PH consumers, firms turn less gloomy
Filipino consumers and businesses remained pessimistic in the third quarter, but their outlook brightened sharply as they anticipated higher incomes, stronger demand and improved profits, according to the Bangko Sentral ng Pilipinas (BSP).
The central bank’s survey of 5,476 households found that the consumer confidence index rose to -29.8 percent in the third quarter from -42 percent in the second quarter.
A negative reading means pessimists still outnumbered optimists.
The improvement reflected consumers’ expectations of higher earnings, new sources of income and stable employment, the BSP said.
Business sentiment followed a similar path.
The confidence index for 501 firms rose to -10.9 percent in August from -20.3 percent a month earlier.
Stronger demand
Companies cited expectations of stronger demand for essential goods, loan products and construction activity as reasons for their less pessimistic outlook.
The shift could provide a lift to consumer spending and business activity in the months ahead, but the still-negative readings suggest that households and companies have yet to regain enough confidence to drive a broad-based recovery in demand.
Survey data showed consumers expect inflation to hit 4 percent in the year ahead, still above the central bank’s 3-percent target.
It was also higher than their 3.3-percent expectation in the second quarter, with households pointing to limited government measures to insulate them from rising prices, especially higher food and utility costs.
Consumers also anticipate further currency depreciation, as well as higher unemployment and borrowing rates.
That said, the spending outlook of households became less optimistic while their saving intention turned positive.
Favorable job prospects
Meanwhile, businesses expect financial conditions to become less tight, though credit access is seen turning slightly tighter.
At the same time, employment prospects were more favorable, as the share of businesses planning to hire more workers over the next 12 months increased to 30.7 percent from 9 percent before.
Looking ahead, the consumer confidence index for the fourth quarter improved to -0.8 percent from -16.3 percent previously.
Sentiment for the next 12 months likewise turned more optimistic, rising to 9.1 percent from 0.2 percent before.
Respondents are expecting higher earnings, new income sources and improvements in governance.
Business outlook for the next three months also became more positive, rising to 24.6 percent from 3.7 percent before.
For the next 12 months, the confidence index turned more optimistic after increasing to 36.4 percent from 29.4 percent before, as firms hope for higher consumer spending, easing inflation and possible resolution of the Middle East conflict.
