Filipino consumers were less pessimistic in Q1 – BSP survey

Honda targets bigger market share by yearend

By Luisa Maria Jacinta C. Jocson, Reporter

Consumers turned less pessimistic in the first quarter (Q1) amid expectations of improvements in income and employment, a survey by the Bangko Sentral ng Pilipinas (BSP) showed.

The BSP confidence index (CI) among consumers declined by 10.9% in the first quarter, an improvement from the 19% contraction in the previous quarter.

“The improved outlook of consumers for Q1 2024 is brought about by their expectations of additional and higher income, availability of more jobs and permanent employment, and additional working family members,” BSP Department of Economic Statistics Senior Director Redentor Paolo M. Alegre, Jr. said in a virtual briefing on Friday.

Latest data from the local statistics authority showed that the country’s unemployment rate fell to a two-month low of 3.5% in February.

This was equivalent to 1.8 million unemployed Filipinos, an improvement from the 2.15 million in January and 2.47 million a year ago.

BSP data showed that consumers’ buying sentiment for big-ticket items turned less pessimistic in the first quarter as the index improved to -62.6% from -71.3%. Consumers were also less hesitant about buying big-ticket items in the next 12 months.

More households also reported increases in loans and savings, the BSP said.

The survey showed that 24.9% of households availed of a loan in the last 12 months, slightly higher than the 22.9% in the fourth quarter. The percentage of households with savings also rose to 33.5% from 29.1%.


Meanwhile, Mr. Alegre said that consumer sentiment turned less favorable for the second quarter.

The index remained positive at 2.7% but was lower than the 5.6% in the fourth quarter.

This was due to expectations of a “faster increase in prices of goods, fewer available jobs, and lower income.”

Headline inflation is expected to temporarily accelerate above the BSP’s 2-4% target range over the next two quarters. Inflation quickened for a second straight month to 3.7% in March.

The survey showed that consumer sentiment is also less optimistic for the next 12 months. The index was at 13.4%, lower than the 15% in the previous quarter.


Meanwhile, the BSP said that business sentiment was “less bullish” in the first quarter.

“Firms were optimistic, however their optimism decreased from the previous period’s results,” Mr. Alegre said.

The confidence index for businesses eased slightly to 33.1% in the first quarter from 35.9% a quarter ago.

The main drivers for a less upbeat outlook were expectations of a decline in demand after the holidays, persistent inflation risks, stiff competition, and impact of the El Niño on agriculture.

Meanwhile, firms’ confidence was “more buoyant” in the second quarter. The index jumped to 48.1% from 38.2%.

“The firms’ more optimistic outlook for Q2 2024 was attributed to their 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 sub-sectors during the summer and open fishing seasons, business expansions and development of new products, and easing inflation,” the BSP said.

Businesses were also more upbeat for the next 12 months as the overall index rose to 60.8% from 54%.

“Compared to Q4 2023, the sentiment of firms in Q1 2024 was less upbeat for the industry and wholesale and retail trade sectors, more buoyant for the construction sector and steady for the services sector,” the BSP said.

“The business sentiment for Q2 2024 was more optimistic across all sectors,” it added.

Both households and businesses expect higher inflation and interest rates in the first half of the year and for next 12 months.

Firms see inflation averaging 5%, while consumers expect inflation to average 5.3%. This would be above the BSP’s 2-4% target and higher than the central bank’s 3.8% full-year forecast for 2024.

The BSP said that 5,207 households participated in the survey conducted from Jan. 19-31 while there were 1,525 firms surveyed from Jan. 5-12.

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