Business outlook upbeat for the next 12 months, but consumer confidence sours

MANILA, Philippines — Businesses have an upbeat outlook for the next 12 months, but the same cannot be said for consumers. 

In a report released by the Banko Sentral ng Pilipinas (BSP) on Friday, it found that the business sentiment in the Philippines is optimistic for the third quarter of the year. The overall confidence incidence (CI) for businesses rose to 32.9% in the third quarter of 2024, up from 32.1% in the second quarter.

“For the next 12 months, business outlook was similarly more upbeat as the overall CI increased to 58 percent from 56.5 percent in the Q2 2024 survey results,” the BSP said in a statement.  

The more optimistic outlook could be attributed to sustained strong demand for products and services, business expansions, lower inflation, and the launch of new products. 

Consumer CI improved slightly in the third quarter but remained negative, rising from -20.5% in the second quarter to -15.6% in the third quarter.

While consumer CI improved, consumer CI is not as optimistic for the next 12 months. 

“The consumer confidence for the next 12 months was less optimistic as the CI declined to 9.9% from 13.5% in Q2 2024,” the BSP said. 

The lower consumer confidence was attributed to faster increase in the price of goods and services, fewer available jobs, lower income, and perceived corruption in government. 

“Consumer outlook for Q3 2024 was less pessimistic for the country’s economic condition and the family’s financial situation, and little changed for family income,” the BSP said. 

For the consumer CI, 5,000 households were surveyed between July 1 and 12, 2024, while the business CI was based on responses from firms selected from the top 7,000 corporations ranked in the Bureau van Dijk database.