Consumer optimism up on change in leaders

MANILA, Philippines - Consumers have received with optimism the change in the country’s leadership, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

According to the latest BSP Consumer Expectations Survey, the consumer composite index (CI) went up to 26.6 percent for the next 12 months in the second quarter from 25.4 percent in the previous three months.

The CI is measured based on the number of optimists and pessimists surveyed.

“For the year ahead, consumers attributed their more optimistic outlook to the change in administration as well as the election of new government officials,” the BSP said in a statement.

This was reinforced by better outlook for peace and order as well as availability of more jobs in the country and abroad, it added.

The BSP survey, held from April 4 to 16, involved 5,754 households nationwide. It had a 96.1 percent response rate.

“This was actually the highest second quarter reading for the next 12 months on recorded. This is very positive,” BSP Deputy Governor Diwa Guinigundo told reporters in a briefing.

In the same quarter in 2010, the CI was at a lower 10 percent for the next year or during the time then presidential candidate Sen. Benigno Aquino III was leading unofficial polls.

But Guinigundo emphasized this could not be attributed to a particular administration since economic conditions were different back then.

“The economy is in a much stronger shape today compared to what we had in 2010. The additional six years after that further cements market confidence driven by the households,” he explained.

For this quarter, pessimists actually outnumbered optimists with -6.4 percent CI. While this has historically been the case for current quarter readings, the figure was worse than the -5.7 percent in the first three months.

For the next three months, CI reading of 5.6 percent was also down from 9.1 percent, data showed.

The reasons cited for the less sanguine outlook were poor harvests as a result of the El Ninno phenomenon and the impending La Niña, as well as higher expenses for education during enrolment period.

Nevertheless, Guinigundo said the positive outlook over the next year could indicate the economy – which grew by three-year high 6.9 percent in the first quarter – would continue to source strength from consumers.

Businesses also take their cue from consumers when embarking on expansion, BSP deputy director Teresita Deveza said in the same briefing.

“If housing conditions are not good, business conditions are not good. It’s really the household that is driving economic growth,” she said.

Guinigundo agreed. “That particular component of GDP (gross domestic product) growth will also continue to drive the actual second quarter real GDP growth,” he said.