The consumer sentiment in the country was more pessimistic in Q3 2022 as the overall confidence index (CI) declined to -12.9 percent from -5.2 percent in Q2 2022. The decline in the index in Q3 2022 relative to the previous quarter indicates that the number of households with pessimistic views increased and continued to outnumber those with optimistic views.
The weaker confidence among consumers was largely due to their concerns over the: (1) faster increase in the prices of goods and higher household expenses, (2) low income, and (3) fewer available jobs and working family members.
Meanwhile, the sentiment of consumers was more optimistic for Q4 2022 and the next 12 months as the CIs increased to 13.4 percent (from 11.2 percent) and 33.4 percent (from 32.4 percent), respectively. The improvement in confidence among consumers is attributed to their expectations of: (1) more available jobs, (2) additional income, (3) good governance, (4) effective government policies and programs by the new administration for agriculture, education, and economic recovery from COVID-19, and (5) the provision of pension and financial assistance.
In Q3 2022, consumer sentiment weakens across the three component indicators and across income groups.
The more pessimistic consumer outlook in Q3 2022 was reflected across the three component indicators of consumer confidence, with the family financial situation recording the lowest CI, followed by economic condition and family income.
Consistent with the national trend, consumer confidence across all income groups (low-, middle- and high-income groups) also weakened in Q3 2022. Aside from the reasons previously cited for the more pessimistic outlook in Q3 2022, high-income consumers were also worried about the continuing public health risk posed by the COVID-19 pandemic and its possible adverse impact on the economy.
By geographical location, the consumer confidence in both the National Capital Region (NCR) and Areas Outside the NCR (AONCR) was more pessimistic in Q3 2022, which is consistent with the national trend. In addition to the reasons earlier cited by consumers for their more pessimistic outlook in Q3 2022, respondents in AONCR attributed their weaker confidence to their concerns over the ongoing travel and social gathering restrictions and the uptick in the country’s COVID-19 caseload.
Buying intentions for big-ticket items decline in Q3 2022.
The percentage of households in the country that considered Q3 2022 as a favorable time to buy big-ticket items fell to 14 percent from 15.2 percent in Q2 2022.
The percentage of households with savings in the Philippines decreases in Q3 2022.
In Q3 2022, the percentage of households with savings in the nation declined to 27.5 percent from 29.7 percent in Q2 2022.
Consumers expect the unemployment rate may decline, interest rates may rise and the peso may depreciate in Q3 2022; Inflation may breach the target range of 2 to 4 percent.
Consumers anticipated that interest rates may increase, the peso may depreciate against the U.S. dollar, and the unemployment rate may decline in Q3 2022, Q4 2022, and the next 12 months.
Households also expected that the rate of increase in the prices of consumer goods and services may rise in Q3 2022 and for Q4 2022. This stemmed from their concerns over: (1) higher household spending for food, utilities and other commodities, (2) limited supply of goods and services, and (3) depreciation of the peso against the U.S. dollar.
However, households expected that inflation rate may ease for the next 12 months due to the following factors: (1) effective government policies and programs, (2) sufficient supply of goods and services, (3) lower household spending on food, (4) appreciation of the peso, and (5) positive developments in the COVID-19 situation.
In particular, consumers expected that the inflation rate may settle slightly above the upper end of the government’s inflation target range of 2 to 4 percent for 2022 and 2023 — at 4.1 percent for the next 12 months.
About 1 in every 4 households availed of a loan in the last 12 months.
In Q3 2022, 24.9 percent availed of a loan in the last 12 months, slightly higher than the 24.7 percent recorded in Q2 2022.
About the Survey
The Q3 2022 CES was conducted during the period 1 to 13 July 2022.[1] In Q3 2022 CES, 5,546 households were surveyed — 2,806 (50.6 percent) were from the NCR and 2,740 (49.4 percent) from AONCR.
Of these households, 5,407 participated in the survey, equivalent to a response rate of 97.5 percent (from 97.2 percent in the Q2 2022 survey). Respondents consisted of 2,738 households in the NCR (with 97.6 percent response rate) and 2,669 households in AONCR (with 97.4 percent response rate). The middle-income group comprised the largest percentage of respondents (44.1 percent), followed by the high-income group (29.2 percent) and the low-income group (26.7 percent).
[1]Approval for the conduct of the Q3 2022 CES was issued on 11 January 2022 through PSA Approval No. BSP-2169.
