Sentiment of Filipino consumers improved in the first quarter, signaling a potential rise in household spending that could have fueled faster growth of the economy during the period, monetary officials said.
According to the Bangko Sentral ng Pilipinas, consumers’ sentiment has a positive correlation with growth of the economy, and so the favorable development in the sentiment of Filipino consumers augurs well for the economy’s performance in the first quarter.
Results of the latest quarterly Consumer Expectation Survey, conducted nationwide by the central bank from January 23 to February 8, showed that the confidence index (CI) of consumers stood at -14.7 percent, improving from the -20.6 percent recorded a quarter ago and the -23.1 percent of a year ago.
The index reflects consumers’ outlook regarding their families’ income situation and the economy’s growth performance. It is the difference between the percentage of respondent households that are optimistic against those that are pessimistic.
The reasons cited by respondents for the improved sentiment included availability of more jobs that increased the number of employed family members, higher salaries of employed family members, perceived improvement in public governance, inflows of foreign investments into the country and the appreciation of the peso.
The CI has always been in the negative territory since the BSP started conducting the survey in 2004. Monetary officials explained that this was because Filipino consumers tended to underestimate their actual income situation and to be pessimistic about the economy.
“The CI is still negative, but it is less negative, indicating that consumers are more upbeat about their short-term outlook on the economy and their own financial situation,” A BSP official said Thursday.
The “next quarter CI,” which indicates expectation of respondents about their financial situation and the economy’s performance for the coming quarter, stood at +2.8 percent, the same as that registered in the survey a quarter ago, and a reversal of the -6.2 percent reported last year.
The “next year CI,” which indicates expectation of respondents about their financial situation and the economy’s performance in the next 12 months, stood at +11.9 percent. This was less than the +14.6 percent registered a quarter ago, but much better than the +1.2 percent of last year.