Philippines | Consumer sentiment weakens for first quarter of 2018

APD NEWS

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By APD writer Melo M. Acuña

**MANILA, Mar.26 (APD) – **The Bangko Sentral ng Pilipinas reported today that consumer confidence weakened though it remained positive for the first quarter of 2018.

The overall confidence index (CI) declined to 1.7% from 9.5% for the fourth quarter of 2017.

“The lower but positive CI indicates that the number of optimists decreased but continued to outnumber the pessimists,” the BSP statement said.

The Consumer Sentiment is computed as the percentage of households that answered in the affirmative less the percentage of households that answered in the negative with respect to their views on a given indicator.

The less optimistic sentiment was brought about by the respondents’ expectations of higher prices of goods, low income and increase in household expenses.

They also cited concerns on increase in household debts, occurrence of natural calamities such as typhoons and other calamities as well as poor agricultural harvest.

Consumers believe such a situation would continue due to the anticipated

continued increase in prices of goods that would increase household spending as well as low earnings of the family.

“Consumer outlook also weakend across income groups for the current and next quarters and the year ahead because the low-income group turned more pessimistic while the middle- and high-income groups registered a positive but less upbeat outlook,” the BSP statement revealed.

The primary reason driving the weaker outlook across income groups was their expection of higher prices of goods while a secondary factor noted by low and middle-income groups was low family income/salary.

More respondents said they expect their expenditures of basic goods and services would go up for the second quarter of 2018 with increased spending on electricity, food, non-alcoholoic beverages, fuel, water and transportation which “indicate inflationary pressures could come from these goods and services.”

Fewer respondents indicated higher expenditures on clothing and footwear, medical care, communication and restaurants and cafes.

“The spending outlook was generally steady for house rent and furnishing, education, recreation and culture and personal care and effects,” the same statement revealed.

Meanwhile, 478 households included in the survey that received remittances from Overseas Filipino Workers (OFWs) for the first quarter of 2018, some 96.4 percent used the remittances to purchase food and other household needs.

The proportion of households that said so as well as those that allotted part of their remittances for debt payments (41.4 percent) savings (38.3 percent), investment (4.2 percent) and other miscellaneous expenses (2.7 percent) declined.

On the other hand, OFW households who allocated part of their remittances for education (69.5 percent), medical expenses (53.6 percent), purchase of consumer durables (24.1 percent), purchase of house (15.9 percent) and purchase of motor vehicle (8.6 percent) increased.

(ASIA PACIFIC DAILY)