Consumer confidence more pessimistic in third quarter but more optimistic for fourth quarter, next 12 months: BSP
Consumer sentiment was more pessimistic in the third quarter as the overall confidence index (CI) declined to -12.9 percent from -5.2 percent in the second quarter.
The decline in the index in the third quarter relative to the previous quarter indicates that the number of households with pessimistic views increased and continued to outnumber those with optimistic views.
The weaker confidence among consumers was largely due to their concerns over the: (1) faster increase in the prices of goods and higher household expenses, (2) low income, and (3) fewer available jobs and working family members.
Meanwhile, the sentiment of consumers was more optimistic for the fourth quarter and the next 12 months as the CIs increased to 13.4 percent (from 11.2 percent) and 33.4 percent (from 32.4 percent), respectively.
The improvement in confidence among consumers is attributed to their expectations of: (1) more available jobs, (2) additional income, (3) good governance, (4) effective government policies and programs by the new administration for agriculture, education, and economic recovery from COVID-19, and (5) the provision of pension and financial assistance.
The more pessimistic consumer outlook in the third quarter was reflected across the three component indicators of consumer confidence, with the family financial situation recording the lowest CI, followed by economic condition and family income.
Consistent with the national trend, consumer confidence across all income groups (low-, middle- and high-income groups) also weakened in the third quarter.
Aside from the reasons previously cited for the more pessimistic outlook in the third quarter, high-income consumers were also worried about the continuing public health risk posed by the COVID-19 pandemic and its possible adverse impact on the economy.
By geographical location, the consumer confidence in both the National Capital Region (NCR) and Areas Outside the NCR (AONCR) was more pessimistic in the third quarter, which is consistent with the national trend. In addition to the reasons earlier cited by consumers for their more pessimistic outlook in the third quarter, respondents in AONCR attributed their weaker confidence to their concerns over the ongoing travel and social gathering restrictions and the uptick in the country’s COVID-19 caseload.
The percentage of households in the country that considered third quarter as a favorable time to buy big-ticket items fell to 14 percent from 15.2 percent in the second quarter.
In the third quarter, the percentage of households with savings in the nation declined to 27.5 percent from 29.7 percent in the second quarter.
Consumers anticipated that interest rates may increase, the peso may depreciate against the US dollar, and the unemployment rate may decline in the third and fourth quarter and the next 12 months.
Households also expected that the rate of increase in the prices of consumer goods and services may rise in the third quarter and for the fourth quarter. This stemmed from their concerns over: (1) higher household spending for food, utilities and other commodities, (2) limited supply of goods and services, and (3) depreciation of the peso against the US dollar.
However, households expected that inflation rate may ease for the next 12 months due to the following factors: (1) effective government policies and programs, (2) sufficient supply of goods and services, (3) lower household spending on food, (4) appreciation of the peso, and (5) positive developments in the COVID-19 situation.
In particular, consumers expected that the inflation rate may settle slightly above the upper end of the government's inflation target range of 2 to 4 percent for 2022 and 2023 ? at 4.1 percent for the next 12 months.
In the third quarter, 24.9 percent availed of a loan in the last 12 months, slightly higher than the 24.7 percent recorded in the second quarter.
The third quarter CES was conducted during the period 1 to 13 July 2022. In the third quarter CES, 5,546 households were surveyed ? 2,806 (50.6 percent) were from the NCR and 2,740 (49.4 percent) from AONCR. BSP
