Consumer confidence drops to -12.9% in Q3

CEBU, Philippines —  Filipino consumers are wary of the increasing basic commodity prices in the third quarter of 2022, pushing overall confidence index (CI) down to -12.9 percent from -5.2 percent in the third quarter of this year.

Latest report from Bangko Sentral ng Pilipinas (BSP) indicated that the number of households with pessimistic views increased and continued to outnumber those with optimistic views.

According to the report, the weaker confidence among consumers was largely due to their concerns over the: (1) faster increase in the prices of goods and higher household expenses, (2) low income, and (3) fewer available jobs and working family members.

Meanwhile, the sentiment of consumers was more optimistic for fourth quarter of 2022 and the next 12 months as the CIs increased to 13.4 percent (from 11.2 percent) and 33.4 percent (from 32.4 percent), respectively.

The improvement in confidence among consumers is attributed to their expectations such as; 1) more available jobs, (2) additional income, (3) good governance, (4) effective government policies and programs by the new administration for agriculture, education, and economic recovery from COVID-19, and (5) the provision of pension and financial assistance.

The more pessimistic consumer outlook in the third quarter of 2022 was reflected across the three component indicators of consumer confidence, with the family financial situation recording the lowest CI, followed by economic condition and family income.

Consistent with the national trend, consumer confidence across all income groups (low-, middle- and high-income groups) also weakened in third quarter 2022. Aside from the reasons previously cited for the more pessimistic outlook in third quarter 2022, high-income consumers were also worried about the continuing public health risk posed by the COVID-19 pandemic and its possible adverse impact on the economy.

By geographical location, the consumer confidence in both the National Capital Region (NCR) and Areas Outside the NCR (AONCR) was more pessimistic in third quarter 2022, which is consistent with the national trend. In addition to the reasons earlier cited by consumers for their more pessimistic outlook during the period, respondents in AONCR (Areas Outside the National Capital Region) attributed their weaker confidence to their concerns over the ongoing travel and social gathering restrictions and the uptick in the country’s COVID-19 caseload.

On the other hand, the percentage of households in the country that considered third quarter 2022 as a favorable time to buy big-ticket items fell to 14 percent from 15.2 percent in the previous 2022.