Moderating and well-behaved inflation, as well as increased business activities in the run- up to the long Christmas holidays, helped push the consumer confidence index (CI) higher in the fourth quarter to minus 21.8 percent, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
This was sharply higher than the CI of only minus 26.3 percent a quarter earlier, and betrays the growing confidence of consumers on the country’s economic prospects and their own financial standing.
The BSP said the results of the latest quarterly consumer expectations survey (CES) show households across the 7,100 islands making their sentiments known by opening their wallets no matter the disappointment generated by local output, measured as the gross domestic product (GDP), averaging only 5.3 percent in the third quarter.
CIs are computed as the percentage of optimistic respondents
minus the percentage of consumers
indicating otherwise. A negative CI for the quarter means that the number of optimists increased, but that pessimists continued to exceed the number of optimists during the period.
Consumers cited stable commodities prices, good harvests and expectations of higher earnings, represented by the 13th-month pay and the Christmas bonus, as major factors to the more optimistic outlook for the period.
Other reasons cited for the more sanguine consumer outlook include good harvests and brisker business activity leading to higher household income during the period.
The increasingly bullish outlook of consumers in the country
mirrored the improved sentiment of households in Australia, China, Indonesia, Thailand and the US but was in contrast to the steady outlook in the euro area and the less optimistic views of consumers in Japan, South Korea, Taiwan and the UK.
Consumer sentiment for the quarter ahead also finally pushed higher to positive territory, averaging 0.7 percent.
Consumer confidence also rose across the three indicators the central bank measures, namely, the country’s economic condition, the households’ family financial conditions and family income.
“Consumers’ confidence on the country’s economic condition improved in the current quarter and next quarter but weakened for the year ahead. Similarly, consumers anticipated their family financial conditions to be more favorable for the current quarter and next quarter and to be stable for the year ahead compared to the previous quarter’s survey results. Their outlook on family income in the current quarter was broadly unchanged but improved for the next quarter and the year ahead. The improved outlook across the three indicators was attributed by respondents to expectations of brighter job prospects, stable prices of commodities, additional income and lower debt payments,” according to the BSP.
Likewise, consumer confidence improved across all income groups—particularly among low-income and high-income groups.
The high-income group continued to be the most optimistic among all types of income groups.
“The outlook of the low-income group improved for the current quarter and next quarter, but sentiment for the year ahead broadly weakened. The middle-income group consistently reported improvement in consumer confidence for the current quarter and next quarter, as well as for the year ahead. Meanwhile, the sentiment of the high-income group increased in the current quarter but held steady for the next quarter, and the year ahead. These suggest that improvement in consumer outlook was broad-based “evident across income groups” with the middle-income group showing the biggest improvement in sentiment. The high-income group continued to be the most optimistic,” the BSP said.