Consumer sentiment is less pessimistic in first quarter, but less optimistic for second quarter and next 12 months: BSP
Consumer sentiment improved in the first quarter as the overall confidence index (CI) became less negative at -10.9 percent from -19 percent in the fourth quarter of 2023.
This improvement means that although the pessimists continued to outnumber the optimists, the number of pessimists declined compared to the fourth quarter 2023 survey results.
According to the respondents, their improved outlook in the first quarter was brought about by their expectations of: (a) additional and higher income, (b) availability of more jobs and permanent employment, and (c) additional working family members.
Consumer sentiment was less optimistic for the second quarter and the next 12 months (February 2024 ? January 2025) as the CIs declined to 2.7 percent and 13.4 percent from 5.6 percent and 15 percent, respectively, in the fourth quarter of 2023 survey round.
The weaker outlook of consumers for both periods was attributed to their anticipation of: (a) faster increase in the prices of goods, (b) fewer available jobs, and (c) lower income.
Consumers were less pessimistic with respect to the country’s economic condition and the family’s financial situation in the first quarter while their pessimistic outlook for family income was little changed.
For second quarter and the next 12 months, consumer outlook was less favorable across all three component indicators.
Consumer confidence in the first quarter was less pessimistic across all income groups, i.e., low-, middle-, and high-income groups. For the second quarter, consumer sentiment was less upbeat among the middle- and high-income groups, while sentiment in the low-income group turned pessimistic compared with the fourth quarter of 2023 survey results.
For the next 12 months, sentiment was less buoyant for the low-income group and remained optimistic among the middle- and high-income groups.
The consumer sentiment on buying big-ticket items in the first quarter was less pessimistic as the CI became less negative at -62.6 percent from -71.3 percent in fourth quarter of 2023.
Similarly, the buying sentiment on big-ticket items for the next 12 months was less pessimistic as the CI became less negative at -69.8 percent from -70.9 percent in the fourth quarter of 2023.
The first quarter survey results showed that 24.9 percent of households availed of a loan in the last 12 months, higher than the 22.9 percent recorded in the fourth quarter of 2023.
Further, the percentage of households with savings increased to 33.5 percent in the first quarter (from 29.1 percent in the fourth quarter of 2023).
Consumers anticipate that the interest rate may increase, and the peso may depreciate against the US dollar for first quarter, second quarter, and the next 12 months.
Meanwhile, households expect that the unemployment rate may rise albeit at a slower pace in the first and second quarter but may decline in the next 12 months. Households also expect that the inflation rate may rise for all reference periods.
Specifically, consumers are expecting that the inflation rate may average at 5.3 percent for the next 12 months, which is above the upper end of the National Government's inflation target range of 2 to 4 percent for 2024-2025. BSP
