MANILA – The additional income and availability of more jobs helped improve consumer sentiment in the first quarter of the year but business confidence turned less upbeat due to persistent inflationary pressures, results of a Bangko Sentral ng Pilipinas (BSP) survey showed.
In a virtual briefing on Friday, BSP Department of Economic Statistics Senior Director Redentor Paolo Alegre Jr. said results of the first quarter 2021 Consumer Expectations Survey (CES) and Business Expectations Survey (BES) showed that consumer sentiment improved as the overall confidence index (CI) became less negative at -10.9 percent from -19 percent in the fourth quarter of 2023.
Alegre attributed the improved outlook to expectations of higher income, availability of more jobs and permanent employment, and additional working family members.
He said that in the first quarter, consumers were less hesitant about buying big-ticket items.
The percentage of households with loans and savings also increased.
However, Alegre said consumer sentiment in the second quarter and the next 12 months was weaker as the CI declined to 2.7 percent and 13.4 percent from 5.6 percent and 15 percent, respectively, in the fourth quarter 2023 survey round.
The weaker outlook was attributed to consumers’ anticipation of a faster increase in the prices of goods, fewer available jobs, and lower income.
For the BES, the CI declined to 33.1 percent from 35.9 percent in the fourth quarter of 2023.
The firms' less optimistic sentiment in the first quarter is due to expectations of a post-holiday decline in demand for goods and services and a slowdown in business activities, persistent inflationary pressures from higher food and oil prices and its impact on the economy, stiff competition, and the adverse effects of a strong El Niño on the agriculture sector.
"However, business sentiment is more buoyant for the second quarter of 2024," Alegre said.
He also traced the more optimistic outlook to firms' expectations of higher demand for products and services, completion of more projects due to a more conducive business environment, seasonal uptick in business activities in the tourism and fisheries sector during the open fishing season, business expansions and development of new products, and easing inflation.
Alegre said the business sentiment for the next 12 months is also more upbeat.
In terms of select economic indicators, firms and consumers expect that inflation and interest rates may rise in the first half of 2024 and the next 12 months.
Businesses expect that the peso may appreciate against the United States dollar but consumers see the local currency to depreciate.
Alegre said hiring intentions of firms may be favorable in the second quarter and the next 12 months. (PNA)
