Consumer mood up, business optimism softens in Q3

According to the BSP, the positive index reflects the number of optimists outnumbering pessimists in the third quarter.

Consumer sentiment proved buoyant in the third quarter even as confidence softened among local businesses, the Bangko Sentral ng Pilipinas (BSP) said in its latest business (BES) and consumer expectations surveys (CES).

Data from the CES show the overall confidence index (CI) for consumers bounced back to 4.6 percent in the third quarter, a reversal from the bleak pessimism in the previous quarter when the index stood at minus 1.3 percent.

“Respondents’ optimistic outlook during the third quarter 2019 was attributed to their expectations of the improvement in the peace and order situation, availability of more jobs, additional and high income and good governance,” the CES said.

According to the BSP, the positive index reflects the number of optimists outnumbering pessimists in the third quarter.

Looking forward to the fourth quarter, consumer confidence proved even more upbeat, with survey results showing the CI at 15.8 percent, significantly higher than the recorded 9.7 percent in the second quarter survey.

“Likewise, consumer optimism for the next 12 months improved as the CI increased to 29.8 percent from the second quarter 2019 survey result of 25.2 percent,” the BSP said.

Business confidence on the other hand was more muted as the overall CI fell to only 37.3 percent from 40.5 percent in the second quarter.

“Respondents’ attributed their weaker sentiment for the third quarter 2019 to seasonal factors such as slack in the demand and slowdown of business activities during the rainy season, decline in orders leading to lower sales, lack of supply of raw materials, the perceived unfavorable effects of various government policies and stiffer competition,” the BES reported.

“The lower but positive CI means that the number of optimists declined but continued to be greater than the number of pessimists for the third quarter 2019,” it added.

According to the BSP, the sentiment of businesses in the Philippines contrasted against the less buoyant business outlook in Bulgaria, Croatia, Germany, India and Norway. But business confidence in Australia, Brazil, Canada, Chile, France, Greece, Hungary, Israel and Ukraine were more optimistic.

For the succeeding quarter, business outlook proved more optimistic with the CI rising to 56.1 percent from just 47.6 percent in the second quarter 2019 survey outturn.

“Respondents’ more positive outlook for the fourth quarter 2019 was due to expectations of higher consumer demand during the holiday and harvest seasons, continued increases in orders and projects, more favorable macroeconomic conditions, higher government spending and business expansion,” the BSP explained.