Nielsen: PH consumer confidence slides to 3rd globally

MANILA, Philippines – Despite posting a quarter-on-quarter decline, the Philippines still ranked third globally as home to the world’s most confident consumers in the third quarter of 2015, according to the latest Nielsen Global Survey of Consumer Confidence and Spending released Tuesday, November 3.

In the second quarter this year, Filipino consumers were the most confident in Southeast Asia and the second most optimistic in the world.

Despite posting a quarter-on-quarter decline of 5 points to a Consumer Confidence Index score of 117, the year-on-year trend for the Philippines was up two points, Nielsen said.

After the Philippines, Indonesia closely follows as the market with the fourth most confident consumers, with a score of 116, dropping 4 points from the second quarter and down 9 points year-on-year.

Thailand (ranked fifth globally) is flat quarter-on-quarter with 111 and down marginally (two points) compared to the same quarter a year ago.

Vietnam ranked tenth globally with a Consumer Confidence Index score of 105, up one point quarter-on-quarter and up 3 points year-on-year.

Consumer confidence though across a number of Southeast Asia markets has taken dips in the third quarter of the year, Nielsen said.

Malaysia: Steepest decline

Meanwhile, Malaysia, which posted the region’s lowest Consumer Confidence Index (78), also posted the region’s steepest decline, down 11 points quarter-on-quarter and 21 points year-on-year, “largely driven by consumers’ concern around currency devaluation and rising food prices,” Nielsen said.

The Nielsen consumer confidence index measures perceptions of local job prospects, personal finances, and immediate spending intentions among more than 30,000 respondents with Internet access in 611 countries.

Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

Recessionary sentiment

Globally, consumer confidence rose slightly to 99 in the third quarter of 2015, up 3 points compared to the previous quarter this year. (See chart 1.)

Recessionary sentiment among Filipino consumers is down by one percentage point (pp) along with Singaporeans (-5pp) and Vietnamese (-3pp).

In contrast, recessionary sentiment is rising in Malaysia (+16pp), Indonesia (+10pp), and Thailand (+8pp).

In this round of the global survey, job security, work/life balance, and health feature prominently in the Filipino consumers’ list of key concerns. (See chart 2.)

“The country’s robust economy continue to keep the consumers’ confidence in the Philippines bullish,” said Stuart Jamieson, Nielsen managing director in the Philippines.

Nielsen noted that the growing recessionary sentiments across other Southeast Asia markets failed to dampen the optimism, only reflecting the same level of positive sentiment at 80% when it comes to the state of their personal finances and 75% positive outlook on local job prospects in the next 12 months.

“These figures are well above the global averages of 58% and 50% respectively,” it added.

Financial security

Similar with the consumers in Southeast Asia, Filipino consumers continue to give financial security top priority.

Close to 7 in 10 respondents in the Philippines (67%) put their spare cash into savings, while 30% invest in shares of stock or mutual fund.

Discretionary purchase intentions high on the priority shopping list of consumers in the Philippines include spending on new clothes, and holidays/vacations (see chart 3).

“Quarter after quarter, consumers are consistent in their desire to build a nest egg for the future,” Jamieson said.

“After they’ve channeled money in savings or investments, consumers look into spending on holidays, new clothes, home improvements, technology and out of home entertainment.” – Rappler.com