Economy



By Imee Charlee C. Delavin, Reporter


Filipinos near top in consumer confidence




Posted on January 27, 2015


CONSUMER CONFIDENCE in the Philippines improved in the last three months of 2014, research firm Nielsen said on Monday, with the survey’s results putting Filipinos among the world’s most confident consumers.

Luxury car shopping at a Jaguar showroom in Manila -- BW File Photo
The Philippines recorded a five-point rise to 120 from 115 in the previous quarter’s survey -- against a global average of 96, which fell from 98 in the third quarter. That outcome represents one of the largest quarterly increases globally, propelling the Philippines to the number 2 spot alongside Indonesia. Indonesia was going the other way with a 5-point fall from its third-quarter score to 120, Nielsen said in a statement announcing its latest Global Survey of Consumer Confidence and Spending Intentions.

India remains the most optimistic consumer market at 129, up three points. Other Asia-Pacific countries remain relatively strong with Thailand in fifth place at 111, down two points. Vietnam was at 106, up four points, and Singapore at 100, down three points. Malaysia, on the other hand, recorded the largest quarter-on-quarter decline globally at 89, down 10 points from the third quarter and seven points below the global average.

The survey -- which polled over 30,000 online respondents in 60 economies, including 500 in the Philippines from Nov. 10-28 -- measures consumer confidence, major concerns, and spending intentions. Scores above and below a baseline of 100 indicate degrees of optimism and pessimism.

Nielsen Philippines Managing Director Stuart Jamieson said “the spike in consumer optimism is a result of several key developments.”

“One of which is the continuous expansion of the business process outsource (BPO) industry which provides the bright spot in the Philippine economy. Related to this, unemployment was also found to be at its lowest in 10 years as a result of a growing economy. Such factors are major influencers in further expanding the middle class or the new consumer class who spend on technology, real estate, consumer and retail goods, and travel,” he said.

Seventy-nine percent of the Filipino respondents said they were positive about the state of their personal finances over the next 12 months, and although 50% of Filipinos perceive “it is a good time for people to buy the things that they want and need,” Nielsen said Filipino consumers along with consumers across Southeast Asia continue to be among the world’s most avid savers.

“More than three in five Filipino respondents (63%) say they prioritize saving their spare cash, compared to 69% of consumers in the region and 43% globally. Consumers in Vietnam are the highest globally (77%) when it comes to savings, and Indonesia ranks third globally (70%). Consumers in Malaysia (67%), Thailand (63%) and Singapore (62%) follow closely,” the Nielsen statement added.

“It is a positive indicator of financial health when you see consumers who are conscientiously planning their financial future,” Mr. Jamieson said. “As disposable income becomes more readily available than before, consumers have the capacity to boost their savings and to invest their spare cash, driving greater demand for banking and finance services.”

While establishing financial security takes center stage for consumers in the Philippines, he noted that “consumers are spending to a degree.” “After putting spare cash into savings, 35% (down two points) of Filipinos spend on new clothes, 32% (up three points) on home improvements, 29% (up by a point) on holidays and 29% on new technology products (up a point).”

Apart from savings, Nielsen said consumers in the Philippines are also focused on clearing their debts at 32%, along with Singapore, where the equivalent score was 31%. About a third of Malaysians, Indonesians and Thais for their part are channelling their spare cash into stocks/mutual funds.

The Nielsen statement also said at least eight in 10 consumers in the Philippines have adjusted their spending habits over the past 12 months in a bid to curb household spending.

More than six in 10 consumers in Philippines (62%) are spending less on new clothing in their effort to reduce household expenses. Consumers are also cutting back on gas and electricity, delaying upgrading of technology, and switching to cheaper grocery brands.

Sought for comment yesterday, Communications Secretary Herminio B. Coloma, Jr., said: “We are encouraged by such results, while being aware of the need to intensify reforms so that economic gains may be sustained.”