MANILA, Philippines - Consumer confidence continued to weaken in the fourth quarter of the year, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
In its latest Consumer Expectations Survey, the BSP said the confidence index plunged to -21.3 percent in the fourth quarter from -7.9 percent in the previous quarter.
The BSP blamed the low confidence level on higher commodity prices, the pork barrel issue, and concerns over the peace and order situation in Mindanao.
“(This is due to) higher prices of commodities as adverse weather conditions resulted in poor harvests of palay, tuba, copra, coconut, fish and other sea products,†Rosabel B. Guerrero, director for the BSP’s Department of Economic Statistics, said in a briefing.
Guerrero added the sentiment was weighed down by Filipinos’ perception of “weak public governance particularly issues relating to the Philippine Development Assistance Fund (PDAF), and concerns over the peace and order situation in Mindanao.â€
Guerrero said the survey was done following Typhoon Santi in October and during the early days of the armed conflict in Zamboanga City.
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.
The confidence index for the first quarter of 2014 plunged to 2.8 percent from 14.1 percent, Guerrero noted.
“Consumers attributed their less optimistic outlook to expectations of lower income due to poor harvests and damages to crops and irrigation systems caused by poor weather conditions in October as well as to higher household spending during the holiday season and graduation events in the quarter ahead,†Guerrero said.
The overall consumer confidence is measured with three indicators: economic conditions of the country, family financial situation and family income.
Guerrero noted that consumers had a pessimistic view on the economic condition in the fourth quarter mainly due to the pork barrel issue and a weaker outlook on family finances and income.
However, the respondents had a more upbeat outlook on family finances and income in the next quarter despite seeing a weaker economy.
“For the year ahead, consumers remained optimistic based on the three measures of confidence even as their views on the country’s economy and their family finances turned less favorable. Consumers were most bullish on their family income,†Guerrero said.
The spending outlook for big-ticket items such as property and vehicles during the last quarter was broadly steady, Guerrero noted.
“The outlook on buying conditions was most upbeat for real estate, followed by consumer durables while a decline for motor vehicles was observed,†she said.