RP's upper, middle classes not yet 'severely' hit by rising prices

ABS-CBN News

Posted at Jun 04 2008 10:56 PM | Updated as of Jun 05 2008 06:56 AM

The Philippines’ upper and middle-class consumers still have not been hard hit by rising prices of rice and fuel, according to a recent survey by Nielsen, a global marketing firm.

"As of early May, the upper and middle-class consumers were largely still not severely affected by the rising prices," Benedicto Cid Jr., managing director of the Nielsen Co. (Phils.) Inc., told reporters Wednesday.

But he added "things could change" if there is a "sudden high-profile development" such as much steeper fuel and rice prices.

A total of 523 Philippine respondents were interviewed via the Internet from April 21 to May 6, 2008.

They were part of a global consumer confidence survey covering 28,253 respondents interviewed over the Internet in 51 countries or territories. The margin of error for a 500-sample survey is plus/minus 4.4%.

At the time of the survey, prices of diesel had gone up at least P7 per liter--from P34.45 in May 2007 to P41.94 in May 2008.

PresentationRP's upper, middle classes not yet hard hit by rising prices

Since the upper and middle classes have bigger spending power compared with the lower income classes, Cid said the increases in oil prices do not mean an emptying of their pockets.

However, Cid said the upper and middle classes are becoming "more cautious" especially since media has been reporting more about a global food crisis and non-stop rises in crude oil prices.

"They see prices going up and they know somebody is suffering," he said.


Drop in confidence
The Philippines’ consumer confidence dropped significantly in the first half of 2008, but it was still nine points "above the global average" of 88.

Confidence fell in 39 out of 48 countries, and the global drop by six points to 88 is the "largest decline in the last three years."

"Influenced probably by the high visibility of rising prices of food and fuel, and news of economic recession in the West, consumers are less confident than before," the survey said.

"Globally, over half of consumers (56%) already believe their own countries are in economic recession, driven by US and European consumers," Nielsen said.

The survey said the "Philippines is among the countries that have most respondents saying their country is already in recession" even if economic figures show otherwise. Sixty-one percent of Filipino respondents said the economy was already in a recession.

The economy grew by 5.2 percent in the first quarter of 2008, down from 7.4 percent in the last quarter of 2008.

The survey also showed that globally, the economy is the biggest concern of consumers, followed by balance between work and life, and health.

In the case of Filipino consumers, Cid said "worklife balance is the biggest concern" followed by job security.

He said this showed that "all that work is leading to a lack of balance" between work and family.


Less concern about instability
The survey results also showed that Filipino consumers are "less jittery" about political instability.

"There is less concern today about civil conflicts being triggered by an economic downturn, perhaps, reflecting greater confidence in our ability to resolve things peacefully," Cid said. He said the Manila Peninsula siege last November was an indication of this. -- Isagani de Castro, Jr., abs-cbnNEWS.com/Newsbreak