Consumers wary, but businesses turn bullish in Q4 – BSP poll

Ramon Royandoyan –

December 17, 2021 | 5:11 p.m.

MANILA, Philippines – Consumers have turned pessimistic as businesses were optimistic about their prospects for the last quarter of the year, the Bangko Sentral ng Pilipinas reported on Friday.

A nationwide BSP survey of 5,495 households from October 1 to 13 found that the overall Consumer Confidence Index (CI) deteriorated to -24% in the fourth quarter, from -19, 3% already dismal in the previous quarter.

On the one hand, the BSP poll from October 8 to November 18 of 1,511 companies found that the overall business CI turned positive again in the fourth quarter, a turnaround after a slight contraction in the third quarter.

A negative CI usually means that pessimism prevailed over the period. For CI consumers, the decline represents a generally darker outlook for the number of households, with pessimistic views overtaking optimistic views.

The BSP poll said the negative outlook for consumers in the fourth quarter stemmed from fears surrounding higher unemployment, low income, the pandemic situation as well as higher inflation of consumers and a family member out of work.

Meanwhile, the return to business optimism in the fourth quarter was largely due to the economic reopening, easing restrictions, improving demand and sales, the vaccine rollout as well as to the usual increase in demand for the holiday season.

For the first quarter of 2022, consumer confidence improved, with the CI increasing 9.3% from 2.7% recorded in the third quarter survey. Optimism prevailed as the household CI for the next 12 months rose 23.6% from 18.6% in the survey results for the previous quarter.

Likewise, companies were confident the recovery would be seen in the first quarter of 2022, as CI jumped 52.8% from 31.9% in the previous quarter. The next 12 months would be better for businesses as the overall CI rose 67.6% versus 56% in the previous quarter’s profit.

Wanted for comment, Michael Enriquez, chief investment officer at Sun Life Investment Management and Trust Corp. explained that the disparity between consumer and business confidence in the fourth quarter was due in part to uncertainty.

“I think there is a timing issue because in the third quarter we had the highest COVID cases and the uncertainty was still there,” Enriquez said in a Viber message.

Enriquez is banking on more companies and businesses to hire more people and grow as sentiment improves. For Nicholas Antonio Mapa, senior economist at ING Bank in Manila, the rollout of the vaccine by the national government is crucial to maintaining these optimistic prospects.

“Corporate sentiment has improved dramatically as the economy reopens, which hopefully can be sustained as long as we keep our covid cases under control. Vaccination will be key,” Mapa said. in a Viber message.

“Consumers, on the other hand, remain cautious because despite better growth figures, unemployment and inflation remain a concern. In addition, households have used loans to cover their expenses at a higher rate, suggesting that Bank loans have helped prop up spending amid the recovery, ”he added. .

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