By Ana Olivia A. Tirona, Researcher
FILIPINOS were the third most optimistic consumers among 14 Asia-Pacific economies, as economic activity in the region picked up, a survey by US-based think tank The Conference Board showed.
Based on the results of the latest Global Consumer Confidence Survey, the Philippines scored 119 on the consumer confidence index (CCI) during the first three months of the year. However, this was four points lower than country’s CCI score of 123 in the fourth quarter last year.
The Philippines’ score was a tad higher than the Asia-Pacific average of 118 during the quarter, ranking third behind India and China.
Globally, the Philippines ranked fifth out of 65 economies, placing after India, Saudi Arabia, China, and the United Arab Emirates.
A CCI reading of above 100 means there are more optimistic than pessimistic consumers.
The country was among the 20 out of 65 economies posting a CCI score above 100 for the quarter.
“Asia-Pacific had one of the highest levels of consumer confidence. Indeed, effective containment measures, fiscal stimulus packages in both advanced and emerging economies in the region, plus a comparative advantage in exports of goods and technology, helped maintain household finances, bolstered job prospects, and boosted confidence,” the report said.
“The rise in confidence was the result of gains in all three drivers of confidence, especially rising sentiment about personal finances.”
Conducted by the Conference Board in collaboration with Nielsen, the CCI measures how optimistic or pessimistic consumers are on the state of their respective economies in the present and near future.
In particular, it looks at consumers’ perception of job prospects and personal finances over the next 12 months, as well as how good of a time it is to buy “needed/wanted” goods and services.
About 59% of Filipinos improved their sentiment on personal finances in the first quarter from 54% previously. This was higher than the 40% across Asia-Pacific from 26% in the fourth quarter.
However, Asia-Pacific households were more concerned about their health, and less about the economy and job security, the report said.
Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said the country’s labor activity was “constrained by the drop in their disposable incomes” due to the implementation of the enhanced community quarantine (ECQ) — the strictest form of lockdown — in late March. This, in turn, caused the country’s CCI score to drop.
“Aside from the ECQ, rising inflation may have eroded consumer confidence as meat and vegetables took a bigger share of the consumer’s basket of goods and services. Meat was easily 20% more expensive in [first quarter of 2020] than the same time last year after all,” he said in a Viber message.
Security Bank Corp. Chief Economist Robert Dan J. Roces said economic authorities are faced with the challenge of bringing back consumer confidence to boost consumption on durable goods and big-ticket items.
From a global perspective, the average index score across 65 markets was recorded at 108. This was an increase of 10 points from the previous quarter’s 98, signaling improvement in consumer confidence.
Likewise, the Conference Board noted the “lightening in moods” among global consumers was an effect of expanded vaccination campaigns and government actions toward the reopening of the economies.
Apart from a faster vaccine rollout and adequate vaccine supplies, Mr. Neri said “policies to improve supply as well as to temper demand may be necessary to keep inflation in check,” which could help maintain and improve consumer optimism in the economy for the following quarters.
Still, uncertainty remains high in the coming months, Mr. Roces said.
“Clear communication of programs would help, and therefore the willingness to go out and engage in service and economic activities, or true demand recovery, will follow,” he added.