HOME  ABOUT THE BANK  MONETARY POLICY  BANKING SUPERVISION  PAYMENTS & SETTLEMENTS  STATISTICS  FEEDBACK CORNER
   BSP NOTES & COINS  MONETARY OPERATIONS  LOANS-CREDIT & ASSET MGT  PUBLICATIONS & RESEARCH  REGULATIONS  PROCUREMENT

Feedback Corner

Publications and Research

Media Releases

Consumer Confidence Hits All-Time High for Q3 2016

09.09.2016

Consumer sentiment posts highest reading with a positive index for Q3 2016

Consumer outlook improved for Q3 2016, as the overall confidence index (CI) turned positive and registered its highest reading at 2.5 percent from -6.4 percent for Q2 2016. This indicates that the optimists outnumbered the pessimists for the first time since the nationwide survey started in Q1 2007. 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. A positive CI indicates a favorable view, except for the inflation rate, the peso-borrowing rate, unemployment and change in prices, where a positive CI indicates the opposite. The overall consumer CI measures the average direction of change in three indicators - overall condition of the economy, family financial situation and family income.

According to respondents, their optimism during the current quarter was due to the following reasons: (a) improvements in the peace and order situation; (b) availability of more jobs; (c) stable prices of commodities; (d) anticipated increase in salaries; (e) effective government policies; (f) assumption into office of the new administration as well as its pronounced campaign against drugs; and (g) assistance from government such as the Pantawid Pamilyang Pilipino Program (4Ps).

The upbeat sentiment of consumers was more noticeable for the next quarter and the year ahead as the CI surged to 27.3 percent (from 5.6 percent a quarter ago) and 43.8 percent (from 26.6 percent in the previous quarter’s survey), respectively. Notably, record high CIs for consumer outlook for the next quarter and the year ahead were posted also since Q1 2007. Consumers anticipated that improvements in the peace and order situation, availability of more jobs, salary increases, and good governance would continue over the next 12 months.  They also expected possible decrease in prices of goods, lesser household expenses as well as an increase in household income and savings which could translate to growth in real income and higher purchasing power of the household.
 
Sifting through the three component indicators, consumer confidence on the country’s economic condition and family financial situation improved for Q3 2016, with the CIs for both indicators recording an all-time high at 9.5 percent and -2.2 percent, respectively, since Q1 2007.  Meanwhile, the outlook on family income was steady at 0.2 percent.  For the next quarter (Q4 2016) and the year ahead, consumers’ views on all three indicators turned more optimistic, posting the highest readings since Q1 2007. Consumer outlook on the country’s economic condition registered the biggest improvement among the three indicators for the current quarter, next quarter and the year ahead.  The optimism of consumers was similarly highly evident on the said indicator through the next 12 months as the CIs posted were the highest across component indicators.

By income group, the low-income group was more upbeat across the three indicators of consumer confidence for the current quarter while the high- and middle-income groups showed mixed outlook. For the near term and the year ahead, consumers were more optimistic across income groups in all three component indicators. Although the improvement in consumer outlook was observed across all income groups, it was driven primarily by the increase in confidence of the low-income group even as the high-income group remained to be the most optimistic.

Spending outlook on basic goods and services is lower for Q4 2016

The spending outlook index of households on basic goods and services remained positive but declined to a record low of 27.8 percent for Q4 2016 (from 30.2 percent in the previous quarter), as respondents expected inflation to decelerate over the next 12 months. The spending outlook index declined across commodity groups, except for clothing and footwear, medical care, and restaurants and cafes, which increased, as well as for house rent and furnishing, which remained steady. The biggest declines were observed for water, electricity, and transportation.

Respondents considered the current quarter as a favorable time to buy big-ticket items but the number that said so declined slightly to 28.2 percent from 28.9 percent. The outlook on buying conditions was almost unchanged for real estate and motor vehicles, but weakened for consumer durables. Buying intentions of respondents for all big-ticket items for the year ahead improved to 10.9 percent from 9.3 percent a quarter ago.

The percentage of households with savings moderates for Q3 2016

For Q3 2016, the percentage of households with savings declined slightly to 33.1 percent from 33.2 percent in the previous quarter. The percentage of households with savings increased in NCR but decreased moderately in AONCR. According to respondents, they save money for the following reasons: (a) emergencies, (b) education, (c) health and hospitalization, (d) retirement, and (e) business capital and investment. Nearly two-thirds (66.5 percent) of household savers had bank deposit accounts while 42.6 percent kept their savings at home and 27.2 percent put their money in cooperatives, paluwagan, other credit/loan associations, and as investment (e.g., stocks, insurance and mutual funds).

The percentage of respondents who reported that they could set aside money for savings during the current quarter rose to 41.6 percent (from 39.3 percent for Q2 2016). Likewise, the proportion of those that could set aside 10 percent or more of their monthly gross family income was higher at 40 percent (from 36.9 percent for Q2 2016).

Consumers expect inflation to remain low, interest rates to increase and the exchange rate to appreciate for the year ahead

Respondents anticipated inflation to decline to 1.8 percent from 3.4 percent based on the Q2 2016 survey results, reflecting their lower inflation outlook over the next 12 months. This indicates that inflationary expectations are likely to moderate over the next 12 months as the number of respondents with views of higher  inflation declined compared to a quarter ago. Meanwhile, fewer respondents expected interest rates to increase as the CI dropped to its record low for this quarter’s survey. Respondents are also of the view that the peso would continue to appreciate against the US dollar over the next 12 months. Meanwhile, the unemployment index moved to the negative territory at -27.8 percent from 22.6 percent for Q2 2016, the lowest reading since Q1 2007. The negative reading indicates that the number of unemployed persons are expected to decline over the next 12 months, which could translate to improved labor conditions.

OFW households  that  utilize their remittances for savings increase  for Q3 2016

Of the 500 households included in the survey that received OFW remittances for Q3 2016, 95 percent used the remittances that they received 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 (39.8 percent) and purchase of consumer durables (20.2 percent) declined. The percentage of OFW households who allocated part of their remittances for education (67.6 percent), medical expenses (55.2 percent), purchase of house (10.2 percent), investment (3.8 percent), and purchase of motor vehicles (6.4 percent) remained steady. More OFW households, however, utilized their remittances for savings (39.6 percent from 38.6 percent in Q2 2016) and other miscellaneous expenses (4.6 percent).

---------------

About the survey

The Q3 2016 CES was conducted during the period 1 - 12 July 2016. The CES samples were drawn from the Philippine Statistics Authority (PSA) Master Sample List of Households, which is considered a representative sample of households nationwide. The CES sample households were generated using a stratified multi-stage probability sampling scheme. It has a sample size of 5,810 households, of which 3,002 (51.7 percent) were from NCR and 2,808 (48.3 percent) from AONCR.

Of the sample size, 5,627 households responded to the survey, equivalent to a response rate of 96.9 percent (from 96.5 percent in the last quarter’s survey). The respondents consist of 2,904 households (or 96.7 percent response rate) in NCR and 2,723 households (or 97 percent response rate) in AONCR. Nearly half of the respondents (46.9 percent) were from the low-income group, 38.8 percent from the middle-income group, and 14.2 percent from the high-income group.

Read Full Report

 

RSS Subscribe for updates

Archives