Consumers upbeat but still wary of big purchases–BSP survey

Filipinos are now more optimistic about their economic prospects in the third quarter of 2021 as well as for the 12 months ahead, according to the latest central bank survey on consumer expectations.

In a briefing, officials of the Bangko Sentral ng Pilipinas said consumer sentiment was more upbeat for the current quarter and the year ahead compared to previous periods.

In particular, the confidence index for the third quarter 2021 reverted to positive 1.3 percent from the previous quarter’s survey result of -2.2 percent, while the next 12 months’ metric rose to 19.8 percent from the previous quarter’s survey result of 17.9 percent.

“According to respondents, their improved outlook during the current quarter was brought about by their expectations of more jobs and permanent employment; additional or higher income; and effective government policies and programs, particularly to address COVID-19-related concerns, such as the availability of vaccines, provision of financial assistance, and easing of quarantine restrictions,” the agency added in a statement.

Record-low buying intentions

But the survey also showed that the outlook on household spending on basic goods and services for the third quarter of 2021 declined to 25.4 percent, after posting an improvement of 29 percent in the previous quarter’s survey result.

More importantly, the survey revealed “record-low buying intentions for big-ticket items over the next 12 months,” the agency added.

The percentage of households in the country that considered the next 12 months as a favorable time to buy big-ticket items decreased to its lowest reading since the first quarter of 2007 at 3.6 percent from 3.7 percent in the first quarter of 2021.

The latest survey results also showed that consumers were anticipating an increase in interest rates and depreciation of the peso in the third quarter of the year, as well as over the next 12 months.

“Respondents also expected that the unemployment rate may rise for the third quarter of 2021, but decline over the next 12 months,” the central bank said. “Households anticipated that the rate of increase in commodity prices would remain within the government’s inflation target range of 2 to 4 percent for 2021—at 3 percent for the third quarter of 2021, and 3.2 percent for the next 12 months.”

Ease in getting loans noted

The survey also showed that one in every four households had contracted a loan over the last 12 months, of which, 90.2 percent experienced easier debt applications.

These results were contained in the second quarter Consumer Expectations Survey, which was conducted between April 21 and May 1, 2021. For the latest quarter’s survey, 5,702 households were polled, with 50.2 percent of respondents from the National Capital Region and 49.8 percent from provincial areas.

Of the sample size, 5,581 households responded to the survey, equivalent to a response rate of 97.9 percent. The middle-income group comprised the biggest percentage of respondents (40.3 percent), followed by the low-income group (36 percent) and the high-income group (23.7 percent). INQ