The impact of natural calamities, governance issues, and peace and order in Mindanao weakened consumer sentiment in the fourth quarter of the year, according to the Consumer Expectations Survey (CES) of the Bangko Sentral ng Pilipinas.
In the fourth quarter, the overall consumer confidence index (CI) recorded a 10-quarter low of -21.3 percent from the -7.9 percent in the previous quarter.
“This indicates that the number of pessimists increased and continued to outnumber the optimists, with the margin remaining narrow although slightly higher,” it stated. Respondents cited higher prices of commodities because of the weather-related disruptions in the harvests of agricultural products; the issues relating to the P10-billion scam on the Philippine Development Assistance Fund; and the concerns over the peace and order situation in Mindanao as the reasons for their bearish outlook on the fourth quarter.
For the next quarter and the year ahead, the CES said that consumer sentiment remained “favorable” as the CI stayed in the positive territory although lower. The CI for the next quarter and the year ahead was at 2.8 percent and 14.1 percent, respectively, compared to the readings of the previous quarter.
“The number of consumers with favorable views decreased but still exceeded those with unfavorable views,” the survey stated. The less optimistic outlook of respondents was because of their expectations of lower income, because of poor harvest and damages to crops and irrigation systems caused by poor weather conditions in October 2013.
Expectations on higher household spending during the holiday season and graduation events in the quarter ahead also contributed to the respondents’ outlook.
The CES is a nationwide survey started in 2007. For the third fourth quarter of 2013, the survey was conducted from October 1 to 12, with a total sample size of 5,912 households.