Consumer sentiment fell to record low in Q3, business confidence worst in 10 years -BSP survey

Consumer sentiment fell to a record low in the third quarter while the confidence of the business sector posted a negative performance for the first time in 10 years, results of the latest survey of the Bangko Sentral ng Pilipinas (BSP) showed.

According to the results of the Consumer Expectation Survey (CES), the overall confidence index (CI) fell to a record low of -54.5% in July to September.

This is the lowest CI since the nationwide surveys were conducted starting in the first quarter of 2007.

A positive index indicates that the optimists outnumbered the pessimists, while a negative index signifies that pessimists outnumbered optimists.

Similarly, results of the Business Expectations Survey (BES) showed that the overall confidence index (CI) fell to -5.3% during the quarter.

This is the first negative CI after posting 43 quarters of positive confidence since the index was recorded at -2.6% in the third quarter of 2009.

"This is expected considering the effects of COVID-19 on business," BSP governor Benjamin Diokno told reporters on a virtual briefing.

Consumers attributed their negative sentiment mainly to the pandemic. Other reasons noted were the high unemployment rate and less working family members, low and reduced income, and the faster increase in the prices of goods.

Consumer pessimism continued for the fourth quarter of 2021, as the CI moved into negative territory at -4.1% with concerns stemming from high unemployment, low and reduced income, and the faster increase in prices of goods.

The CES was conducted on July 1 to 14, with samples drawn from the master sample of households of the Philippine Statistics Authority (PSA). It had a total of 5,563 households surveyed.

Meanwhile, for businesses, the pessimism came from the impact of the quarantine restrictions, the decrease in orders and sales, and the slowdown or temporary shutdown in operations.

Businesses also expressed concerns over government policies, primarily on the perceived insufficient mitigation measures to counter the impact of the pandemic.

This spilled into the next quarter with the CI declining to 16.8%, associated mainly with the expectations of the continuing negative effects of the pandemic.

The BES was conducted from July 8 to September 10, with a total of 1,517 firms surveyed. Samples were drawn from the Top 7,000 Corporations ranked based on total assets in 2016 from the Bureau van Dijk database.—AOL, GMA News