Consumers upbeat of Duterte honeymoon period - BSP

MANILA, Philippines — The next administration's honeymoon period has been welcomed by more optimistic consumers driving the local economy, the Bangko Sentral ng Pilipinas (BSP) reported Friday.

According to the latest BSP Consumer Expectations Survey, the consumer composite index (CI) went up to 26.6 percent for the next 12 months in the second quarter from 25.4 percent in the previous three months.

The CI measures the number of optimists over pessimists and a positive figure means the former outnumber the latter.

"For the year ahead, consumers attributed their more optimistic outlook to the change in administration as well as the election of new government officials," the BSP said in a statement.

This was reinforced by a better outlook for peace and order situation and availability of more jobs here and abroad, it added.

Running on an anti-crime platform, President-elect Rodrigo Duterte won the polls last May 9  after he vowed to "suppress" criminality in three to six months or resign from office.

The BSP survey, held from April 4 to 16, asked 5,754 households nationwide. It had a 96.1-percent response rate.

"This was actually the highest second-quarter reading for the next 12 months on recorded. This is very positive," BSP Deputy Governor Diwa Guinigundo told reporters in a briefing.

More pessimists

In the same quarter in 2010, the CI was at a lower 10 percent for the next year during the time then presidential candidate Benigno Aquino III was leading unofficial polls.

But Guinigundo was quick to add that this could not be attributed to a particular administration since economic conditions were different back then.

"The economy is in a much stronger shape today compared to what we had in 2010...The additional six years after that further cements market confidence driven by the households," he explained.

For this quarter, pessimists actually outnumbered optimists with -6.4 percent CI. While this has historically been the case for current-quarter readings, the figure was worse than the -5.7 percent in the first three months.

For the next three months, CI reading of 5.6 percent was also down from 9.1 percent, data showed.

Cited as reasons for less sanguine outlook were less harvests as a result of the El Niño phenomenon and impending La Nina as well as higher expenses for education during the enrollment period.

Nevertheless, Guinigundo said the positive outlook over the next year indicates the economy — which grew by three-year high 6.9 percent in the first quarter — will continue to source strength from consumers.

This is because businesses also take their cue from consumers as to the expansion of their operations, BSP deputy director Teresita Deveza said in the same briefing.

"If housing conditions are not good, business conditions are not good. It's really the household that is driving economic growth," she said.

Guinigundo agreed. "That particular component of GDP (gross domestic product) growth will also continue to drive the actual second quarter real GDP growth," he said.