Nationwide consumer outlook improves
The outlook of consumers nationwide improved in Q3 2009, buoyed by recent news indicating improving global economic conditions and stronger domestic macroeconomic fundamentals (i.e., declining inflation, easing interest rates, and the relatively stable peso). The improvement in outlook is shown by the nationwide consumer confidence index (CI) which increased to -31.9 percent in Q3 2009 from -34.2 percent in the previous quarter and from -52.8 percent a year ago. This suggested that the number of respondents with positive outlook increased even as optimists continued to be outnumbered by pessimists.
Nationwide consumer expectations for the next quarter and the next 12 months were also better compared to survey results a quarter and a year ago. Consumers were less pessimistic for the next quarter as the CI, while remaining in the negative territory at -3.7 percent, improved compared to -13.2 percent in Q2 2009 and -25.1 percent in Q3 2008. Similarly, the CI for the next 12 months at -0.9 percent (indicating that the number of optimists was almost equal to the number of pessimists) was better than the past quarter and year ago survey results of -7.6 percent and -23.9 percent, respectively.
High-income group is the most upbeat about their own financial condition
Consumer sentiment was upbeat in the high- and middle-income groups in Q3 2009. The optimism of respondents from the high-income group on their family income (CI at 26.6 percent) and family financial situation (CI at 14.8 percent) was at their highest since the nationwide survey was started in Q1 2007, given their brighter outlook on business conditions and job prospects for the quarter.
Respondents from the middle-income group turned bullish about their income expectations in Q3 2009, with the CI at 2.5 percent from -1.1 percent in Q2 2009 and -12.8 percent in Q3 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.
Household expenditures are expected to rise in Q4 2009
Households nationwide anticipated a rise in their expenditures on basic goods and services in Q4 2009, with 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 12 months. The CI on expenditures for the next quarter slid from 44.4 percent in the previous quarter's survey and from 56.9 percent a year ago.
Buying conditions are more favorable in Q3 2009
The percentage of respondents that considered Q3 2009 as a favorable time to buy big-ticket items consumer durables, motor vehicles, and housing increased to 18.0 percent from 15.8 percent in Q2 2009. The improvement was driven largely by the favorable sentiments of AONCR consumers on buying conditions for all big-ticket items, particularly for the purchase of house and lot which increased to 24.4 percent from 20.0 percent in Q2 2009.
Among the reasons cited by respondents who considered buying conditions to be favorable in Q3 2009 were that these purchases were good investments and were affordable.
Buying intentions for the year ahead improve
The positive outlook of consumers on buying conditions for big-ticket items for Q3 2009 spilled over to the next 12 months. The percentage of respondents that signified intentions to buy big-ticket items in the year ahead stood at 9.5 percent, higher than 7.5 percent in Q2 2009 and 6.0 percent in Q3 2008.
Selected Economic Indicators: Outlook for the next 12 months
Broadly the same number of respondents expected that the prices of basic goods and services would go up in the next 12 months, while inflation was expected to remain steady as well as stabilize at 8.6 percent.
Consumers anticipated that the peso would depreciate against the US dollar in the year ahead. However, fewer respondents carried this view as the CI on the exchange rate in Q3 2009 was lower at -13.2 percent compared to -21.8 percent in the previous quarter and -29.7 percent a year ago.
Unemployment and interest rates were expected to increase (with CIs at 65.1 percent and 46.5 percent, respectively), but the number of respondents who anticipated an increase in the unemployment rate declined and those who anticipated a rise in interest rates was broadly the same quarter-on-quarter.
Expenditures of Overseas Filipino Workers in Q3 2009
Out of the 486 OFW households that received remittances in Q3 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 50.0 percent for debt payments. The percentage of OFW households that utilized remittances to purchase consumer durables and motor vehicles was broadly steady at 26.5 percent and 6.8 percent, respectively. Those that apportioned part of their remittances to amortization or full payment for houses purchased expanded to 12.1 percent (from 10.8 percent in the previous quarter).
Meanwhile, the percentage of households that allotted portions of remittances to savings improved to 39.9 percent (from 38.3 percent in Q2 2009), while the percentage that devoted a part to investment slightly contracted to 7.6 percent in Q3 2009 (from 8.3 percent in Q2 2009).
About the survey
The Bangko Sentral ng Pilipinas started conducting the Consumer Expectations Survey (CES) in the National Capital Region in Q3 2004. The CES became a nationwide survey beginning Q1 2007. For Q3 2009, the CES was conducted during the period 1-15 July 2009 with a total sample size of 5,315 households, of which 2,717 (51.1 percent) were from the NCR and 2,598 (48.9 percent) from the AONCR. The CES samples were drawn from the National Statistics Office's (NSO) Master Sample List of Households, which is considered a representative sample of households nationwide. The said master sample was generated using a stratified multi-stage probability sampling scheme. The nationwide total survey response rate for Q3 2009 was 95.1 percent (from 96.1 percent in the last quarter's survey).
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