MANILA, Philippines - Consumer confidence weakened further in the third quarter of the year, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
In the latest round of its Consumer Expectations Survey, the BSP said the confidence index dropped to -7.9 percent in the third quarter from -5.7 percent in the second quarter.
The BSP blamed the weak confidence level on low harvest, the absence of permanent work and the downturn in some businesses.
“Consumer sentiment slightly weakened due to factors such as poor harvest, absence of permanent work, downturn in some businesses and higher household expenditure,†Department of Economic Statistics director Rosabel B. Guerro said.
The index is arrived at by taking the difference between respondents who answered in the positive and those in the negative. As such, positive responses outnumbering negative ones would mean consumer optimism, while the reverse would indicate pessimism.
Guerrero said despite the decline in the index, it was still the second highest reading since the BSP started the survey in 2007.
The bearish consumer outlook in the country mirrored weaker sentiment in Japan, Indonesia, Taiwan and Thailand. It was, however, the reverse of a more upbeat consumer confidence in Australia, Germany and China.
Guerrero said that the number of households with savings increased in the third quarter, as consumers in the previous quarter were weighed down by education expenses.
The survey showed the number of households with savings went up to 24.5 percent from 22.4 percent while respondents with bank deposit accounts were also up as well as those who keep their money at home, or put funds in cooperatives, paluwagan, and other credit or loan associations.
In contrast, respondents expect spending on basic goods and services to remain steady, while expenditure on big-ticket items such as motor vehicles and housing was upbeat.
“The favorable outlook on buying big-ticket items was due to perception that properties are good investments, consumer durables provide family convenience and motor vehicles can be utilized for business and personal use,†Guerrero said.
For the next quarter, the consumer confidence index turned favorable to 5.7 percent from 4.1 percent.
“(This is) in anticipation of the availability of more jobs as well as more working family members, increased investments, additional incomes, and monetary benefits during the holiday season,†Guerrero said.
BSP Deputy Governor Diwa C. Guinigundo, at the same briefing, stressed more Filipinos still plan to spend during the quarter despite the weakened consumer outlook.
“While it’s true that the composite index for the current quarter declined from -5.7 to -7.9, the buying appetite of consumers continued to be robust and this is on the basis of their responses with respect to the amount of expenditure for the next quarter,†Guinigundo said.
The latest survey was conducted from July 1 to 12 and covered 5,763 households with a response rate of 98.1 percent.