High inflation hits RP consumer confidence: BSP survey

ABS-CBN News

Posted at Jun 12 2008 07:20 PM | Updated as of Jun 13 2008 03:20 AM

Agence France-Presse

High inflation is likely to dampen consumer spending in the Philippines with fewer families planning to buy houses, cars and appliances in the near term, said an official survey released Thursday.

Consumer confidence dipped in the three months to June "as households feel the impact of oil price increase and global rice crisis," a Bangko Sentral ng Pilipinas (BSP) statement said, citing its quarterly poll of 4,839 households nationwide.

The number of families planning to buy motor vehicles, houses or lots, and consumer durables plunged to 14.7 percent, down 5.7 percentage points from the previous three months and off 5.2 points year-on-year, the poll found.

Just one in five respondents planned to buy a house or a lot in the short term, while just 13.4 percent considered it a good time to buy consumer durables and only 9.5 percent found it a good time to buy vehicles.

"Education expenses were given higher priority at this time over purchases of consumer durables and motor vehicles on account of the start of the enrolment period and the high cost of electricity and fuel," the statement said. Schools opened this week.

Filipino families fear they would have to spend more on basic goods and services "mainly due to expected higher prices", with food, transportation, fuel, electricity, education, and personal care taking up most of their budget.

Consumers believe the peso will be steady against the dollar over the next 12 months, while more families expect the unemployment rate and interest rate to rise, it said.

Inflation spiked to a nine-year high 9.6 percent in May, according to official data.

Some 26 percent of the population of 90 million live on 67 pesos (1.51 dollars) a day or less, according to the latest official estimates.