BMI predicts continued growth in PH consumer spending

Consumer spending in the Philippines is expected to maintain its upward trajectory this year, supported by strong economic growth and easing inflation, according to a new report by BMI, a Fitch Solutions unit.

BMI projects real household spending to rise from 5.0 percent in 2024 to 5.3 percent in 2025, with total spending reaching PHP13.2 trillion this year. The firm’s outlook aligns with expectations of a 6.3 percent GDP growth for the Philippine economy.

"Easing inflationary pressures will provide relief to real household incomes and enable growth in spending," BMI stated. The firm anticipates inflation to settle at 3.3 percent in 2024, within the government’s 2 to 4 percent target range.

Despite the positive outlook, BMI warned of potential risks that could impact consumer spending, including prolonged inflation, lower remittances, and a weakening domestic economy. Geopolitical tensions and high household debt levels were also cited as factors that could affect purchasing power.

Nevertheless, BMI remains optimistic, emphasizing that private consumption will continue to drive economic growth, even amid external challenges.