Consumer sentiment remained negative, but less so, while business optimism improved in the fourth quarter, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
Results of the central bank's latest consumer and business expectations survey placed the consumer confidence index (CI) at -11.1 percent for October-December, improving from -15.6 percent three months earlier.
The CI for businesses, meanwhile, rose to 44.5 percent from 32.9 percent in July-September.
Consumer sentiment for the quarter and year ahead also improved, to 4.2 percent and 12.4 percent, respectively, from 0.7 percent and 9.9 percent in the earlier survey.
Business confidence, however, fell for the first quarter of 2025 and the full year, to 40.3 percent and 56.4 percent from the quarter- and year-ahead 56.8 percent and 58.0 percent in the third-quarter poll.
A positive CI means that optimists outnumber pessimists. The reverse applies with regard to negative results.
Factors cited
The less pessimistic consumer confidence for the fourth quarter was said to have stemmed from expectations of higher and additional sources of income, more working family members and more available jobs and permanent employment.
Business sentiment, meanwhile, was boosted by expectations of higher demand for certain goods and services, and a seasonal uptick in business activities.
For the next quarter and the next 12 months, consumers said they expected higher income, additional sources of income and more available jobs.
A post-holiday decline in demand, stiff competition here and abroad, increased uncertainty leading to the May 2025 midterm elections, a weaker peso and higher production costs were tagged as having pulled down quarter-ahead business confidence.
For the next 12 months, the lower business sentiment was said to be due to concerns over weaker demand, the impact of escalating geopolitical tensions, domestic and foreign competition, and inflation rising anew.
Consumer findings
With regard to the country's economic condition and family financial situation and family income, consumers were also less pessimistic in the fourth quarter: -24.2 percent from -30.7 percent, -9.0 percent from -11.12 percent and -0.1 percent from -4.7 percent.
Results for next quarter also improved to -3.1 percent from -5.8 percent for the country's economic condition, 5.4 percent from 1.8 percent for family financial situation and 10.3 percent from 6.1 percent for family income.
Consumers turned optimistic for the next 12 months and the outlooks all rose for the country's economic outlook (6.9 percent from 2.9 percent), family financial situation (14.4 percent from 11.6 percent) and family income (16.0 percent from 15.3 percent).
Confidence in purchasing big-ticket items remained firmly negative, but improved slightly with the confidence index for such items hitting -67.3 percent from -68.9 percent three months earlier.
The percentage of households with savings, however, declined to 25.6 percent from 29.0 percent, and the proportion of households with loans was unchanged at 25.5 percent.
Industry outlooks
As for businesses, fourth-quarter sentiment was less upbeat in the construction sector (35.6 percent from 37. 6 percent), but more positive in services (52.9 percent from 36.7 percent), wholesale and retail (42.5 percent from 32.3 percent) and industry (34.5 percent from 26.0 percent).
Firms said they expected easier cash flow and credit access in the last three months of 2024, with the financial condition index improving and the credit access index returning to positive territory.
Businesses also said the peso would strengthen and that borrowing rates would rise in the next quarter and over the next 12 months.
Inflation expectations for 2025 appear to be easing, the BSP said, as fewer businesses predicted rising inflation compared to the previous survey.
Consumer price growth was projected to average 3.6 percent in the fourth quarter and 3.7 percent in the first three months of 2025 and the year ahead.
Consumers, meanwhile, expect higher interest rates, a weaker peso and higher unemployment in the coming months.
They said that inflation would average 6.2 percent in the next 12 months, higher than the business outlook and above the BSP target.
The central bank said that like businesses, fewer consumers said that prices would rise compared to the previous quarter.
Source: Manila Times