Consumers turn gloomy over Philippine economy in Q3 2018

The Bangko Sentral ng Pilipinas' consumer expectation report reveals that Filipinos are now pessimistic on the economy

Ralf Rivas

12:13:57pm September 7, 2018

12:15:30pm September 7, 2018

GLOOMY. Consumers are now pessimistic on the economy. Photo by Darren Langit/Rappler

GLOOMY. Consumers are now pessimistic on the economy. Photo by Darren Langit/Rappler

MANILA, Philippines – Consumer confidence on the economy dipped to negative territory at -7.1% during the 3rd quarter, as prices of goods shot up in 2018.

The latest Consumer Expectation Report by the Bangko Sentral ng Pilipinas (BSP) revealed the confidence index (CI) dived to negative levels after 8 quarters of positive consumer reading.

Respondents of the survey were pessimistic on the economy due to the increase in commodity prices, low salaries, higher household expenses, high unemployment, and no increase in income.

“Respondents also noted concerns on higher educational expenses and higher transportation expenses as reasons behind their gloomy prospects,” the report said.

Consumers also expected inflation and interest rates to jump and the Philippine peso to depreciate for the year ahead.

Income groups also had weakened expectations for the current quarter, next quarter and the year ahead. 

Savings dwindle

The report also said that the percentage of households with savings decreased during the 3rd quarter. 

Percentage of households with savings declined to 32.5% from 37.4% in the previous quarter. 

Of those that were able to save up, 46.5% kept their savings at home, while 32.7% put their money in cooperatives, paluwagan, other credit/loan associations, and as investment. 

Almost one-third 31.7% of the respondents declared that they have outstanding loans. 

“For the current quarter, debt-to-income ratio of surveyed respondents rose to 43.4 percent, higher than the previous quarter's survey results of 27 percent,” the report said.

Businesses also reported a less favorable outlook on the economy, where confidence dipped to an 8-year low. Firms were also wary over high inflation and the depreciation of the peso. – Rappler.com