MANILA, Philippines — Consumers and businesses took on a darker shade of gloom for the months ahead as prices of goods and services kept skyrocketing amid the economy’s reopening.
Results of a nationwide BSP survey of 5,446 families showed the overall consumer confidence index (CI) slid deeper into the red at -12.9% in the third quarter, worse compared to the -5.2% reading in the preceding quarter. However, sentiment proved optimistic as the consumer CI in the fourth quarter rose to 13.4% from 11.2% previously, while confidence for the next 12 months inched up 33.4%.
A separate central bank poll of 1,504 companies showed the business CI plunged to 26.1% for the third quarter from 35.4% in the preceding three months. Likewise, for the fourth quarter and the next 12 months, business sentiment dimmed to 43.9% and 57.7%, respectively.
That said, the consumer CI remaining in negative territory means pessimists continued to outnumber optimists. The BSP clarified that “the number of households with pessimistic views increased and continued to outnumber those with optimistic views.” The overwhelmingly negative sentiment in the business sector means that operating under a high inflation environment is taking its toll on firms and companies.
The latest survey results revealed no surprises, considering that while most of the economy has reopened, consumers and firms endured a barrage of high prices of goods and services past months. Rising inflation, coupled with a depreciating peso and expensive fuel prices will muddy sentiment for months to come.
Breaking down the BSP’s report, both consumers and businesses attributed their glum outlook to the higher cost of goods and services, which came about as consumer spending spiked in past months. Consumers were forced to dip into their savings, as businesses were less than forthcoming about hiring more people.
For Michael Enriquez, chief investment officer at Sun Life Investment Management and Trust Corp., pessimism will be top of mind for the Philippine economy.
“I think this will remain to be pessimistic for quite some time as we need to see the Philippine peso appreciate again and gas prices to go down further,” he said in a Viber message.