PH Consumers’ Revenge Spending Phase Over

A think tank based in the UK called the Pantheon Macroeconomics has said that according to the data of the Philippine Statistics Authority (PSA), “consumers had a stonking start to 2022,” but “revenge spending” of the locals has come to a head at the beginning of the year. 

Mr. Miguel Chanco, chief emerging Asia economist of Pantheon Macroeconomics has mentioned that the 8.3 GDP or gross domestic product of the Philippines in Q1 of 2022 was better than expected and “showed a resilience in private consumption.”

However, Mr. Chanco also noted that “what’s good for the first quarter isn’t necessarily great for the second quarter, especially now that we know with more certainty that catch-up growth in household spending is well and truly over.”

Mr. Chanco infers that although domestic manufacturers had a year-on-year growth in their net sales volume in April, a slowdown was seen month-on-month. He goes on to mention that “the support that remittances have given over the last nine months or so eventually will subside, as the additional year-over-year lift provided by the peso’s depreciation comes out of play,”

While money sent home by OFWs are still steady, the yield from the US dollar – Philippine peso exchange can possibly slow down by the end of 2022. 

He referenced the latest consumer sentiment survey results conducted by the Bangko Sentral ng Pilipinas (BSP) which he states “the medium- to long-term outlook for spending continues to improve, but consumers still are a long way from their previous form.”

According to Mr. Chanco’s computations, the number of Filipino household savings was up in Q4 2021 at 31.2% but dipped to 29.6& during Q1 of 2022. 

Source: Inquirer