Consumers confident about economic prospects, but not most businesses

The logo of the Bangko Sentral ng Pilipinas is seen at the Central Bank’s main building in Manila.

Local consumers are becoming more confident about the country’s economic prospects in the coming months, but businesses may not have the same outlook.

The latest Bangko Sentral ng Pilipinas (BSP) survey on consumer and business expectations showed that buyers and sellers share opposing views about where the economy is headed in the coming months.

In particular, consumer sentiment in the country continued to improve for the third quarter of the year as the overall confidence index (CI) was less negative at -19.3 percent from -30.9 percent in the second quarter.

The consumer outlook has been improving steadily since the third quarter of 2020, the quarter when the index reverted to negative mainly due to the Covid-19 pandemic.

The improved consumer sentiment was observed across the three component indicators of consumer confidence, namely, the country’s economic condition, family’s financial situation, and family income.

On the contrary, after three consecutive quarters of optimistic sentiment, the outlook of business owners on the economy turned pessimistic as the overall CI declined to -5.6 percent in the third quarter of 2021 from 1.4 percent in the previous quarter.

The businesses pessimism was attributed to the ongoing Covid-19 pandemic and its protracted adverse effects to their businesses, the re-imposition of enhanced community quarantine (ECQ), particularly in the National Capital Region (NCR) and the decrease in sales, orders, and income.

Firms also expressed concerns over government policies, particularly the actions to curb the spread of Covid-19 and its Delta variant, and higher prices of raw materials like steel, wood liner, glue, and other commodities.

Meanwhile, consumers’ rosier outlook was based on their view of availability of more jobs and more working family members, additional or higher income, and effective government policies and programs, particularly in addressing Covid-19-related concerns, such as the availability and rollout of vaccines, provision of financial assistance, and easing of quarantine restrictions.

The Third Quarter 2021 Business Expectations Survey was conducted during the period July 22 to September 15 this year. There were 1,511 firms surveyed nationwide, consisting of 584 companies in the National Capital Region (NCR) and 927 firms in areas outside NCR, covering all 16 regions nationwide.

The Third Quarter 2021 Consumer Expectations Survey, meanwhile, was conducted from July 1 to 14. In the survey, 5,670 households were surveyed, 50.3 percent were from the NCR and 49.7 percent from the areas outside NCR.


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