PH consumer confidence at lowest level in Q1 2018 on expected commodity price upticks

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Bangko Sentral ng Pilipinas headquarters in Manila. The central bank’s first quarter Consumer Expectations Survey (CES) for 2018 showed an index of 1.7 percent, down from the previous quarter’s 9.5 percent and year-ago’s 8.7 percent. (Reuters file photo)

MANILA – The Philippine consumers’ confidence dropped to its lowest level in the first quarter of 2018 on expectations of higher prices of goods.

However, monetary officials are confident this will improve in the second quarter as proven in the past surveys.

The result of the central bank’s first quarter Consumer Expectations Survey (CES) for 2018 showed an index of 1.7 percent, down from the previous quarter’s 9.5 percent and year-ago’s 8.7 percent.

Respondents expect prices of basic commodities to rise but Bangko Sentral ng Pilipinas (BSP) Assistant Governor Francisco Dakila Jr., in a briefing Monday, said it is hard to pin this on the tax reform since only one of the 5,569 households nationwide that responded to the survey cited the Tax Reform for Acceleration and Inclusion (TRAIN) law.

“It could be because of the expected higher prices of goods (as a result of the tax reform) but it is still quite early to establish a trend,” he said.

“In the past, respondents cited higher prices as among the reasons for less optimism but the index still improved,” he said.

Other reasons for the decline in consumers’ optimism are low income, rise in household expenses, increase in household debt, occurrence of typhoons and other calamities, and poor harvest.

Respondents expect higher expenditures in the second quarter, particularly on electricity, food, non-alcoholic and alcoholic beverages, fuel, water, and transportation.

In terms of inflation, respondents expect this to increase along with interest rates, and unemployment rates, while the peso is projected to weaken to a dollar.