MANILA - Fewer consumers were optimistic in the first three months of 2018 compared to the previous quarter amid expectations of higher prices of goods, low income and rising household expenses, a central bank study showed on Monday.
The Bangko Sentral ng Pilipinas (BSP) said consumers' confidence index (CI) declined to 1.7 percent in the first quarter from 9.5 percent in the fourth quarter of 2017 based on the results of its consumer expectations survey.
"The lower but positive CI indicates that the number of optimists decreased but continued to outnumber the pessimists," the BSP said.
The central bank also noted that consumer outlook weakened across income groups for the current and next quarters and the year ahead.
Survey respondents expected to spend more on electricity, food, non-alcoholic and alcoholic beverages, fuel, water, and transportation, indicating that inflationary pressures could come from these goods and services, the BSP said.
When asked if this was due to the recent tax reforms, BSP Assistant Governor Francisco Dakila said this was not clear in the survey.
"There's only one respondent who specifically cited the TRAIN (Tax Reform for Acceleration and Inclusion Law). They're just saying higher prices of goods, we don't want to inject our own interpretation into reasons given by survey respondents," Dakila said.
Besides higher prices, consumers also expect interest rates to rise and the exchange rate to depreciate for the year ahead.
Respondents also expect inflation to be at 4.7 percent over the course of the next 12 months, higher than the expected 3.6 percent in the Q4 2017 survey, and above the government’s 2 to 4 percent target range for 2018.
"Consumers may be reacting to what they saw in the first few months, the increases in prices. It remains to be seen how consumers will act later on when they adjust to the prices that they see," Dakila said.
The survey was conducted from Jan. 24 to Feb. 3, with samples drawn from the Philippine Statistics Authority's Master Sample List of Households. - with a report from Michelle Ong, ABS-CBN News