Low pay, high prices weaken consumer confidence in 1st qtr

Consumer sentiment in the second quarter (Q2) of 2012 as well as the overall Confidence Index (CI) declined to -19.5 percent from the -14.7 percent in the first quarter (Q1).

Respondents cited some reasons for their outlook which includes perceived high cost of goods and services, rising unemployment, low salary and income and the expected higher household expenditures.

Meanwhile, weaker consumer sentiment during the quarter was noted across income groups.

The middle-income group recorded the highest drop in sentiment in terms on the economic condition of the country while the high-income group declined on the country’s economic condition but still remains optimistic on their family income and financial situation.

National Capital Region (NCR) and Areas Outside National Capital Region (AONCR) respondents, cited the higher prices of goods and services, low income, rising unemployment, and the anticipated increase of household expenditure as their primary reasons for a weaker outlook.

In terms of inflation, respondents expected it will increase to 8.8 percent from 8.3 percent in Q1 2012 survey while more respondents expected unemployment to rise over the next 12 months as the index increased to 60.2 percent from the 52.8 percent in the last quarter’s survey.

Respondents also see the peso would continue to depreciate.

Furthermore, the quarter-on-quarter decline in confidence was observed across the three component indicators of consumer confidence (the country’s economic condition, family financial situation, and family income).

Respondents’ outlook was lowest on the economic condition of the country, which is followed by family financial situation, and family income. Consumers were also concerned about the effect of higher prices of goods and lower employment opportunities on their income.

For the next quarter and the year ahead, the biggest drop in consumer sentiment was also reflected in the outlook on the macroeconomy.

Moreover, more households expected to spend more on basic goods and service in Q3 2012 compared to the previous quarter’s survey results.

The Bangko Sentral ng Pilipinas (BSP) expanded the Consumer Expectation Survey (CES) into a nationwide survey beginning Q1 2007. The CES samples were drawn from the National Statistics Office’s (NSO) master sample list of households, which considered a representative sample of households nationwide.
Share on email. –Aileen Lor, Daily Tribune