three months.
“This suggests that while more respondents continued to expect higher spending on basic goods and services, the number that said so decreased compared to the [previous] survey result,” the BSP said.
Across commodity groups, households’ spending outlook was mixed.
Fewer respondents expected higher spending on electricity; food, non-alcoholic and alcoholic beverages, and tobacco; fuel; personal care and effects; transportation; education, recreation and culture; clothing and footwear; restaurants and cafes; and communication.
More respondents expected an increase in expenditures on medical care, but steady for water, house rent and furnishings.
The survey results showed that consumers anticipated the interest rates to increase and the peso to depreciate for the second quarter of 2020 and the next 12 months.
The respondents also expected the unemployment rate to rise for the second quarter, but to decline over the next 12 months.
One in every 10 respondents expressed intention of applying for a loan in the second quarter of 2020 and perceived that access to credit will be easy.
Similarly, 9.8 percent of the surveyed households reported that they would borrow funds in the next 12 months, of which 92 percent thought that their credit application would be easy.