MANILA, Philippines - Filipino consumers turned less optimistic in the first quarter of the year after the confidence index soared to an all-time high in the fourth quarter of 2016, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
Teresita Deveza, deputy director of the BSP’s Department of Economic Statistics (DES), said Filipino consumers are less optimistic for the second quarter and the confidence index slipped to 16.5 percent from 18.8 percent in the previous quarter.
She said respondents of the survey conducted between Jan. 19 and 31 showed a less upbeat outlook also for the next quarter due to higher prices of goods, the weakening of the peso against the dollar, poor harvest due to bad weather conditions, and the slowdown in business activity.
The country’s stock market has nose-dived while the peso depreciated heavily against the US dollar even touching a fresh 10-year low of 50.40 to $1 level due to the normalization of interest rates in the US as well as the uncertainties about the policies of US President Donald Trump.
BSP Deputy Governor Diwa Guinigundo said results of the 1st Quarter Consumer Expectation Survey (CES) showed the consumer confidence index (CI) slipped to 8.7 percent in the first quarter from a record level of 9.2 percent in the fourth quarter of last year.
“Despite the modest decline in the CI, consumer confidence remained positive, registering the second highest reading since the start of the survey in the first quarter of 2007,” he said.
The CI has been in negative territory since the CES was launched in the first quarter of 2007 until it turned positive at 2.5 percent in the third quarter of last year.
Guinigundo said the relative steady outlook in the first quarter stemmed from the counterbalancing of the number of respondents who reported more positive views on the economy.
According to Guinigundo, the reasons behind the decline in optimism in the first quarter include higher prices of goods and household expenditures, poor harvest as well as unfavorable weather conditions.
He said consumers remained optimistic due to improvements in the peace and order situation as well as additional family income due to higher salary and stronger business activity.
He also cited the availability of more jobs and increase in the number of employed family members as well as the effective policies under the Duterte administration.
Consumer confidence is measured by indicators including economic condition, family financial situation, and family income all posted record levels.
The country’s gross domestic product (GDP) growth accelerated to 6.8 percent last year from 5.9 percent in 2015 due to robust domestic demand amid higher election related spending as well as higher investments.
On the other hand, inflation averaged 1.8 percent last year, below the two to four percent target set by the BSP.
However, the consumer price index (CPI) kicked up to a 27-month high of 3.3 percent in February from 2.7 percent in January due to higher food and oil prices as well as more expensive power rates.