Consumer confidence weakened but remained positive for Q1 2018, with the overall confidence index (CI)declining to 1.7 percent from 9.5 percent for Q4 2017. The lower but positive CI indicates that the number of optimists decreased 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 optimistic sentiment was mainly brought about by their expectations of: (a) higher prices of goods, (b) low income, and (c) rise in household expenses. Respondents also cited concerns on increase in household debts, occurrence of typhoon and other calamities, and poor harvest. The less optimistic consumer sentiment in Q1 2018 was carried to the near term and the next 12 months due to anticipation of continued increase in prices of goods that, in turn, increase household spending, as well as low earnings of the family. The CI for the next quarter and the year ahead, although remaining positive, declined to 8.8 percent from 17.5 percent a quarter ago and 24 percent from 32 percent a quarter ago, respectively. Weaker consumer sentiment is observed across the three indicators and across income groups. Consumer outlook is measured across three component indicators, namely, the country’s economic condition, family financial situation, and family income. For Q1 2018, consumer confidence waned across the three indicators due to the anticipated increase in prices. Notably, the CIs for the country’s economic condition and family financial situation reverted to negative territory for the current quarter (at -0.1 percent from 10.9 percent and -1.3 percent from 7.3 percent, respectively). Meanwhile, the current quarter CI for family income dropped to 6.6 percent from 10.3 percent. It may be noted that the CI on the economic condition of the country registered the biggest decline among the three indicators. Consumer sentiment for the near term and the year ahead on all three indicators likewise turned less positive compared to the previous quarter’s survey results.
Consumer outlook also weakened across income groups for the current and next quarters and the year ahead. For the current quarter, the low-income group turned more pessimistic while the middle- and high-income groups both registered a positive but less upbeat outlook. The primary reason driving the weaker outlook across income groups was their expectation of higher prices of goods. A secondary factor noted by the low- and middle income groups was low family income/salary. For the next quarter and the year ahead, the same less favorable outlook was reflected across all income groups. Spending on basic goods and services is expected to rise for Q2 2018. More respondents expected that their expenditures on basic goods and services would go up for Q2 2018 compared to the previous quarter’s survey results. Increased spending was expected on electricity, food, nonalcoholic and alcoholic beverages, fuel, water, and transportation, indicating that inflationary pressures could come from these goods and services. Meanwhile, 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 outlook on buying conditions was generally steady across all big-ticket items as the percentage of households that considered the current quarter as a favorable time to buy big-ticket items was broadly unchanged at 31.6 percent from 31.9 percent for Q4 2017. For the year ahead, the number of respondents who intended to purchase big-ticket items in the next 12 months dropped for Q1 2018 compared to the previous quarter’s survey results. The decline in buying intentions was evident across all big-ticket items. The percentage of households with savings increases for Q1 2018. For Q1 2018, the percentage of households with savings rose to 36.6 percent from 35.6 percent in the previous quarter. According to respondents, they save money for the following reasons: (a) emergencies, (b) education, (c) health and hospitalization, (d) retirement, (e) purchase of real estate, and (f) business capital and investment. Among households with savings, almost two-thirds (63.6 percent) had bank deposit accounts while 44.3 percent kept their savings at home and 29.6 percent put their money in cooperatives, paluwagan, other credit/loan associations, and as investment (e.g., insurance and micro finance). Meanwhile, the percentage of respondents who reported that they could set aside money for savings during the current quarter declined to 41.8 percent (from 43.6 percent for Q4 2017). However, the proportion of those that could set aside 10 percent or more of their monthly gross family income was higher at 39.2 percent (from 37.1 percent for Q4 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, interest rates to go up and peso to depreciate in the next 12 months. The number of respondents with views of higher inflation increased compared to that a quarter ago, reflecting stronger inflationary expectations over the next 12 months. Respondents anticipated the rate of increase in commodity prices to be above the government’s 2 to 4 percent inflation target range for 2018, at 4.7 percent over the course of the next 12 months (higher than the expected 3.6 percent in the Q4 2017 survey). Meanwhile, more respondents expected interest and unemployment rates to rise and the peso to depreciate against the US dollar over the next 12 months compared to a quarter ago. OFW households that utilize their remittances for savings and investment decline for Q1 2018 Of the 478 households included in the survey that received OFW remittances for Q1 2018, 96.4 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 (41.4 percent), savings (38.3 percent), investment (4.2 percent), and other miscellaneous expenses (2.7 percent) declined. Meanwhile, the percentage of OFW households who allocated part of their remittances for education (69.5 percent), medical expenses (54.6 percent), purchase of consumer durable (24.1 percent), purchase of house (15.9 percent), and purchase of motor vehicle (8.6 percent) increased.
Apr 25, 2018 0THE Department of Public Works and Highways – Region X welcomed its new Regional Director, Engr. Zenaida T. Tan, vice Engr. Virgilio C. Eduarte, CESO IV, Monday, April 16, 2018. A turn-over of key of responsibility by outgoing RD Eduarte to incoming RD Tan was held at the Regional Office –...
Apr 25, 2018 0