Feedback Corner

Publications and Research

Media Releases

Consumer Confidence Moderates but Remains Positive for Q3 2017, More Upbeat for Q4


Consumer confidence declines for Q3 2017

Consumer sentiment weakened but remained positive for Q3 2017, with the overall confidence index (CI) decreasing to 10.2 percent from 13.1 percent for Q2 2017. Despite the decline in the CI, consumer confidence remained high, registering the second highest reading since the start of the nationwide survey in Q1 2007. The lower but positive CI indicates that the number of optimists declined but continued to outnumber the pessimists. 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.

According to respondents, their less favorable outlook for the current quarter was due to the following reasons: (a) anticipated higher prices of commodities which could lead to higher household expenditures, (b) peace and order problems (particularly, crisis in Marawi City), (c) low or no increase in income, and (d) expected increase in the number of unemployed persons. Respondents also cited other concerns on occurrence of calamities during the third quarter and poor health.

For the next quarter (Q4 2017), consumer sentiment turned more upbeat as the CI increased to 17.8 percent from 13.6 percent in the previous quarter’s survey. Respondents’ more optimistic outlook for the next quarter stemmed from expectations of (a) additional income and salary increase, (b) improvement in peace and order, and (c) availability of more jobs. Meanwhile, consumer outlook for the year ahead remained broadly steady as the CI showed a marginal decline to 33.7 percent from 34.3 percent for Q2 2017.

Consumer confidence is measured across three component indicators, namely, the country’s economic condition, family financial situation, and family income. For Q3 2017, consumer sentiment on the three indicators was mixed, as optimism was lower on the country’s economic condition, higher on family’s financial situation and broadly steady on family income. Notably, record-high CIs were posted on the outlook on family financial situation (at 7.6 percent from 4.4 percent) and family income (at 9 percent from 8.3 percent). For the next quarter (Q4 2017), consumers’ views on family finances and income turned more buoyant but was steady on the country’s economic condition. Meanwhile, outlook on family income weakened for the year ahead, although remaining positive, but was steady on the economic condition of the country and family financial situation

Consistent with the less optimistic overall sentiment of consumers, consumer outlook across income groups likewise weakened for the current quarter. In particular, the low-income group turned pessimistic for the current quarter as the CI reverted to negative territory, with respondents anticipating no increase in salary for the period. Meanwhile, the middle-income group’s less upbeat sentiment was due largely to expectations of higher household expenditures. Respondents from the high-income group, while remaining to be the most optimistic, also cited higher prices of goods and peace and order problem as reasons behind their less optimistic outlook. Conversely, consumers were more optimistic for the next quarter across income groups.  For the year ahead, the sentiment was mixed. The outlook was less favorable for the low-income group, more upbeat for the middle-income and generally unchanged for the high-income.

Spending outlook on basic goods and services is lower for Q4 2017

The spending outlook index of households on basic goods and services declined to 28.1 percent for Q4 2017 (from 29.3 percent in the previous quarter). This means that although more respondents continued to expect higher spending on basic goods and services, the number that said so decreased compared to a quarter ago, indicating that growth in consumer spending could slow down in the near term. Across commodity groups, the spending outlook was mixed. Fewer respondents expected an increase in expenditures on food, non-alcoholic and alcoholic beverages, water, electricity, medical care, transportation, education, recreation and culture, and personal care and effects, while more indicated higher expenditures for clothing and footwear, communication, and restaurants and cafes. The spending outlook was generally steady for house rent and furnishing, and fuel.

The percentage of households that considered the current quarter as a favorable time to buy big-ticket items declined to 30.2 percent from 33.9 percent for Q2 2017. The less favorable outlook on buying conditions was evident across all big-ticket items as respondents prioritized food and other basic needs over expenditures on consumer durables, motor vehicles, and house and lot. For the year ahead, buying intentions of respondents for big-ticket items turned less favorable, with the percentage of households that intend to buy big-ticket items decreasing to 11.2 percent from 12.3 percent a quarter ago. Buying intentions for consumer durables and real estate declined but remained broadly steady for motor vehicles compared to the previous quarter’s survey results.

The percentage of households with savings increases for Q3 2017

For Q3 2017, the percentage of households with savings increased to 36.8 percent from 35.8 percent in the previous quarter. According to respondents, they save money for the following reasons: (a) emergencies,  (b) education, (c) retirement, (d) health and hospitalization, (e) business capital and investment, and (f) purchase of real estate. Almost two-thirds (65.8 percent) of household savers had bank deposit accounts while  42.4 percent kept their savings at home and 28.7 percent put their money in cooperatives, paluwagan, other credit/loan associations, and as investment (e.g., insurance (such as SSS and Pag-IBIG)).

Meanwhile, the percentage of respondents who reported that they could set aside money for savings during the current quarter declined to 43 percent from 44.9 percent for Q2 2017. However, the proportion of those that could set aside 10 percent or more of their monthly gross family income was higher at 40.3 percent from 38.6 percent for Q2 2017.

Consumers expect inflation and interest rates to rise and the exchange rate to depreciate for the year ahead

The survey results showed that consumers anticipated inflation to increase but to remain within target, interest rates to go up and peso to depreciate in the next 12 months. Inflationary expectations have eased as the number of respondents that indicated that inflation will rise decreased from that of a quarter ago. Respondents anticipated the rate of increase in commodity prices to stay within the government’s 2 to 4 percent inflation target range for 2017, at 3.2 percent over the course of the next 12 months (slightly higher than the expected 2.9 percent in the Q2 2017 survey). Broadly the same number of respondents expected interest rates to rise compared to a quarter ago. Meanwhile, respondents are of the view that the peso would continue to depreciate against the US dollar over the next 12 months. Fewer respondents anticipated unemployment to rise for the year ahead as the CI declined to 0.8 percent from 1.9 percent for Q2 2017.

OFW households that utilize their remittances for savings declines for Q3 2017

Of the 482 households included in the survey that received OFW remittances for Q3 2017, 98.1 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 education (70.3 percent), investment  (8.5 percent) and other miscellaneous expenses (2.7 percent) increased. Meanwhile, the percentage of OFW households who allocated part of their remittances for medical expenses (52.5 percent), savings (42.1 percent), debt payments (40.2 percent), purchase of consumer durables (24.5 percent), purchase of house (14.5 percent), and purchase of motor vehicles (6.2 percent) declined.

About the survey

The Q3 2017 CES was conducted during the period 1 – 15 July 2017. 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 5,597 households, of which 2,763 (49.4 percent) were from NCR and 2,834 (50.6 percent) from AONCR.

Of the sample size, 5,430 households responded to the survey, equivalent to a response rate of 97 percent (from 95.5 percent in the last quarter’s survey). The respondents consist of 2,687 households in NCR (with 97.2 percent response rate) and 2,743 households in AONCR (with 96.8 percent response rate). The majority of the respondents were from the low-income group (43 percent) and from the middle-income group  (39.7 percent) while 17.3 percent were from the high-income group.

For inquiries, please contact the Department of Economic Statistics

Read Full Report

RSS Subscribe for updates