Pinoy new year optimism hits 15-year low

Most Filipinos remain hopeful for the coming year, but pollster Social Weather Stations (SWS) noted that expectations ahead of 2025 are the lowest in 15 years.

The survey, conducted from Dec. 12 to 18, found that 90 percent of Filipinos are entering the new year with hope rather than fear.

While the number remains high, it was six points below the 96 percent obtained in a similar survey in 2023.

SWS said it was the lowest since the end of 2009, when 89 percent said they were entering the new year with hope.

In 2020, at the height of the COVID-19 pandemic, 91 percent of the survey respondents said they were entering the new year with hope.

Meanwhile, 10 percent said they are entering 2025 with fear, up by seven points from three percent in 2023. It was the highest since the 11 percent in 2009.

According to SWS, hope for the new year fell across all areas and educational attainment.

It was highest among those in balance Luzon at 92 percent (from 97 percent), followed by those in Metro Manila at 91 percent (from 97 percent), Mindanao at 89 percent (from 96 percent) and the Visayas at 87 percent (from 93 percent).

Hope for the new year was highest among college graduates at 96 percent, followed by those with some senior high school education at 93 percent (from 96 percent), junior high school graduates at 91 percent (from 96 percent), elementary graduates at 89 percent (from 97 percent) and non-elementary graduates at 83 percent (from 93 percent).

SWS said there was higher hope for the new year among those who expected a happy Christmas this year.

The survey had 2,160 adult respondents and a margin of error of plus/minus two percent.

Source: Philstar

Business, consumer sentiment worsens

Headwinds dampened both consumer and business sentiment in the second quarter, the Bangko Sentral ng Pilipinas (BSP) reported, and outlooks for the next three months also worsened.

Business confidence also weakened for the next 12 months, but that for consumers was marginally more bullish, results of a central bank survey showed.

The confidence index (CI) for confidence index for consumers worsened to -20.5 percent for the second quarter from -10.9 percent three months earlier. The business CI, meanwhile, declined to 32.1 percent from 33.1 percent.

A positive result means that optimists outnumber pessimists. The reverse applies with regard to negative CIs.

Weaker consumer confidence stemmed from concerns about rising prices, higher expenses, lower income, fewer jobs and doubts about government policies on inflation, traffic, transportation, aid and employment.

Business sentiment, meanwhile, declined due to concerns about weaker demand for goods and services, rising oil prices from international conflicts, reduced business activity from El Niño's extreme weather and persistent inflation affecting consumer spending.

The CI for consumers for the next three months turned negative at -0.4 percent from 2.7 percent. For the year ahead, however, the index picked up to 13.5 percent from 13.4 percent.

The pessimism for the next quarter stemmed from expectations of faster price increases, higher household expenses, lower income and fewer job opportunities.

For businesses, the CI for the third quarter and next year declined to 43.7 percent and 56.5 percent from 48.1 percent and 60.8 percent, respectively.

This was attributed to expected reduced demand for hardware, construction materials, food supplements and medical services, alongside higher inflation, the rainy season affecting operations, slower economic growth and impact from international conflicts.

Looking further ahead, the cautious business sentiment was said to be driven by weaker demand for hardware, construction supplies, poultry, dining and leisure activities, intense global competition, concerns over conflicts in Gaza and Ukraine, and ongoing pressure from rising food prices, notably rice.

With regard to the country's economic condition, family financial situation and family income, consumers were also less pessimistic in the second quarter: -38.8 percent from -22.9 percent, -17.1 percent from -6.5 percent and -3.5 percent from -3.2 percent, respectively.

Results for the third quarter also worsened with regard to the country's economic condition, family financial situation and family income: -7.7 percent from -4.3 percent, 1.4 percent from 5.4 percent and 5.2 percent from 7.0 percent, respectively.

For the year ahead, consumers are only worried about the country's economic condition, with the CI dropping to 3.7 percent from 6.7 percent.

Those for family financial situation and family income improved to 15.7 percent and 20.9 percent from 15.1 percent and 18.3 percent, respectively.

By business sector, meanwhile, second-quarter sentiment was less upbeat in construction (35.2 percent from 39.7 percent), services (36.5 percent from 29.1 percent), but rose for wholesale and retail (37.2 percent from 32.6 percent) and industry (30.3 percent from 26.4 percent).

