Consumer confidence still 'positive' in Q1 but COVID-19 outbreak darkens outlook

Ian Nicolas Cigaral - Philstar.com
This March 20, 2020, photo shows people walking down the street to buy groceries amid the Luzon-wide lockdown imposed by the government to arrest the spread of the new coronavirus.
The STAR / Edd Gumban

MANILA, Philippines — Consumer confidence remained intact in the first three months of the year, but overall sentiment turned sour for the second quarter and the next 12 months as Filipinos brace for the impact of natural disasters and the coronavirus outbreak on prices of goods and their income, a central bank survey showed on Thursday.

Results of a nationwide poll of 5,555 households from January 29 to February 10 by the Bangko Sentral ng Pilipinas (BSP) showed the country’s overall consumer confidence index (CI) stayed positive in the first quarter albeit marginally lower at 1.26% from 1.31% previously.

The CI is computed as the percentage of optimistic households less the percentage of pessimists with respect to their views on a given indicator. The BSP uses three indicators to measure consumer confidence: overall condition of the economy, household finances and household income.

According to the central bank, respondents attributed their upbeat sentiment in the first quarter to availability of more jobs, “effective” government programs and good governance. However, their positive attitude was hurt by concerns on faster inflation, low income, occurrence of calamities and the coronavirus outbreak, and higher household expenses.

“By income group, the steady overall CI for Q1 2020 stemmed from the less pessimistic outlook of the low-income group and the less buoyant sentiment of the middle and high-income groups,” the BSP said.

Looking forward, the BSP poll revealed the consumers are less bullish for the second quarter and the next 12 months as they anticipate faster increase in prices, low or steady income, natural disasters and virus outbreak as well as higher household expenses.

The central bank also reported that consumer spending may slow in the next three months, with the country’s spending outlook index falling to 33.3% for the second quarter from 37.1% previously.

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