Consumer confidence rises in Q1 2012
Consumer sentiment improved in Q1 2012 as the overall confidence index (CI) increased to -14.7 percent from -20.6 percent in Q4 2011 and -23.1 percent a year ago. This indicates that consumer demand is expected to remain strong and will continue to help fuel economic growth during the first quarter of the year. The CI 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.
Respondents cited the following factors for their more favorable outlook: (a) more jobs available; (b) increase in the number of employed family members; (c) increases in salary; (d) government policies on good governance; (e) improved peace and order; (f) sustained investment inflows; and (g) appreciation of the peso. For the next quarter, consumer confidence remained steady, with the CI at 2.8 percent. However, amid continued increases in the prices of oil products, the outlook for the year ahead weakened but remained positive, with the CI at 11.9 percent from 14.6 percent a quarter ago. The likelihood of a continued rise in oil prices and its impact on consumers’ income topped respondents’ concerns for the rest of the year.
Consumer confidence on the economy, family finances and income improves in Q1 2012
The three component indicators of consumer confidence─consumer sentiment on the country’s economic condition, family financial situation and family income─improved as respondents anticipated increased employment opportunities and stronger business activity during the quarter.
The outlook across all income groups likewise improves in Q1 2012
The improvement in consumer confidence was broad based as the outlook of households across all income groups was more favorable in the current quarter and broadly steady for the next quarter. For the year ahead, however, the more buoyant outlook of respondent households from the high-income group was outweighed by the less optimistic sentiment of the low- and middle-income groups.
Spending outlook on basic goods and services is less buoyant in Q2 2012
Fewer households expected their expenditures on goods and services to go up in Q2 2012 relative to the last quarter’s survey as respondents expected overall inflation to slow down over the course of the next 12 months, in spite of the anticipated rise in oil prices. The spending outlook decreased for all basic commodities.
Outlook on buying conditions for big ticket items is less optimistic quarter- on- quarter but higher year -on- year
Respondents considered the current quarter as a favorable time to buy big-ticket items. However, the number of respondents who said so declined compared to that of a quarter ago due primarily to the less upbeat sentiment of AONCR respondents who prioritized spending on food and other basic needs of the family over consumer durables, house and lot, and motor vehicles. On the other hand, NCR respondents were of the view that the current quarter is a favorable time to buy real estate for investment, motor vehicles for income generation and family use, as well as consumer durables. Relative to a year ago, buying conditions on big-ticket items improved at the national level. Similarly, buying intentions for consumer durables, real estate and motor vehicles for the year ahead remained positive but declined compared to Q4 2011.
Consumer perception on inflation improves while outlook on interest rates and employment remain steady
Despite respondents’ concern over the possibility of continued increases in fuel prices, their inflation expectations over the next 12 months declined to 8.3 percent from 9.6 percent in Q1 2012. This indicates that the subdued inflation readings in January-February 2012 could persist throughout the year. Expectations of slow growth in global economic activity were seen to temper the rise in commodity prices in the international as well as domestic markets.
More respondents expected the peso to depreciate compared with a broadly steady exchange rate outlook in the previous quarter’s survey. Meanwhile, respondents’ outlook on interest rates remained steady while employment conditions were likewise expected to be broadly stable during the same period.
OFW households utilize their remittances primarily for food, education, medical expenses, and debt payments
Of the 589 households that received Overseas Filipino Workers (OFW) remittances in Q1 2012, 95.6 percent used remittances for food. More than sixty percent of the households (66.1 percent) surveyed allocated part of their remittances for education, 60.1 percent for medical payments and 48.9 percent for debt payments. The percentage of OFW households that apportioned part of their remittances for the purchase of house and lot, debt payment, and investment went up compared to the previous quarter’s results. Households that utilized their remittances for savings, food expenditures and purchase of motor vehicle remained broadly steady.
About the survey
The Bangko Sentral ng Pilipinas expanded the Consumer Expectations Survey (CES) into a nationwide survey beginning Q1 2007. Earlier, the survey was conducted only in the NCR (survey started in Q3 2004). 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. For Q1 2012, the CES was conducted during the period 23 January – 8 February 2012 in all regions of the Philippines, except for ARMM, with a total sample size of 5,978 households, of which 3,012 (50.4 percent) were from the NCR and 2,966 (49.6 percent) from the AONCR.
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