Consumer outlook weakened in first quarter: central bank

March 26, 2018

Consumer confidence weakened but remained positive for the first quarter 2018, with the overall confidence index  declining to 1.7 percent from 9.5 percent for fourth quarter of 2017, the central bank said in a survey on Monday.

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 the first quarter 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 confidence index 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.

For the first quarter, consumer confidence waned across the three indicators due to the anticipated increase in prices. Notably, the confidence index for 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.

The confidence index on the economic condition of the country registered the biggest decline among the three indicators.

Consumer outlook also weakened across income groups for the current and next quarters and the year ahead.

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 ir salary. For the next quarter and the year ahead, the same less favorable outlook was reflected across all income groups. DMS