BMI Country Risk & Industry Research, the research division, forecasts an upsurge in consumer spending in the Philippines by 6.3 percent in 2024, totaling around P12.8 trillion. This revised projection surpasses the earlier estimate of six percent, which amounted to P12.7 trillion. Concurrently, consumer spending for the ongoing year is expected to escalate by 5.5 percent, reaching P12 trillion. This projected increase is linked to various factors such as an optimistic economic forecast, a stabilised employment landscape, and reduced inflationary pressures.
The entity emphasised the encouraging outlook for consumer spending in the Philippines, citing expectations of an economic rebound and the expected return to typical consumption patterns in the following year. It was also claimed that continuous economic expansion would reinforce actual consumer expenditure, consistent with the Country Risk team’s projection of a 6.2 percent authentic growth rate for the economy in 2024.
Notwithstanding these favourable signs, BMI recognized the hurdles presented by enduring inflationary pressures and elevated levels of debt, impacting the ability to purchase and spend. Nevertheless, it underscored that the robust labour market and the gradual decline in inflation would assist in reinforcing expenditure. This improvement is expected to facilitate a positive increase in real wages, consequently augmenting purchasing power.
BMI cautioned that although they anticipate a reduction in inflation from 6.1 percent in 2023 to an average of four percent in 2024, they highlighted a concern that persistently high inflation might diminish household purchasing power. Moreover, the research unit emphasised the pivotal role of a stable labour market, particularly in the service sector, in upholding the growth of consumer spending. Moreover, BMI emphasised the importance of the Philippines’ heavy dependence on imports and the possible consequences of a depreciating peso on import expenditures. Despite the potential challenges arising from higher import costs, BMI affirmed that the ongoing economic growth and potential measures to alleviate inflation would help maintain the stability of consumer spending throughout 2024.
The assessment concluded that despite the potential risks associated with higher-than-expected inflation and notable economic weaknesses, the forecast for consumer spending in the Philippines in 2024 remains promising. The anticipated reduction in inflationary pressures and the strong employment scenario are foreseen as key pillars supporting a steady trajectory in consumer spending within the nation.
