Filipino consumers, businessmen upbeat on 2021 prospects — BSP survey

MANILA, Philippines — Confidence returned to Filipino consumers when polled about their expectations for the first quarter of 2021, reversing the negative sentiment about the current quarter, in the latest survey conducted by the central bank.

At the same time, a parallel survey of the Bangko Sentral ng Pilipinas also showed that local businesses were even more positive about their prospects in the first three months of next year, further building on the muted optimism they expressed in the previous quarter.

The country’s consumers were also less pessimistic for the current quarter as the overall confidence index improved to -47.9 percent from -54.5 percent in the third quarter of 2020.

According to respondents, their improved outlook was brought about by their expectations of the availability of more jobs and permanent employment; additional and higher income; effective government policies and programs such as the Social Amelioration Program and the Plant, Plant, Plant Program; and the easing of community restrictions, reopening of businesses and a possible end to the coronavirus disease (COVID-19) pandemic.

For the first quarter of 2021, the confidence index reverted to positive territory at 4.3 percent from the previous survey result of -4.1 percent for the current quarter.

Consumers cited their anticipation of the availability of more jobs and more working family members; additional and higher income; the possible end of the health crisis as well as the discovery of COVID-19 vaccine, and the reopening of businesses as reasons behind their optimism.

Meanwhile, consumers’ outlook for the next 12 months remained optimistic as the confidence index was measured at 23.6 percent, although slightly lower than the third quarter of 2020 survey result of 25.5 percent.

Business sentiment on the economy improved for the first quarter of 2021 with the next quarter’s confidence index rising to 37.4 percent from the previous quarter’s survey result of 16.8 percent.

The respondents’ more buoyant outlook for the first three months of next year was associated mainly with expectations of the reopening of firms and adapting to the “new normal;” the gradual recovery from the coronavirus pandemic, particularly with the anticipated availability of the vaccine; the relaxation of quarantine restrictions, and rising sales and orders.

Similarly, the business outlook on the country’s economy was more optimistic for the next 12 months as the confidence index rose to 57.7 percent from the previous quarter’s survey result of 37.5 percent.

In the current quarter, the business sentiment of the industry and construction sectors was more upbeat, while the sentiment of the services and wholesale and retail trade sectors turned optimistic.

For the first quarter of next year, business confidence indices rose across sectors as they expected people to adjust to the new environment and for the economy to recover from the pandemic.

Increases in sales and market demand, new projects and new product lines were also cited as reasons for the more upbeat sentiment across sectors.

/MUF