Uneven growth for consumption

With inflation on a downtrend, one would assume that Filipino consumers would likely open their wallets and spend more.

- MARIANNE GO

Apparently not, as research appears to show that Filipino spending patterns are now affected by different generational outlooks, competitive pressures, disinflation, spending leakages and even the evolving global tariff structure.

Research by the Metrobank Group's First Metro Securities Brokerage Corp. as of August this year has a more nuanced reading of Philippine consumers even as the inflation outlook shows a downward trajectory, with the latest government data confirming that headline inflation fell from 1.4 percent in June to 0.9 percent in July.

Thus, the average inflation for the first seven months of the year is at 1.7 percent, below the government's inflation target range of two to four percent.

The Bangko Sentral ng Pilipinas reported that non-food inflation eased due to the slower inflation for electricity, gas and other fuels, and downward adjustments in prices of some petroleum products.

Meanwhile, food inflation fell as rice and vegetable prices continued to decline. Rice prices decreased, driven mainly by lower international rice prices, sufficient supply and direct government measures to stabilize prices.

Of course, the low inflation that we are currently experiencing is not expected to last, as the BSP has already pencilled in a higher inflation rate range for 2026 and 2027.

The unemployment rate, research showed, continues to improve post-COVID, while underemployment figures have similarly declined. More people are being employed, indicating the availability of jobs to absorb a rising labor pool.

Based on First Metro Securities' research, wage growth increased 24.4 percent compared to pre-COVID levels. This compares to the 24 percent growth in inflation during the same period.

Consumer confidence remains optimistic even though business confidence fell in the second quarter this year due to concerns over the political uncertainty stemming from the impeachment attempt against the vice president.