By Komfie Manalo
The Bangko Sentral ng Pilipinas said Friday that consumers will remain upbeat over the next 12 months, reversing the current pessimistic sentiment over inflation, job security, and other issues.
In a virtual briefing, BSP Monetary Policy Sub-Sector officer-in-charge Redentor Paolo Alegre Jr. said results of the second quarter 2024 Consumer Expectations Survey (CES) and Business Expectations Survey (BES) showed that the overall confidence index (CI) for the next 12 months was at 13.5%, slightly higher than the 13.4% CI recorded in the first quarter survey results.
"Consumers expect higher inflation, interest and unemployment rates, and a weaker peso for all reference periods," Alegre said.
However, the BSP said consumer sentiment was more pessimistic for Q2 2024 as the overall confidence index became more negative at -20.5% from -10.9% in Q1 2024.
"The decline in the index reflects the increase in the percentage of pessimists, which outweighed the increase in the percentage of optimists. The weaker confidence among consumers was mainly due to their concerns over the (a) faster increase in the prices of goods and higher household expenses, (b) lower income, (c) fewer available jobs, and (d) the effectiveness of government policies and programs on inflation management, traffic and public transportation, provision of financial assistance, and labor and employment," the BSP survey stated.
Alegre said the CI also turned negative for the third quarter at -0.4 percent from 2.7 percent in the first quarter.
Business expectations
Alegre said business sentiment in the Philippines turned less upbeat in the year's second quarter, as the overall CI slightly fell to 32.1 percent from 33.1 percent in the first quarter.
Alegre attributed the decline in business confidence mainly to the firms' concerns over a softer demand for goods and services such as personal care, health and other consumer products, construction supplies, city hotels and restaurants, and workforce services, ongoing international conflicts that may push oil prices higher, the slowdown in business activity due to El Niño-induced extreme weather conditions, and persistent inflationary pressures that may weigh down consumer spending.
For the third quarter, the country's business confidence weakened, as the overall CI fell to 43.7 percent from 48.1 percent in the previous survey.
The business outlook for the next 12 months was similarly less upbeat as the overall CI decreased to 56.5 percent from 60.8 percent in the first quarter.
The firms' less optimistic outlook for the next 12 months was attributed primarily to their expectations of weaker demand for products and services such as hardware and construction supplies, poultry, dining, and leisure trips, stiff domestic and foreign competition, the possible escalation of the ongoing conflicts in Gaza and Ukraine, and persistent price pressures from higher food prices.