The first-quarter Consumer Expectations Survey (CES) — which the Bangko Sentral ng Pilipinas (BSP) conducted among 5,673 households last Jan. 21-30 — showed fewer respondents pessimistic of the local economy for the current quarter even as they still outnumbered optimists to yield a -5.7% net score.
The reading matches the reading logged in 2013’s second quarter and is, so far, the best score since CES coverage expanded in the first quarter of 2007 to the entire country, from just Metro Manila in preceding years to the third quarter of 2004 when the survey began.
The survey measures the number of Filipinos optimistic or pessimistic of local economic conditions, as well as their family’s financial situation and income.
The same CES round shows respondents being the most optimistic in five years on upcoming economic conditions.
Specifically, the confidence index (CI) for the “next three months” logged 9.1% while CI for the “next 12 months” came in at 25.4%, which were the best reading since the 11.9% and 25.9%, respectively, recorded in the fourth quarter of 2010.
The central bank attributed the continued improvement in sentiment to expected availability of more jobs, stable prices of commodities, more investors in the country, oil price rollback, assistance from government such as the conditional cash transfer for identified poorest households, less corruption and anticipated election of new government officials.
“Outlook of consumers in the Philippines mirrored the improved sentiment of consumers in Canada, China and Taiwan but was in contrast to the less optimistic views of those in the Euro Area, Indonesia, Japan, South Korea, Thailand, United Kingdom, and the United States for Q1 2016,” the central bank said in its statement.
Noting that consumers were actually more optimistic on the quarter and the year ahead, the BSP recalled they “were of the view that good governance and improvements in infrastructure and peace and order would continue over the next 12 months.”
“They also anticipated lesser household expenses as well as an increase in household income and savings which could translate to growth in real income and higher purchasing power of the household.”
Consumer confidence has component indicators, namely: the country’s economic condition, family financial situation and family income.
“For Q1 2016, consumer confidence on the country’s economic condition and family financial situation improved, while outlook on family income was steady,” the statement read, adding: “Notably, consumer perception on family financial situation registered the highest CI at -6.3% since Q1 2007.”
“For the next quarter (Q2 2016) and the year ahead, consumers’ views on all three indicators turned more sanguine as consumers expected continuing improvements in the country’s economic condition due partly to the coming change in administration and better financial conditions,” the central bank noted further.
Still, expected spending in the quarters ahead bared underlying cautiousness. Specifically, CI on “amount of expenditures next quarter” dropped 4.2 percentage points from the fourth-quarter survey to 30.0%, a record low since 2007.
The percentage of households considering the current quarter as a “good time to buy” slipped to 29.6% from 30.2% in 2015’s fourth quarter but was still slightly better than the 28.4% seen a year ago.
“Percentage of households who intend to buy in the next 12 months”, however, rose to 11.3% from fourth quarter 2015’s 10.1%, but was still slightly less than the 11.6% recorded a year ago.
Percentage of households with savings increased to 32.7% this quarter from 31.6% a year ago,
The percentage of respondents that considered the current quarter as a good time to buy big-ticket items was “broadly steady at 29.6%”, said the BSP, noting that the outlook on buying conditions improved for real estate, but weakened for consumer durables and motor vehicles.
In a press briefing, BSP Deputy Governor Diwa C. Guinigundo said there was a “statistically significant” link between consumer spending outlook and economic growth. Greater demand for more goods and services seen every election year also contribute to a less pessimistic outlook, he added.
Source: B world