BSP: PH consumer confidence slumps to postpandemic low
Filipino consumers turned the most downbeat since the pandemic in the second quarter as the conflict in the Middle East fueled concerns over higher food and fuel prices, while businesses grew less pessimistic on hopes of stronger profits and lower energy costs.
The confidence index for households fell to -42 percent, from -15.8 percent in the first quarter, the Bangko Sentral ng Pilipinas (BSP) reported on Friday. It was based on a survey of 5,503 households from April 6 to April 18.
A negative reading means the pessimists outnumbered the optimists. The latest figure was the weakest since the fourth quarter of 2020, when the index sank to -47.9 percent as the country was still grappling with the pandemic.
Respondents cited rising fuel and food costs linked to the nearly four-month-old conflict in the Middle East as their biggest concern. They also pointed to corruption in government and what they viewed as inadequate policies to cushion households from higher living costs.
Consumer prices rose 6.8 percent in May from a year earlier, slowing from April’s 7.2-percent pace but still above the central bank’s 2-percent to 4-percent target range for a third straight month.
The survey suggests households are already pulling back on spending. More respondents said they did not intend to buy big-ticket items, while fewer expected to save, likely because higher prices are forcing them to devote a larger share of their income to essential expenses.
The gloom is expected to persist. The confidence index for the next quarter fell to -16.3 percent from 1.8 percent previously, while the 12-month outlook weakened to 0.2 percent from 9.6 percent, leaving consumers barely optimistic about the year ahead.
Business confidence
Businesses, however, struck a less gloomy tone. A separate BSP survey of 502 companies showed the business confidence index improved to -25.2 percent in May from -35.8 percent in April.
Firms also turned cautiously optimistic about the near term. The confidence index for the next three months rose to 0.6 percent from -7.5 percent, while the 12-month outlook strengthened to 27.8 percent from 19.5 percent, suggesting businesses expect operating conditions to improve over the coming year.
