Consumer confidence dips

CONSUMER CONFIDENCE declined slightly in the first quarter but most Filipinos are optimistic with regard to the next three months and the year ahead, the Bangko Sentral ng Pilipinas (BSP) yesterday reported.

Results of the central bank’s latest Consumer Expectations Survey showed a confidence index (CI) of -11.2%, worse than the -10.4% recorded in the previous quarter.

“This indicates that the pessimists continued to outnumber the optimists, but the margin increased very modestly and remained narrow,” said Rosabel B. Guerrero, director of the BSP’s Department of Economic Statistics, in a briefing.

The central bank also noted that this was the third highest reading since the survey started in the first quarter of 2007.

Greater availability of jobs, increased investment inflows, expectations of higher income and lower household expenses due to broadly stable prices of goods were behind the steady outlook, Ms. Guerrero said.

She added, however, that “despite these favorable macroeconomic and family financial conditions, consumer confidence for the current quarter was weighed down by the damage caused by typhoon Pablo to infrastructure, agriculture, and private property in Mindanao, which was estimated at about P15.1 billion.”

For the succeeding quarter and the year ahead, however, the CIs improved to 7.8% and 18.5% from 6.3% and 16.8%, respectively.

“These indicate that the optimists increased and continued to outnumber the pessimists for the next quarter and the year ahead,” Ms. Guerrero said.

“Expectations of additional family income, increasing employment opportunities and brisker business fueled the strong consumer sentiment for the next quarter,” she added.

The three indicators of consumer confidence — sentiment on the country’s economic condition, family financial situation and family income — were mixed for the current quarter.

“The outlook on the family financial situation improved as respondents continued to expect more working family members, lower household expenses, family savings, and lesser debt payments,” Ms. Guerrero said.

However, consumer confidence in the economic condition of the country and family incomes declined as the damage caused by Pablo weighed on respondents’ sentiments.

“For the next quarter and the year ahead, the outlook on family financial situation and family income registered more favorable readings,” Ms. Guerrero noted.

“Higher expectations of additional income and more working family members supported respondents’ optimistic outlook for the year ahead,” the BSP official added.

Consumers also expect inflation to increase to 7.9% in the first quarter from 7% in the previous three-month period.

“Their views mirrored the increasing trend in the inflation readings in January and February 2013,” Ms. Guerrero said.

Consumer prices have been inching up, hitting a five-month high of 3.4% in February from January’s 3% and the 2.9% uptick recorded in December.

Ms. Guerrero also noted that households expected spending on goods and services to remain stable in the second quarter.

“In particular, respondents expected to spend less for food, clothing and footwear, medical care, fuel and transportation, but they anticipated to spend more for utilities such as water and electricity, communication, and restaurants.”

The latest survey was conducted from Jan. 21 to Feb. 3 and covered 5,670 households, 48.5% or 2,751 of which were in the National Capital Region. -Bettina Faye V. Roc, Reporter, Businessworld
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