Daily Tribune‘For this month and the rest of the year, consumers expect more regular job opportunities, higher incomes and continued flow of remittances from relatives working overseas, and other family members to be employed.’
Consumers are more optimistic about the economy in the third quarter of the year while businesses are less upbeat due to elevated inflation but also expect a better economy in the fourth quarter, the Bangko Sentral ng Pilipinas reported Friday.
For this month and the rest of the year, the central bank said consumers expect more regular job opportunities, higher incomes and continued flow of remittances from relatives working overseas, and other family members to be employed.
A BSP survey showed this optimism, with an overall higher consumer confidence index of negative 9.6 percent in the third quarter from negative 10.5 percent in the previous quarter.
The survey was answered by members of 5,404 households nationwide from 3 to 14 July.
It showed middle-income and high-income earners feel more pessimistic about the levels of family incomes in the third quarter, while the low-income group believes their incomes will remain stable, if not higher.
Backed by a generally positive sentiment about their finances, the survey showed consumers are more eager to borrow funds for big-ticket items in the third quarter.
Confidence index improved
Their confidence index in this matter improved to negative 62.7 percent in the third quarter from negative 67.7 percent in the previous quarter.
Households that applied for loans in the past 12 months increased to 26.6 percent of the total surveyed, up from 24.8 percent of the previous data. Similarly, households with savings also rose to 32.8 percent from 30.2 percent.
Consumers will likely remain upbeat about the economy for the fourth quarter this year as the confidence index was better at 7.8 percent from 4.6 percent in the previous quarter.
However, consumers see a gloomier economy for the next 12 months, with a lower confidence index of 18.9 percent in the third quarter from 20.5 percent a quarter ago.
The BSP survey said their pessimistic outlook stems from expectations of a higher jobless rate.
"Furthermore, consumers anticipate that the unemployment rate may rise for the current quarter, remain steady for the next quarter, and decline for the next 12 months," the survey report said.
Inflation will accelerate
Consumers also believe inflation will accelerate to an average of 6.6 percent in the next 12 months, higher than the government's target of 2 percent to 4 percent for this year.
In terms of foreign exchange, they see the peso weakening against the US dollar for the rest of the year and in the next 12 months, which signals higher prices of most goods.
