Consumer confidence hits record high

MANILA, Philippines – The confidence level of Filipino consumers for the next 12 months hit a new record high with the fresh mandate of president-elect Benigno Aquino III and vice president-elect Jejomar Binay, results of a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

Rosabel Guerrero, director of the BSP’s Department of Economic Statistics (DES), said in a press conference that the consumer confidence index for the next 12 months hit a new record level of 10 percent in the second quarter of the year versus the 5.1 percent recorded in the first quarter of the year, as shown in the 2nd quarter 2010 Consumer Expectations Survey (CES).

Data showed that the new record eclipsed the previous record of 7.9 percent recorded in the third quarter of 2007. It was also a complete reversal of the -7.6 percent registered in the same quarter last year.

The consumer confidence index for the next 12 months finally turned positive in the first quarter with 5.1 percent after being in the negative territory over the past seven quarters.

“By contrast, with favorable expectations over the fresh mandate to be exercised by newly elected national and local government officials, consumer confidence over the course of the next 12 months reversed gear and turned more positive,” Guerrero said.

Likewise, she added that the consumer sentiment over the next three months reached its second highest level of -1.8 percent since the positive 4.1 percent registered in the third quarter of 2007.

She said the improved outlook for the next quarter mirrored the rebound in consumer confidence in other countries such as the United States, China, Mexico, Hungary, Slovenia, and Czech Republic.

However, Guerrero said consumer confidence for the second quarter of this year weakened slightly to -28.7 percent from -27.6 percent in the first quarter of the year amid concerns over the impact of the El Niño dry spell on agricultural output and near-term uncertainties in the job market as new graduates enter the labor force.

For his part, BSP Deputy Governor Diwa Guinigundo said the long-term outlook is more important than the short-term outlook that was caused by temporary reasons, including the impact of the El Niño weather condition on the agricultural sector and more entrants into the labor force as more graduates seek jobs.

“This high record of optimism since the CES was made national in terms of scope is something that is very important, this is more long term compared to the current quarter,” he stressed.

Guinigundo added that it is also important to note that consumers have a more favorable view on the trend of selected economic indicators such as unemployment rate, interest rate and inflation, among others.

The survey showed that the employment situation is anticipated to improve in the next 12 months, inflation is expected to edge lower, interest rates would continue to be on a downtrend, and the peso will continue to strengthen against the US dollar on the back of strong foreign exchange inflows from overseas Filipino workers (OFWs), the business process outsourcing sector, and the rebounding export sector.

It also revealed that there was improved consumer confidence for all three indicators composed of economic condition of the country, family financial situation, and family income.

Data showed that the consumer indices on economic condition for the next 12 quarters set a new record high of 7.4 percent in the second quarter from 1.1 percent in the first quarter, while that on family condition improved to 7.5 percent from 4.4 percent. The index for family income improved to 15.2 percent in the second quarter from 9.9 percent in the first quarter.

The Cabinet-level Development Budget Coordination Committee sees the country’s gross domestic product (GDP) growth between 2.6 percent and 3.6 percent this year from 0.9 percent last year.

However, the country’s GDP grew at its fastest pace in almost three years after expanding by 7.3 percent in the first quarter of the year from 0.5 percent in the same quarter last year.

The National Economic and Development Authority (NEDA) expected the GDP to expand by 2.9 percent to 3.9 percent in the first quarter of the year.

This early, economic managers are looking at revising upwards its GDP growth target from 5.9 percent to 6.9 percent due to the stronger-than-expected growth in the first quarter of the year. –Lawrence Agcaoili (The Philippine Star)