CONSUMER spending is expected to continue to grow this year, driven by strong economic growth, according to BMI, a Fitch Solutions unit.
“We hold a positive outlook for consumer spending in the Philippines, with an acceleration in real household spending growth – from 5.0 percent in 2024 to 5.3 percent in 2025,” BMI said in a report released Thursday, February 6.
BMI said that in real terms, household spending is projected to grow to P13.2 trillion this year.
According to BMI, the forecast is in line with expectations that the Philippine economy will grow by 6.3 percent this year.
BMI said easing inflation will boost household spending this year.
“A deteriorating external demand will likely be a drag on the Philippines’ GDP (gross domestic product). However, the private final consumption expenditure will be positive, with growth of 5.3 percent expected. This is an acceleration from the 5.0 percent growth seen in 2024,” said BMI.
“Easing inflationary pressures will provide relief to real household incomes and enable growth in spending,” it added.
BMI expects inflation to settle at 3.3 percent this year, which is still within the government’s 2 to 4 percent target.
According to BMI, risks to the consumer spending outlook include prolonged and elevated inflation, lower remittances and a weakening of the domestic economy.
“These risk factors will adversely affect household purchasing power, while geo-political tensions have also emerged as a risk that is likely to impact inflation and interest rates,” it said.
BMI added that a high level of household debt also remains a risk to its consumer outlook. (PNA)
