MANILA – Filipinos grew more optimistic in the second quarter of the year, even as the outlook among their Asean neighbors turned bearish.
In its latest survey, Nielsen said consumer confidence in the Philippines climbed 4 points to 120, making Filipinos the third happiest consumers in the world.
Consumer sentiment is important for a country like the Philippines where household spending is responsible for two-thirds of the economy. Consumer spending, which expanded by 5.8 percent year-on-year, helped prop up Philippine gross domestic product (GDP) growth in the first quarter of the year.
Nielsen's poll mirrors a similar survey done by the Bangko Sentral ng Pilipinas (BSP) that showed consumer confidence turning less bearish in the April to June period. In that survey, respondents were upbeat about the economy and their incomes.
Begun in 2005, the Nielsen Global Survey of Consumer Confidence and Spending Intentions measures consumer confidence, major concerns, and spending intentions among more than 30,000 respondents with Internet access in 60 countries. Confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.
Indonesians remain the second happiest with a score of 123, but this dropped by a point from the first quarter. Confidence also dropped, if not stayed in negative territory, in the 4 other Asean countries included in the global survey.
Thailand led the bearish lot, with confidence dropping 3 percent quarter-on-quarter to 105, as political instability gripped Bangkok.
The outlook in Vietnam and Singapore also turned gloomier, with the index dropping a point each to 98. Malaysians however were less bearish in the second quarter, with the index climbing a point to 93.
Nielsen said job security, work life balance, and health are top of mind among Filipinos, whereas political stability and costlier food were key concerns among other Southeast Asian consumers (see chart below).
TOP 5 MAJOR CONCERNS OVER THE NEXT 6 MONTHS
“The Philippines is showing quarter-on-quarter increase in consumer confidence which is largely driven by a strong economy and its growing middle class population,” said Nielsen Philippines managing director Stuart Jamieson.
In the BSP survey mentioned earlier, jobs and the state of household finances also figured prominently as a major concern among respondents. The concern over jobs and incomes persist despite the drop in the unemployment and underemployment rates in the first quarter of this year.
This concern for jobs and finances is reflected in the cautious spending among Filipinos. Despite their optimism, consumers polled by Nielsen remain prudent with their finances, saving their spare cash after covering essential expenses (see chart below).
TOP AREAS CONSUMERS ARE ALLOCATING THEIR SPARE CASH
In terms of how they spend their money, Filipinos limit spending on new clothes, and keep watch of the amount they spend on gas and electricity. They also would rather put off an upgrade in their technology gadgets (see chart below).
TOP 3 ACTIONS TAKEN TO SAVE ON HOUSEHOLD EXPENSES
“Although more Filipino consumers are joining the ranks of the middle class, these consumers have a strong focus on saving for household emergencies, health issues and the future in general. They are more aware of how they manage their day-to-day and long-term financial goals,” said Jamieson.
“To be able to tap into the expanding but financially-conscious middle class Filipino consumers, marketers should develop a range of products and services which will provide good value for money," he said.
Arnold S. Tenorio
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994.