Consumer sentiment weakens in Q4

MANILA, Philippines — Filipino consumers turned less optimistic in the fourth quarter on the back of higher prices of commodities, low or no increase in salary or income, increase in household expenses, and high unemployment rate, according to the Bangko Sentral ng Pilipinas.

Based on the results of the fourth quarter Consumer Expectations Survey (CES) conducted by the BSP, the consumer confidence index fell to 1.3 percent in the fourth quarter from the previous quarter’s 4.6 percent.

Fernando Salvoza, officer-in-charge of the central bank’s Department of Economic Statistics (DES), said the lower, but still positive confidence index was reflective of the combined decline in the percentage of optimists and increase in the percentage of pessimists compared to third quarter survey results.

Salvoza said a decline in the quarter-on-quarter consumer sentiment was observed for the fourth quarter across the three component indicators of consumer confidence, namely, the economic condition, family financial situation and family income.

Meanwhile, consumer sentiment across component indicators was generally steady for the first quarter of next year compared to the fourth quarter.

For the next 12 months, Salvoza said respondents’ outlook on economic condition of the country and family financial situation was less favorable, while family income remained broadly steady.

Consumer outlook across income groups weakened in the fourth quarter led by the middle-income group with the highest drop in the quarter-on-quarter confidence index, followed by the high- and low-income groups.

Aside from the reasons cited by the consumers’ less optimistic outlook for the fourth quarter, the consumer confidence for high-income group, in particular, was less favorable due to expectations of peace and order challenges.

For first quarter of 2020, the sentiment of consumers across income groups was mixed.

“Consumer confidence of the high-income group was broadly steady, low-income group was less optimistic, while that of the middle-income group was more upbeat,” he said.

Meanwhile, Salvoza said consumer outlook for the next 12 months was less optimistic as the confidence index decreased to 26.4 percent from the third quarter 2019 survey result of 29.8 percent.

Similar to the fourth quarter, the lower confidence index for the first quarter of 2020 and the next 12 months stemmed from households’ anticipation of higher prices of commodities, no or low increase in salary/income, high unemployment rate, and increase in household expenses.