Consumers optimistic, firms cautious about Q3 amid pandemic

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Metro Manila (CNN Philippines, July 2) — Consumers have more optimism for the third quarter of 2021 compared to the last three months, according to a survey published by the Bangko Sentral ng Pilipinas (BSP) on Friday.

The BSP's latest survey on consumer expectations saw the confidence index (CI) swinging to 1.3% for the third quarter from the previous quarter's -2.2%.

A positive CI means there are more optimistic households than pessimistic ones.

Among the reasons survey respondents cited for their better outlook were more jobs and permanent employment, and improved income.

They also attributed the improved view to "effective" government policies and programs, particularly against COVID-19, which include vaccine availability, provision of financial aid, and relaxation of quarantine rules.

However, survey participants are less optimistic about spending come the third quarter - with the outlook dropping to 25.4% from the previous 29%.

"This suggests that while more respondents continue to expect higher spending on basic goods and services, the number that said so decreased compared to a quarter ago, indicating some moderation in spending among many consumers over the next 3 months," the BSP said.

Businesses less confident

A separate survey for businesses showed firms are less optimistic.

Businesses' CI for the third quarter stood at 31.4% - nosediving from the 42.8% recorded the quarter before.

The BSP said respondents cited the surge in coronavirus infections, return of stricter lockdowns especially in NCR Plus, and higher inflation rate triggered by supply constraints as reasons for the bleaker outlook.

It added that businesses also flagged the "usual slack" in power demand and construction materials during the rainy season for their tempered expectations come the third quarter.

Still, the poll showed more businesses are eyeing expansion in the third quarter. The percentage of firms planning wider operations climbed to 21.1% from 20.6% - driven by the subsectors of electricity, gas, and water, along with agriculture, fishery, and forestry.