Consumer confidence improves in fourth quarter

MANILA, Philippines - The number of pessimistic Filipinos continued to decline under the six-month old Aquino administration as the overall consumer confidence index improved for the second consecutive quarter, a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

BSP Deputy Governor Diwa Guinigundo said in a press conference that the Fourth Quarter 2010 Consumer Expectations Survey showed an improved consumer confidence index of -8.5 percent in the fourth quarter from -14 percent in the third quarter.

Guinigundo said this was the highest reading recorded since the nationwide Consumer Expectations Survey started in 2007. “While it remains negative it is now less negative,” he stressed.

He added that this was also the second consecutive quarter that the consumer confidence index improved to   -8.5 percent in the fourth quarter from 14 percent in the third quarter from    -28.7 percent in the second quarter despite the onset of the Christmas season.

He pointed out that Filipino consumers usually turn more pessimistic in the fourth quarter of every year except this year and in 2008 due to higher spending for the Christmas season including food for the “noche buena,” gifts for their loved ones, among others. “The holiday season means more expenses,” he said.

Data showed that overall consumer confidence index for the next three months declined to 11.9 percent in the fourth quarter from a record level of 15.3 percent in the third quarter while that for the next 12 months likewise fell to 25.9 percent from the record 33.4 percent.

For her part, BSP’s Department of Economic Statistics (DES) director Rosabel Guerrero said the confidence index for the current quarter stayed in the negative territory as pessimists outnumbered the optimists especially those in the low income grup who attributed their unfavorable sentiment to lack of employment and insufficient income.

The survey conducted from Oct. 1 to Oct. 15 covered 5,833 respondent in the National Capital Region as well as Areas Outside NCR. About 54.3 percent of the total respondents belonged to the low-income group or those earning less than P10,000 while 36.9 percent belonged to the middle-income group or those earning between P10,000 and P29,999.

Guerrero pointed out that Filipinos are more optimistic as the country’s domestic output as measured by the gross domestic product (GDP) continued to exceed the expected growth of between five percent and six percent this year.

“The sustained rise in consumer confidence was supported by the better-than-expected GDP growth forecast for the first three quarters of the year at 7.5 percent, which exceeds the full-year government forecast of five percent to six percent,” she added.

Latest data showed that the country’s GDP posted a stronger-than-expected growth of 7.5 percent in the first three quarters of the year from 0.7 percent in the same period last year. GDP expansion eased to 6.5 percent in the third quarter from 8.2 percent in the second quarter and 7.8 percent in the first quarter of the year.

She explained that consumer optimism on the economic condition of the country, family income and family situation were at record highs indicating that respondents expect increased family income and finances.

“Reflecting the overall consumer outlook in the near term and the year ahead, consumer confidence across all three indicators for the next quarter and the next 12 months remained positive at double digit levels, but were also less favorable compared to the previous quarter’s survey results,” Guerrero explained.

According to her, the favorable outlook of the repondents was due to expectations of better job opportunities, new investments, higher income, good governance, and a low rate of inflation.