Consumer sentiments improve — survey

With higher pay and more work prospects, Filipino consumers are looking forward to the holiday season which usually starts as early as September when sources of income increase.

Based on the Bangko Sentral ng Pilipinas’ (BSP) third quarter Consumer Expectations Survey (CES), the overall confidence index (CI) which is still in the negative, managed to be less negative at -9.6 percent in the current quarter from -10.5 percent in the second quarter.

BSP Senior Director Redentor Paolo M. Alegre Jr., in a press briefing on Friday, Sept. 22, said that generally, consumers are less pessimistic for the months of July, August and the current month of September.

Alegre presented both the CES and the Business Expectations Survey results. He noted that the latest CES CI result means there is a decrease in the percentage of pessimists, which outweighed the decrease in the percentage of optimists.

The CI is computed as the percentage of households that answered in the affirmative less the percentage of households that answered in the negative with respect to their views on a given indicator. For example, a positive CI means a favorable view, and a negative CI is the opposite.

The latest CES indicated that consumer sentiments are less pessimistic for the third quarter because of the following: more available jobs and permanent employment; higher income from wages/salaries, remittances, and other sources; and additional working family members.

For the next quarter or the fourth quarter, the BSP said consumer sentiment improved as the CI rose to 7.8 percent from 4.6 percent in the previous survey.

As for the consumer sentiment for the next 12 months, it turned less optimistic with a CI of 18.9 percent from 20.5 percent in the second quarter.

In the current survey which was conducted July 3 to 14, the consumer outlook is mixed across the three component indicators and across income groups which was the basis for the CES.

As explained by Alegre, the overall consumer outlook index is computed as the average of the three component indices, namely: economic condition which refers to the perception of the respondent regarding the general economic condition of the country; family’s financial situation which is the level of household income (in cash as well as in kind), savings, outstanding debts, investments, and assets; and family income that includes primary income and receipts from other sources received by all family members as participants in any economic activity or as recipients of transfers, pensions, grants, and the like.

The result was that consumers were: less pessimistic for the country’s economic condition; more pessimistic for the family’s financial situation; and steady for family income.

Across income groups, it was less pessimistic among the low-income group, more pessimistic among the middle-income group, and less optimistic among the high-income group.

Based on the survey, the less negative outlook of the low-income group stemmed from their expectations of: more available jobs; effective government programs on livelihood assistance; and lifting of Covid-19 restrictions.

Meanwhile, the weaker sentiment of the middle- and high-income groups was attributed to their concerns about the faster increase in the prices of goods and lower income, said the BSP.

The BSP said consumers are less hesitant about buying big-ticket items in the third quarter. Based on its CI, it was less negative at -62.7 percent from -67.7 percent in the second quarter.

Meanwhile, the buying sentiment on big-ticket items for the next 12 months was less pessimistic as the CI turned less negative at -68.4 percent from -75.2 percent.

The BSP said consumers’ less pessimistic buying intent for the next 12 months was reflected across all big-ticket items. “The percentage of households that plan to buy/acquire real property within the next 12 months increased to 7.7 percent from 4.7 percent in the Q2 2023 survey results. In particular, more households plan to acquire residential lots, duplexes, and condominium units compared with the previous quarter,” it added.

The BSP noted that when asked about the price range of real properties they intend to purchase in the next 12 months, about 50.8 percent of the households indicated a range of P450,000 and below.

Meanwhile, 35.5 percent and 13.7 percent of households plan to buy a house and/or lot worth P450,001 to P1,700,000 and P1,700,001 and above, respectively.

The CES covered 5,404 households, of which 50.6 percent or 2,736 were from the National Capital Region or NCR and 49.4 percent or 2,668 are from areas outside of the NCR.

The middle-income group comprised the largest percentage of respondents with 38.4 percent, followed by the high-income group with 35.9 percent and the low-income group with 25.6 percent.

— Lee C. Chipongian