BSP: Consumer outlook up in third quarter

MANILA, Philippines - Consumers’ outlook on the economy improved in the third quarter of the year on the back of improving global conditions, declining inflation, easing interest rates and a relatively stable peso, results of the Bangko Sentral ng Pilipinas (BSP) Consumer Expectations Survey showed.

The overall consumer confidence index improved to -31.9 percent in the third quarter of 2009 from -34.2 percent in the previous quarter and from -52.8 percent a year ago, according to the survey, which was conducted from July 1 to 15 among 5,315 households.

The overall consumer confidence index (CI) is determined by the average of three factors – outlook on macroeconomic conditions, family financial situation and family income.

Among the income groups, the high- and middle-income groups were the most upbeat about their financial condition.

The optimism of these groups on their family income reflected in a CI of 26.6 percent while their optimism on their family financial situation had a CI at 14.8 percent.

The BSP said these were the highest recorded indices since it started conducting the Consumers Expectations Survey in 2007.

The sentiment of middle-income consumers also improved to 2.5 percent from -1.1 percent registered in the second quarter of the year and from -12.8 percent in the third quarter of 2008.

On the other hand, consumer confidence in the low-income group on the country’s economic condition and on their own financial condition was broadly unchanged quarter-on-quarter but more favorable year-on-year.

In terms of household expenditures, survey results showed that households nationwide anticipate a rise in their expenditures on basic goods and services in the fourth quarter of the year, with a CI at 43.4 percent.

“However, fewer respondents said that their expenditures would rise compared to the previous quarter’s survey results as prices of basic goods and services were expected to stabilize in the next twelve months,” the BSP said.

According to the survey, the CI on expenditures for the fourth quarter slid from 44.4 percent in the previous quarter’s survey and from 56.9 percent a year ago.

Along with the expected improvement in expenditures, consumers also expect buying conditions to improve in the third quarter.

The BSP said that the percentage of respondents that considered the third quarter as a favorable time to buy big-ticket items such as motor vehicles and consumer durables increased to 18 percent from 15.8 percent in the second quarter.

BSP Deputy Governor Diwa Guinigundo said that consumers’ expected increase in expenditures in the third quarter also indicated that the expenditure component in the National Income Accounts would also increase.

As for the expenditures of overseas Filipino workers, the survey results showed that out of the 486 OFW households that received remittances in the third quarter of 2009, 93.4 percent spent part of their remittances for food and other household needs, 71.8 percent used their remittances for education expenses, 63.2 percent for medical expenses and 50 percent for debt payments.