"The business sentiment for Q3 2024 was less optimistic across all sectors, except for the wholesale and retail trade sector whose sentiment was more buoyant," the BSP said.

"Likewise, for the next 12 months, the outlook of businesses across all sectors was less upbeat, except for the construction sector whose outlook was more favorable for the said period," it added.

Firms anticipate a challenging financial environment and restricted credit access in the second quarter. Expectations included tighter cash positions and deteriorating financial conditions, along with continued limited access to credit.

They also expect the peso to weaken against the US dollar in the second and third quarters, but strengthen over the next 12 months.

Inflation and borrowing rates were seen rising in both quarters, along with stronger inflation expectations, and more firms predicted higher inflation compared to the first three months of 2024.

Company forecasts pointed to inflation rates of 4.3 percent in the second quarter and 4.4 percent in the next quarter, and 4.5 percent over the next 12 months, all surpassing the central bank's 2.0- to 4.0-percent target.

As for consumers, sentiment on buying big-ticket items was more pessimistic in the second quarter as the CI fell to -64.5 percent from -62.6 percent.

The percentage of households taking loans decreased slightly to 24.6 percent, down from 24.9 percent in the previous quarter, while households with savings also dropped to 31.4 percent from 33.5 percent.

Consumers expect unemployment to potentially rise and the peso to depreciate against the US dollar in the second and third quarter, and in the next 12 months.

Meanwhile, households anticipate a faster increase in interest rates in the second quarter, followed by a slower pace in the next three months and the subsequent 12 months.

Inflation is also expected to increase, albeit more moderately, reaching an average of 5.5 percent over the next year and also surpassing the BSP's target range.

Source: Manila Times

More Filipinos Want To Buy Houses

More Filipinos are looking to buy houses and other big-ticket items such as cars and appliances over the next 12 months as the country gradually recovers from the impact of the COVID-19 pandemic.

This is according to the Bangko Sentral ng Pilipinas third quarter Consumer Expectations Survey (CES).

BSP senior director Redentor Paolo Alegre Jr. said buying sentiment for big-ticket items for the third quarter and the next 12 months is now more buoyant.

The percentage of households that considered the third quarter as a favorable time to buy big-ticket items increased to 13.3 percent from 11.7 percent recorded a quarter ago, survey results showed.

“The more sanguine outlook on buying conditions in Q3 2021 was evident across the three big-ticket items, with the highest percentage on the purchase of a house and lot, followed by consumer durables and motor vehicles,” Alegre said.

Furthermore, Alegre said the percentage of households that consider the next 12 months as a favorable time to buy big-ticket items also rose to 4.1 percent from 3.6 percent.

“For the next 12 months, buying intentions for big-ticket items are more upbeat,” Alegre said.

The percentage of households that plan to buy or acquire real property within the next 12 months increased slightly to 3.2 percent from three percent the previous quarter.

Alegre attributed the higher percentage to the increase in the number of households that plan to acquire single detached houses to 42.6 percent from 38.7 percent;

duplexes to 7.9 percent from 1.6 percent; commercial lots to 7.3 percent from 2.1 percent; and apartments to 6.1 percent from 3.8 percent.

Majority or 74.3 percent of the household respondents indicated a cost limit of P450,000 for a house while 17.1 percent are looking for a cost above P450,000 to P1.7 million. The remaining 8.6 percent has a budget of more than P1.7 million.

OFW households

Households of OFWs raised their spending for food, education, and medical expenses due to the COVID-19 pandemic.

The survey was conducted from July 1 to 14, 2021 and covered 5,560 respondents.

As part of its COVID-19 response measures, the BSP slashed interest rates by 200 basis points last year to keep the economy afloat and lessen the burden on Filipino families. This brought the benchmark interest rate to an all-time low of two percent.

As more OFWs are being deployed with the reopening of the economies in host countries, the BSP is now expecting remittances to increase by six percent instead of four percent this year after slumping by 0.8 percent last year due to COVID-19.

Capital for business

Sarah Padilla of the BSP Economic and Financial Learning Office said families of OFWs back home should also take part by saving 10 percent or more of the money they receive from their loved ones abroad and use it as capital for business.

Source: Philstar and BSP