Philippine Q1 business and consumer confidence picks up

30, Mar. 2019

MANILA, NNA – Business and consumer confidence in the Philippines improved in the first three months of the year compared with the previous quarter, thanks to slower inflation and expected pre-election measures by the government to stimulate the economy.

Bangko Sentral ng Pilipinas (BSP) released the results of its Consumer Confidence and Business Confidence surveys for the January-March quarter on Thursday.

The composite index in the central bank surveys is the difference between the percentage of firms with positive views minus those with negative views.

Key points:

―― The consumer confidence index of current economic conditions rose to -0.5 in Q1 from -22.5 in Q4. The percentage of those less confident in the economy still outnumbered the optimists but the quarter-on-quarter rise in the number of positive views was the largest since the survey began in 2007.

―― The consumer confidence outlook index of conditions three months ahead rose to 10.7 from -0.8. The year ahead index improved to 28.4 from 10.7.

―― The percentage of households that considered buying big-ticket items, such as property and motor vehicles, rose to 26.5 percent from 24.5 percent.

―― The business confidence index climbed to 35.2 from 27.2 after slipping the previous four quarters, while the business outlook index rose to 52.0 from 29.4, the highest since Q4 of 2016. The construction sector was the most bullish.

―― Companies believe inflation will ease further but consumers are more skeptical.

Takeaway:

―― BSP Deputy Governor Diwa Guinigundo said consumers see this as the time to buy and that is a positive development for businesses..

―― Inflation slowed to 3.8 percent in February from 4.4 percent in January, settling within the government target range of 2 to 4 percent.