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Filipino consumers more optimistic for Q2
By Melissa Luz T. Lopez, Senior Reporter
MORE Filipinos grew optimistic for the second quarter amid perceived improvement in peace and order, and bigger incomes, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
Results of the latest Consumer Expectations Survey saw a net confidence index of 3.8%, improving from the 1.7% score tallied from January-March. The figure, however, dipped from the record-high 13.1% net optimism score posted during the second quarter of 2017.
The BSP conducted the poll among 5,517 families between April 2-14 that weighed the number of Filipinos with an optimistic outlook versus those who are pessimistic about local economic conditions, and of their family’s financial situation and income.
Redentor Paolo M. Alegre, Jr., head of the BSP Department of Economic Statistics, said the rosier outlook among households came on the back of “improving” peace and order situation, higher income, the availability of more jobs, the implementation of “effective” state policies, and higher family savings.
Respondents grew less sanguine during the first quarter amid higher prices of goods and rising household expenses, which came just as the Tax Reform for Acceleration and Inclusion (TRAIN) law took effect.
Starting Jan. 1, TRAIN reduced personal income tax rates but has been offset by the removal of some value-added tax breaks; higher fuel, automobile, mineral and coal excise tax rates, as well as new levies on sugar-sweetened drinks and cosmetic surgery.
Optimism remained in the positive territory since the third quarter of 2016, or about the time when President Rodrigo R. Duterte assumed office. Prior to that, quarterly net confidence scores were negative, which showed that more residents were doubtful of local prospects.
“Everything is going well,” BSP Deputy Governor Diwa C. Guinigundo said in a press briefing, saying that household spending could remain robust and support economic growth during the period.
More Filipinos said they see better economic conditions in the Philippines, with a net score of 5.7% reversing a -0.1% reading during the first quarter. In turn, family financial situations are also seen improving, with the net score reversing to 0.2% from a -1.3% score previously, with optimists now outweighing pessimists.
On the flipside, fewer households said they are upbeat about their income outlook as the net score slipped to 5.5% from 6.6%.
Optimism generally improved for all Filipinos, although fewer Metro Manila residents said they were bullish about current-quarter conditions as the confidence index dipped to 7.8% from 12.1% the previous quarter. Those based in the provinces grew more upbeat as the net score rose to 3.2% from 0.1%.
Low-income groups remained broadly pessimistic at -7.9%, Mr. Alegre said: “For the current quarter, the low-income group remained pessimistic due to the expected higher prices of goods and low income, but the number that said so declined relative to the previous quarter survey results.”
Meanwhile, middle-income and high-income consumers remained upbeat about their outlook from April-June amid expectations of salary increases and additional incomes.
Despite the brighter outlook, fewer families saw the quarter as a good time to make big-ticket purchases as they “prioritize” food and other basic needs at a time of high prices, the BSP said.
In particular, consumers expect inflation to increase, interest rates to rise and for the peso to weaken further over coming year. Inflation is seen clocking in at 4.2% for the full year — beyond the 2-4% annual target but actually lower than the 4.8% expected during the first quarter.
For the third quarter, consumer optimism steadied at 8.7%. The outlook is also seen little changed over the next 12 months, according to the survey results.