Consumers remained pessimistic in the fourth quarter (Q4) due to elevated prices and lower salaries, a survey by the Bangko Sentral ng Pilipinas (BSP) showed.
The BSP confidence index (CI) among consumers decreased to 19% in the fourth quarter from a 9.6% contraction in the third quarter.
Rising prices, lower income, limited job opportunities, and doubts about the effectiveness of government policies on various economic aspects were the factors consumers attributed to their negative sentiment in the fourth quarter, the BSP said.
Consumers were more hesitant to buy big-ticket items in the fourth quarter this year, with the confidence index sliding to -71.3% from -62.7% in the third quarter.
“Consumer outlook is more pessimistic across the three component indicators and across income groups,” the BSP noted, adding that pessimism increased in low- and middle-income groups, while optimism turned into pessimism in the high-income group.
The BSP also observed a decrease in the percentage of households with loans and savings.
At the same time, the confidence index dropped to 5.6% for the first quarter of next year, down from the previous 7.8%.
Over the next 12 months, the index declined to 15% from 18.9%.
BUSINESS OPTIMISM
Meanwhile, the confidence index for businesses went up to 35.9% in the fourth quarter, up from 35.8% in the previous quarter.
The respondent companies were optimistic due to expectations of increased sales and production during the holidays, sustained economic recovery, business expansions in several sectors, development of new products and services, and expectations of robust consumer spending.
“However, the current quarter’s consumer index was tempered by concerns of pessimistic firms over the negative economic impact of the ongoing conflicts in Gaza and Ukraine, elevated inflation, and higher interest rates,” the BSP said.
The nationwide consumer survey response rate for this quarter was slightly lower at 97.4% from 97.6% in the previous quarter, the central bank noted.
Meanwhile, the business survey response rate increased to 65.1% from 64.9%.
According to the central bank, it interviewed 5,398 households for the survey conducted from Oct. 2 to 13 and 1,548 business owners for the survey held from Oct. 5 to Nov. 14
Source: Business World
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