Consumers less inclined to spend, survey shows

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Consumers less inclined to spend, survey shows
Posted: 2:39 AM Feb. 01, 2006
Daxim L. Lucas
Inquirer

FILIPINO consumers have become less inclined to spend their excess cash and are more likely to save it because of lingering concerns on the economy and political stability, according to a consumer confidence survey by AC Nielsen.

The Philippines' consumer confidence index fell "marginally" to 93 points in November 2005 from the time of the previous survey in May 2005, the multination research group said.

"Filipinos are now more conservative in terms of spending money," AC Nielsen managing director Benedicto Cid Jr. told reporters even as he stressed that the results were "relatively unchanged" from the previous poll, "particularly in the areas of job prospects and personal finances."

The regular, global survey is used to gauge consumer sentiment and confidence in the future of different economies by examining spending and saving patterns.

The survey revealed that consumer confidence in the Philippines remained below the global average of 98 points during the poll period. Consumers in India and New Zealand were the most optimistic, garnering 132 and 123 points, respectively. South Korean and Portuguese consumers were the most pessimistic with 62 and 60 points, respectively.

Cid said Philippine consumer confidence took a hit mainly due to concerns on the economy, with an overwhelming 69 percent of respondents expressing their worry over it.

"Rising oil prices and the value-added tax are factors which contributed to this perception in the Philippines," he said.

Respondents in the 10-nation ASEAN region also ranked the economy as their main concerns, specifically Thai, Indonesian and Malaysian respondents.

Aside from the economy, Philippine consumers were also reining in spending because of worries about the country's political stability, the survey showed.

"The Philippines takes first place in terms of political stability concerns," Cid said. "This is because we're all aware how it will affect our lives. The resolution [of political troubles] is important if we want our country to move forward."

The local AC Nielsen chief said the "Hello, Garci" wiretapping controversy, the "Hyatt 10" mass resignation of Cabinet officials, and the ensuing attempt to impeach President Gloria Macapagal-Arroyo -- all of which happened during the run-up to the survey period -- made politics one of the top concerns of Filipino consumers at 42 percent, versus an Asia-Pacific median of 18 percent.

The survey also found that Filipino consumers have also become very conscious about saving their spare cash after all their essential living expenses are covered.

AC Nielsen said 60 percent of Filipinos indicated an "inclination to save" -- the second-highest percentage in the region after the Taiwanese.

This contrasts sharply with government statistics that show the Philippines as having one of the lowest savings rates in the region, with only 24 percent of economic output being put in savings.

This divergence may be explained by the profile of the survey's respondents, which are mainly middle- and upper-income Filipinos with access to the Internet -- presumably groups that have higher disposable incomes and a higher propensity to save.

More than 23,000 consumers were polled over the Internet covering 41 countries in November 2005. In the Philippines, about 500 respondents were surveyed, AC Nielsen said. With INQ7.net

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