Consumer confidence more pessimistic in Q4 2021, but more optimistic for Q1 2022 and the next 12 months

Based on the Q4 2021 survey results, consumer sentiment in the country was more pessimistic as the overall confidence index (CI) declined to -24 percent from –19.3 percent in Q3 2021. The lower negative index recorded in Q4 2021 showed that the number of households with pessimistic views increased relative to the number in Q3 2021 and continued to surpass those with optimistic views. According to respondents, their weaker outlook during Q4 2021 was brought about by their expectations of: (a) higher unemployment rate, (b) low income, (c) ongoing COVID-19 pandemic, higher cases, and restrictions/lockdown/travel ban, (d) faster increase in the prices of goods, and (e) less working family member.

Meanwhile, consumer sentiment for Q1 2022 and the next 12 months improved as the CI increased to 9.3 percent and 23.6 percent from the Q3 2021 survey result of 2.7 percent and 18.6 percent, respectively. Respondents attributed their optimism to the following expectations: (a) availability of more jobs and permanent employment, (b) additional and high income, (c) effective government policies and programs, and (d) good governance.

The more pessimistic consumer sentiment in Q4 2021 was reflected across the three component indicators of consumer confidence, with the economic condition recording the lowest CI, followed by family financial situation and family income. Consistent with the national trend, consumer confidence across income groups also weakened in Q4 2021. Aside from the reasons cited for the more pessimistic outlook in Q4 2021, consumer confidence of respondents in the high-income group waned amid concern about their job security.

The households’ spending outlook on goods and services for Q1 2022 was less upbeat as the CI declined to 29.6 percent from 31.4 percent in the Q3 2021 survey result.

The percentage of households in the country that considered Q4 2021 as a favorable time to buy big-ticket items was broadly steady at 13.4 percent relative to the index a quarter ago. Meanwhile, the percentage of households in the country that considered the next 12 months as a favorable time to buy big-ticket items grew to 5.1 percent from 4.1 percent in the Q3 2021 survey result.

In Q4 2021, the percentage of households with savings rose to 30.2 percent from 25.2 percent in Q3 2021.

The Q4 2021 survey results showed that consumers anticipated that interest rates may increase in Q4 2021, Q1 2022, and the next 12 months. The peso is expected to depreciate in Q4 2021 and Q1 2022, but may appreciate in the next 12 months. Moreover, they also anticipated that the unemployment rate may rise in Q4 2021 but may decline in Q1 2022 and the next 12 months. Households anticipated that the rate of increase in commodity prices will remain within the government’s inflation target range of 2 to 4 percent for 2022—at 3.2 percent for the next 12 months.

In Q4 2021, 96 percent of the 325 OFW household respondents indicated that remittance proceeds were used to purchase food and other household needs.

In Q4 2021, about 1 in every 4 households, or 24.2 percent, availed of a loan in the last 12 months, higher than the 22.6 percent recorded in Q3 2021. For respondents who found it difficult to apply for a loan, reasons cited include: (a) too many/difficult to complete requirements, (b) long processing time, and (c) difficulty of finding a willing lender and co-maker.

The Q4 2021 CES was conducted during the period 1 – 13 October 2021.^[1] In Q4 2021 CES, 5,665 households were surveyed – 2,802 (49.5 percent) were from the NCR and 2,863 (50.5 percent) from the AONCR.

Of the said sample size, 5,495 households responded to the survey, equivalent to a response rate of 97 percent (from 98.1 percent in the Q3 2021 survey). Respondents consisted of 2,721 households in the NCR (with 97.1 percent response rate) and 2,774 households in the AONCR (with 96.9 percent response rate). The middle-income group comprised the largest percentage of respondents (40.9 percent), followed by the low-income group (32.3 percent) and the high-income group (26.8 percent).

Full report: https://www.bsp.gov.ph/Lists/Consumer%20Expectation%20Report/Attachments/20/CES_4qtr2021.pdf

^[1]Approval for the conduct of the Q4 2021 CES was issued on 10 January 2019 through PSA Approval No. BSP-1901.