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IN these
times of ever-rising prices of fuel, the rich are
proving to be like the rest of ordinary folk, as even
middle- and upper-class families begin to think twice
before eating in high-end restaurants, replacing a
three-year- old car or getting that extra fashionable
watch.
This was
shown in the Nielsen Co.’s latest biannual consumer
confidence survey where consumer spending appeared to
have dropped a relatively steep 9 points in the first
half of this year.
If this
persists, Nielsen-Philippines managing director
Benedicto Cid Jr. said real estate and the auto industry
may be in trouble, and further cause the country’s
economic growth to slow down as consumers tend to shy
away from purchasing big-ticket items.
“Philippine consumer confidence remains above the global
average, but like most countries, it dropped
significantly by 9 points to 99. [This is] driven by
less optimism about job prospects, personal finances and
spending; across-the-board, [they all dropped],” said
Cid during a press briefing.
While
most well-off families have not significantly reduced
spending yet, Cid said their access to information on
high inflation, the United States recession, and the
global economic slowdown may have contributed to their
perception that times are hard and there is a need to
rein in spending.
The
survey was conducted over the Internet with about 523
respondents in the Philippines, out of the 28,253
consumers interviewed in 51 markets all over the world
from April 21 to May 6.
The
Philippine contingent were mostly between 18 and 30
years old and considered members of the upper or middle
class who compose around 20 percent of the population
and hold roughly 80 percent of the wealth in the
country.
“People
observe increases in prices. They see a lot of
differences in prices on food items. This is a very
visible change and leads a lot of people to be
concerned,” added Cid. But the “upper and middle class
is not yet suffering. What they’re worried of is
work/life balance. They’re worried that they are
sacrificing too much of their personal life.”
Filipinos’ major concern over the next six months are
maintaining work/life balance, which is the amount of
time people spend at work and on their selves, job
security and the economy.
This
differs from the results in the regional level in that
the average Asian’s main worry concerns three
factors—state of the economy, work/life balance and job
security.
The
survey showed that 6 out of 10 Filipinos believe the
Philippines is in recession at this time. Cid said this
may be a perception caused by the recent increases in
oil and food prices.
Filipinos also indicated that should the economic
downturn continue long enough, they will begin to be
anxious about unemployment, inflation, political
instability, interest rates and civil conflicts.
One
thing that may differentiate Filipinos from some
westerners—whom some economists have said to begin a
spending spree when the economy seems going down—is to
save whatever spare cash they may have, making the
Philippines second among 48 countries in the tendency
toward saving.
After
saving, Cid said Filipinos tend to spend on small-ticket
items such as new clothes, technology and paying off
their debts. There was also a slight uptick in the
number of Filipinos who are putting their money into
mutual funds and stocks.
The
survey indicated that Filipinos are less interested in
spending for home improvement at this time, which may be
a result of lower consumer confidence.
The
global survey showed that 39 of the 48 countries who
participated registered similar drops in consumer
confidence. The most pessimistic countries were Japan,
Korea and Portugal, and the most optimistic ones were
Norway, India and Indonesia.
Globally
and within the Asia Pacific, the major concerns for the
next six months are the economy followed by work/life
balance and health.
Around
half of consumers worldwide believe their own countries
are in economic recession, driven by ebbing US and
European economic performance. However, only 26 percent
expect to see a recession all around the world in the
next 12 months. |
