IF CONSUMER sentiments are any indication, the country’s economy is benefitting them. The latest Consumer Expectations Survey found more respondents having an improved outlook due to many things. These include lower oil prices, stable prices of commodities, the appreciation of the peso and improvements and development of road infrastructure. Many also reported higher family incomes, more savings, more employed family members and more jobs available.
The first quarter confidence index was at -10 percent, an improvement from the -21.8 percent for the fourth quarter of 2014. For the second quarter, consumers continue to be more optimistic, raking in a confidence index of 4.4 percent from 0.7 percent. For the year ahead, confidence index was at 17.3 percent from 9.6 percent.
The survey is done quarterly by the Bangko Sentral ng Pilipinas from 5,705 households across the country. The survey was conducted between Jan. 26 and Feb. 5 with an response rate of 98.1 percent. Those with less than P10,000 monthly income comprised 46.5 percent of the respondents while the middle income group, who had incomes of P10,000 to P29,999, comprised 37.8 percent. Those who earned over P30,000 comprised 15.7 percent of the respondents.
Researchers noted that the more positive sentiments was broad-based across income groups, with the middle-income respondents showing the biggest improvement and the low-income respondents following in second.
However, spending could slow in the next months, as the spending outlook dropped to 30 percent from 41.8 percent as consumers expect inflation to decelerate.
“Even as majority of respondents continued to expect higher spending on basic goods and services, the number that said so declined compared to a quarter ago, indicating that the growth rate in consumer spending could slow down in the near term,” the report stated.
The spending outlook declined across commodity groups, except for water, which remained steady. The biggest declines were observed in spending for fuel, food, alcoholic and non-alcoholic beverages, transportation and communication.
Of the respondents, 28.4 percent found the first quarter a favorable time to buy items. Consumers were most optimistic about real estate, consumer durables and motor vehicles. Most still believe that real estate is a good investment while they find consumer durables more affordable. Motor vehicles also serve dual purpose for business and personal use. The lower oil prices also entice more the purchase vehicles.
This year, 11.6 percent find 2015 a good year to buy big-ticket items. However, buying intentions were more favorable for areas outside the National Capital Region (AONCR). “In the AONCR, buying intentions increased for consumer durables and motor vehicles, but remained steady for real estate,” the report read.
The number of households with savings increased to 31.6 percent from 25.7 percent the previous quarter. Reasons for saving include emergencies, education, health and hospitalization, retirement and business capital and investment. Of those who have savings, 68.5 percent have bank deposit accounts while 24.9 percent put their money in cooperatives, credit-loan associations and paluwagan. Thirty-nine percent of those who save still keep their savings at home.
Respondents who could set aside money for savings this quarter rose to 40.9 percent from 35.6 percent the previous quarter. However, the proportion of those who could set aside 10 percent or more of their income for savings was 36.2 percent.