CEBU, Philippines - The behavior of Filipinos towards keeping some money for savings has improved in the fourth quarter of this year, based on the Consumer Expectation Survey conducted by the Bangko Sentral ng Pilipinas (BSP).
Survey results showed that the number of households with savings continued to increase in the fourth quarter of 2013. The increase in the percentage of surveyed households with savings was observed among the middle and low-income groups.
The percentage of respondents that expected to save money in the fourth quarter of this year edged higher to 34.6 percent from 32.4 percent in the previous quarter.
Four in the ten (40.4 percent) expected to save at least 10 percent of their income. The reasons for savings that were cited by the respondents include; emergency fund; health and hospitalization; retirement; business capital and investment (real estate) and education.
Among respondents with savings, majority have bank deposit accounts.
Meanwhile, the overall consumer confidence index (CI) fell to -21.3 percent from -7.9 percent in third quarter 2013.
Respondent household cited the following reasons for their bearish outlook in the current quarter-higher prices of commodities (rice and fish) as adverse weather conditions resulted in poor harvests of palay, copra, coconut, fish and other sea products; Weak public governance particularly issues relation to the Philippine Development Assistance Fund (PDAF); and concerns over the peace and order situation in Mindanao.
For the next quarter, and the year ahead, consumer sentiment remained favorable as the CI stayed in the positive territory although lower compared to the readings of the previous quarter.
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 2013 as well as to higher household spending during the holiday season and graduation events in the quarter ahead.
For the current quarter, respondents' outlook on the country's economic condition declined to 10-quarter low concerns over the PDAF issue while the outlook on the family finances and income weakened moderately.
For the next quarter ahead, the positive perception on family finances and income held steady while the outlook on the country's economic condition turned from positive to negative compared to the previous quarter's survey results.
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.
Significantly, the outlook on family finances and income declined among the middle and low-income groups in contrast to the more optimistic outlook of the high-income group.
With regard to their views on the economic conditions of the country, confidence declined across income groups. For the near term of the year ahead, the low-income group had higher optimism regarding their financial conditions, while high-income group continued to have a favorable outlook on both their family finances and income.
The confidence of economic condition of the country across income groups was carried to the next quarter and the year ahead.
The percentage of respondents that considered the current quarter as a favorable time to buy big-ticket items was broadly steady.
The outlook on buying conditions was most upbeat for real estate, followed by consumer durables while a decline for motor vehicles was observed.
Respondents considered real property to be a good investment. They also considered stepping up their purchases of consumer durables, particularly for entertainment and convenience.
Buying intentions for the year ahead turned upbeat for all big-ticket items, consistent with the expected improvement in family income across income groups for next year. (FREEMAN)