Optimism among Filipino households declined slightly in the second quarter with overall confidence dropping from the previous quarter, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
The central bank’s latest Consumer Expectations Survey (CES) showed a marginal decline in the confidence index (CI)–computed as the percentage of those who answered in the affirmative minus the percentage of those who answered otherwise–to -6.4 percent from -5.7 percent in the first quarter.
The overall consumer CI measures the average direction of change in three indicators–overall condition of the economy, household finances and household income.
A positive CI indicates a favorable view with regard to a given indicator, except for inflation, interest rates, unemployment and change in prices, where a positive CI indicates the opposite.
“This indicates that the pessimists continued to outnumber the optimists, but the margin, while increasing slightly, remained narrow,” the BSP survey said.
The nationwide survey, which was conducted from April 4 to 16, covered 5,961 households, 3,081 of which were from the National Capital Region (NCR or Metro Manila) and 2,880 from areas outside the NCR.
The BSP said the “sustained outlook” in the second quarter had been spurred by expectations of increase in the number of employed family members; increasing family income because of higher salary and stronger business activity; lower household expenses as well as debt payments; and improvements in the peace and order situation.
“The other factors cited by respondents that helped maintain their confidence for the current quarter were assistance from government such as the Pantawid Pamilyang Pilipino Program, and the incoming change of administration as well as election of new government officials,” the BSP said.
Respondents’ positive sentiments were, however, counterbalanced by adverse effects of El Niño on crop production that resulted in poor harvest, it added.
Looking ahead, overall consumer sentiment turned less optimistic, with the index declining to 5.6 percent for the third quarter of 2016 from 9.1 percent in the previous survey.
For the next 12 months, the CI improved to 26.6 percent from 25.4 percent three months earlier.
“According to respondents, their less sanguine outlook for the next quarter stemmed from expectations of lower harvest, slower business activities during the rainy season and expectations of higher expenses for their children’s education,” the central bank said in a statement.
For the year ahead, consumers attributed their more optimistic outlook to the change in administration as well as the election of new government officials, expected improvements in the peace and order situation and availability of more jobs, both local and abroad.
“For the next quarter and the year ahead, consumer outlook on the country’s economic condition was more sanguine while their outlook on family financial situation and income declined [but remained positive]compared to their expectations in the previous quarter’s survey,” the central bank said.