Consumer confidence improves for third and fourth quarter, less upbeat for the next 12 months
Consumer sentiment for the third quarter improved as the overall confidence index (CI) turned less negative at -15.6 percent from -20.5 percent in the Q2 2024 survey results.
This is reflective of the decrease in the percentage of pessimists, which outweighed the slight decrease in the percentage of optimists.
According to the respondents, their less pessimistic sentiment for the third quarter was attributed to expectations of: (a) higher income from wages/salaries, remittances, and other sources, (b) additional sources of income, (c) permanent employment and more available jobs, and (d) additional working family members.
For the next quarter, consumer outlook turned optimistic as the CI reverted to positive territory at 0.7 percent from -0.4 percent in the second quarter.
Meanwhile, the consumer confidence for the next 12 months was less optimistic as the CI declined to 9.9 percent from 13.5 percent in the second quarter.
For the third quarter, consumer sentiment improved across all component indicators and income groups. Across the three component indicators, consumer outlook for the third quarter was less pessimistic for the country’s economic condition and the family’s financial situation, and little changed for family income.
Consistent with the national trend, consumer confidence across income groups (i.e., low-income, middle-income, and high-income groups) was also less pessimistic for the third quarter.
Consumers are more hesitant about buying big-ticket items in the third quarter. The consumer sentiment on buying big-ticket items for the third quarter was more pessimistic as the CI turned more negative at -68.9 percent from -64.5 percent in the second quarter.
The percentage of households with savings declines, while those with loans Increases in the third quarter. For the third quarter, the percentage of households with savings decreased to 29 percent from 31.4 percent in the second quarter.
Meanwhile, about 25.5 percent of the households availed of a loan in the last 12 months, slightly higher than the 24.6 percent recorded in the second quarter.
Consumers expect higher interest rates, a weaker peso, and a higher unemployment rate for all reference periods. Consumers anticipate that interest rates may increase and the peso may depreciate against the U.S. dollar for the third and fourth quarter and the next 12 months.
Similarly, households expect that the unemployment rate may increase across all reference periods. Further, households also expect that inflation may increase at a faster rate for the rest of 2024 as the number of respondents who expected higher inflation increased compared with the second quarter survey results.
Specifically, consumers expect that the inflation rate may average at 5.9 percent for the next 12 months, which is above the National Government's inflation target range of 2 to 4 percent for 2024-2025. Bangko Sentral ng Pilipinas
