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Saturday, March 11, 2006
Consumers ‘optimistic,’ expect income to rise
CONSUMERS are “more optimistic” about their financial condition and the country’s economic state this year, according to the Bangko Sentral ng Pilipinas (BSP).
The BSP cited results of the consumer expectations survey (CES) that reveal consumers are more optimistic about both their households’ financial condition and the state of the country’s economy in the first quarter of 2006 and the whole year.
The overall diffusion indices (DI) for all categories during the three periods under review (current quarter, next quarter and twelve months hence) are on the uptrend and at their highest levels since the start of the CES in the third quarter of 2004, said a report posted on the BSP website yesterday.
All levels
It said the positive sentiment, as indicated by improving outlook indices, is noted across all income levels based on all three conditions: family financial situation, family income level and economic condition of the country.
The CES results for the first quarter outlook were based on responses of 2,494 households in the National Capital Region. The survey for the first quarter of this year was conducted from Jan. 20 to 26 this year.
Among the reasons cited by respondents for their better economic and financial outlook for the current quarter are: expected increase in income arising from better business conditions and more working family members; savings in the family; effective government policies; and possible job abroad.
According to the BSP report, respondents expect their family expenditures for basic commodities to rise by an average of 1.5 percent in the second quarter of 2006.
This is lower compared to the average increase of 6.2 percent indicated by respondents during the survey in the fourth quarter of 2005.
“Respondents expect food and electric and water bills to dominate the increase in their household expenditures,” it said.
Decline
Survey respondents expect a decline in their expenditures for other basic goods and services, namely: clothing and footwear, transportation, communication, education, medical care, personal care and effects, and hotel and restaurants, it said.
“Given expectations of better financial conditions ahead, respondents believe that consumers’ buying conditions in the quarters ahead will be more favorable, as indicated by the improvement in the buying condition indices for the current quarter (from 31.9 to 43.3) and for the next twelve-month period (from 24.8 percent to 28.3 percent),” the BSP report said.
Survey results indicate that conditions will favor the purchase of consumer durables, such as houses, lots and motor vehicle in quarters ahead.
Also, households cite that among the factors that would encourage them to buy assets are: increase in income, easy installment terms, form of investment (in the case of housing), usefulness in business and convenience to family members (in the case of motor vehicle).
But majority of the respondents, who indicated they will not buy in the next 12 months, cited high prices, low or insufficient income and higher priority for food and other basic needs.
Respondents expect better employment conditions ahead while the peso depreciation and increases in interest rates would slow down over the next 12 months.
Inflation rate for the next 12 months would slow down to 6.5 percent with the highest price adjustments anticipated in utilities, transportation, fuel and food.
Among the 2,353 survey respondents, 208 or 8.8 percent have at least one member working overseas with 92 percent of them having remitted money to their families in the last 12 months. (LAP/with PR)
For Bisaya stories from Cebu. Click here. (March 11, 2006 issue)
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