Filipino consumers’ spending outlook on basic goods for the fourth quarter of 2018 has notably improved and this is expected to bring windfall benefits to the domestic economy.
Results of the BangkoSentral ng Pilipinas’ (BSP) Consumer Expectation Survey (CES), conducted from July 1-14, 2018, showed that index on spending outlook rose to 45.7 percent from 36.3 percent in the previous quarter’s survey.
BSP Deputy Governor DiwaGuinigundo, in a briefing Friday, said CES results’ correlation to gross domestic product (GDP) is about 0.65 percent. “If we take a look at the consumption expenditure it is basically going up so given the correlation of 0.65 (percent) we can expect that the third quarter GDP will show some gains,” he said.
Domestic growth in the second quarter this year slowed to six percent from 6.6 percent in the previous quarter, due in part to deceleration of consumption expenditure. “So we would expect that for this next three months we would expect some gains in consumption expenditure,” he said.
Consumers’ positive spending outlook for the last quarter of the year is a welcome development after results of the CES for the third quarter this year indicated that consumer sentiment turned sour, with the index going to the negative territory at -7.1 percent from 3.8 percent in previous quarter’s survey, he added.
Respondents attributed their negative outlook to higher commodity prices, lower salary, higher household expenses, high unemployment rate and no increase in income.
For the next quarter, the index went down to 3.8 percent from the previous quarter’s 8.7 percent. The index for the next 12 months had gone on the same path after it went down to 13 percent from 23.1 percent in the previous quarter.
Some respondents ticked the box that said “no increase in income” as among the reasons for their negative outlook for the quarter and until the next 12 months. (PNA)