Filipino consumer confidence improved in the holiday-driven fourth quarter 2024 on the expectation of higher household income, based on a Bangko Sentral ng Pilipinas (BSP) survey.
According to the latest BSP Consumer Expectations Survey (CES), the consumer sentiment as measured by the overall confidence index (CI) was “less negative” at -11.1 percent in the fourth quarter survey compared to -15.6 percent in the previous tally in the third quarter.
The CES’ CI has been in the negative territory since the first quarter of 2020, during the height of the Covid pandemic, where it reached a peak of -54.4 percent.
The BSP said consumers were less pessimistic in the last quarter of the year because they expect: higher and additional sources of income; more working family members; and more available jobs and permanent employment.
The latest CES, conducted on Oct. 4 to 16, noted that for the first quarter 2025 and in the next 12 months or November 2024 to October 2025, the consumer sentiment also improved. This was due to the following: expectations of higher income; additional sources of income; and more available jobs.
Based on the survey, the consumer confidence across the three component indicators such as economic condition, family’s financial situation, and family income was less pessimistic.
The results are similar in terms of income groups -- low-income, middle-income, and high-income. The low-income group attributed their improved sentiment to the effectiveness of government financial and livelihood assistance such as the Cash-for-Work and other seniors-related programs.
Generally, the BSP said consumers continue to expect a higher interest rate environment, a weaker peso, and a higher unemployment rate. In particular, they expect the peso, currently at the P58-59 level, will depreciate more against the US dollar in the first quarter 2025 and in the next 12 months.
Households also think the country’s unemployment rate could increase in the next quarter and in the next 12 months.
Consumers likewise see the inflation rate further rising in the near term and may even average at 6.2 percent for the next 12 months, which is way above the government target range of two percent to four percent. As of end-November, inflation averaged at 3.2 percent.
What worries consumers about inflation is its effect on: prices of goods; effectiveness of government policies and programs on mitigating price increases; limited supply of goods and services; and higher utility bills.
Meanwhile, the BSP assessed that consumers are less hesitant in making large purchases in the last quarter of 2024 despite increased income. The consumer sentiment on buying big-ticket items such as motor vehicles and house and lot had a CI of -67.3 percent versus -68.9 percent in previous quarter.
The percentage of households with savings has also declined, based on the CES. Households with savings decreased to 25.6 percent during the current quarter compared to 29 percent in the previous quarter. Savers save money for emergencies, health and medical expenses, education, retirement, business capital, investment and to buy a house.
Consumers with loans were unchanged in terms of levels with 25.5 percent of households availing of a loan in the last 12 months, which was similar in the third quarter survey.
The fourth quarter CES covered 5,470 households, of which 51.5 percent were from the National Capital Region (NCR) and 48.5 percent were from areas outside of the NCR.
The high-income group with a monthly salary of P30,000 and above accounted for 42.2 percent of surveyed consumers, followed by the middle-income group with 35.6 percent and the low-income group with 22.2 percent. Salaries of the middle-income group range from P10,000 to P29,999 per month while the low-income group is less than P10,000.