Consumer confidence improves in Q1 2022

Consumer sentiment in the country was less pessimistic in Q1 2022, as the overall confidence index (CI) increased to -15.1 percent from -24 percent in Q4 2021.

The higher CI, albeit remaining negative, indicated that the number of households with optimistic views increased, but was still lower than those with pessimistic views.

According to the respondents, their improved outlook during Q1 2022 was brought about by their expectations of:

(a) availability of more jobs and permanent employment;

(b) additional and high income; and

(c) effective government policies and programs, such as the easing of quarantine restrictions, availability and rollout of vaccines, and provision of financial assistance.

For Q2 2022, consumer sentiment was less positive as the CI declined to 6.4 percent from 9.3 percent in Q4 2021.

Respondents’ less upbeat sentiment for Q2 2022 stemmed from their concerns about:

(a) the faster increase in the prices of goods;

(b) low to no increase in income; and

(c) high unemployment rate.

Meanwhile, consumer sentiment for the next 12 months improved as the CI increased to 30.4 percent from 23.6 percent in Q4 2021.

Respondents attributed their brighter year-ahead outlook to expectations of:

(a) more available jobs;

(b) additional and high income;

(c) good governance; and

(d) salary increase.

In Q1 2022, consumer outlook improves across the three component indicators and across income groups. The sentiment improved in Q1 2022 as a less pessimistic outlook was observed across the three component indicators of consumer sentiment, namely, country’s economic condition, family’s financial situation, and family income.

Consistent with the national trend, consumer confidence across all income groups also improved in Q1 2022.

Aside from the aforementioned reasons cited for the less pessimistic outlook in Q1 2022, consumer confidence for the low- and high-income groups improved as they anticipated more harvest and additional working family members, respectively.

Consumer spending is more upbeat for Q2 2022. The households’ spending outlook on goods and services for Q2 2022 was more upbeat as the CI increased to 40.4 percent from 29.6 percent in Q4 2021.

Buying sentiment in Q1 2022 is less buoyant, while, buying intentions for big-ticket items over the next 12 months remained steady. The percentage of households in the country that considered Q1 2022 as a favorable time to buy big-ticket items decreased to 12.4 percent from 13.4 percent in Q4 2021.

Further, the percentage of households in the country that considered the next 12 months as a favorable time to buy big-ticket items remained steady at 5.7 percent from 5.1 percent in Q4 2021.

The percentage of households with savings increases slightly in Q1 2022. In Q1 2022, the percentage of households with savings increased marginally at 31.1 percent from 30.2 percent in Q4 2021.

Consumers expect unemployment to decline, interest rates to rise and the peso to depreciate in Q1 2022; Inflation to breach the target range of 2 to 4 percent. The survey results showed that consumers anticipated that interest rates may increase in Q1 2022, Q2 2022, and the next 12 months. The peso is expected to depreciate in Q1 2022, Q2 2022, and the next 12 months.

Moreover, they also anticipated that the unemployment rate may decline in Q1 2022, Q2 2022, and the next 12 months. Households anticipated that the rate of increase in prices of consumer goods and services will breach the upper end of the government’s inflation target range of 2 to 4 percent for 2022—at 5.5 percent for the next 12 months.

The number of OFW households that either set aside their remittances for savings or invested a portion of their remittances increases in Q1 2022. In Q1 2022, 38 percent of the 321 OFW household respondents indicated that remittance proceeds were used for savings, while
10.9 percent apportioned their remittances for investments.

About 1 in every 4 households availed of a loan in the last 12 months. In Q1 2022, 25.8 percent availed of a loan in the last 12 months, higher than the 24.2 percent recorded in Q4 2021. For respondents who found it difficult to apply for a loan, reasons cited include: (a) too many or difficulty in completing requirements, (b) income is too low to support loan application, and (c) lack of collateral.

The Q1 2022 CES was conducted during the period 21 – 31 March 2022.^[1] In Q1 2022 CES, 5,282 households were surveyed – 2,720 (51.5 percent) were from the NCR and 2,562 (48.5 percent) from the AONCR.

Of the said sample size, 5,175 households responded to the survey, equivalent to a response rate of 98 percent (from 97 percent in the Q4 2021 survey). Respondents consisted of 2,666 households in the NCR (with 98 percent response rate) and 2,509 households in the AONCR (with 97.9 percent response rate). The middle-income group comprised the largest percentage of respondents (40.1 percent), followed by the high-income group (33.5 percent) and the low-income group (26.4 percent).

^[1]Approval for the conduct of the Q1 2022 CES was issued on 11 January 2022 through PSA Approval No. BSP-2169.