CONSUMER CONFIDENCE hit an all-time high in the second quarter, laying the groundwork for the economy to maintain its upward trajectory, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
The overall confidence index of the Consumer Expectations Survey (CES) hit -5.7% for the period April-June, surpassing the previous peak of -8.5% in the fourth quarter of 2010. It also improved on the -11.2% in the first quarter and the -19.5% last year.
The scores — computed as the percentage of optimistic households less the percentage of pessimistic households — are still in the negative, indicating there are still more pessimists than optimists, though the margin is at its narrowest now.
The CES measures consumer confidence in three areas: economic condition of the country, family financial situation and family income.
“Notably, consumer perceptions on the economic condition of the country (-4.4%) and family financial situation (-9.6%) were at record highs, while their outlook on family income (-3%) was at its second-highest reading,” the survey read.
Consumer confidence also improved across all income groups, with the high-income group the most buoyant, it added.
Citing reasons for optimism, Filipinos anticipated better employment conditions: job opportunities, salary increases and increased investments for job creation.
They were also heartened by the strength of the economy, as seen in the low inflation, stable exchange rate and healthy overseas remittances. The investment grade credit rating awarded by Fitch Ratings capped off a strong second quarter for the Philippines.
Moreover, the survey showed Filipinos considered the second quarter as a favorable time to buy big-ticket items such as a house and lot, cars and consumer durables. Buying intentions were broadly steady for these big-ticket items for the rest of the year, too.
Filipinos also had a broadly steady outlook for spending on basic goods and services, particularly water, transportation, communication and restaurants. However, they expected increased spending on education, clothing and footwear with the opening of the school year and the tuition hikes.
As consumption makes up nearly 70% of the economy, BSP Assistant Governor Cyd N. Tuaño-Amador said the rosy outlook of consumers could support growth for the second quarter.
“This should provide grounds that the economy will remain at a broadly stable growth path,” she said in a press conference on Friday.
She added that growth in the second quarter could register at a “respectable pace, similar to the first quarter.”
The economy grew by a robust 7.8% in the first three months of 2013, breaching the government’s target of 6-7% and outpacing the rest of Asia, even China.
For the next quarter and the year ahead, consumer sentiment continued on the up as the overall confidence index registered at 4.1% and 16.1%, respectively. –Diane Claire J. Jiao, Businessworld