Spending rebounds on interest cuts, polls

Downward interest rates and sustained economic growth, supported by election-related spending, boosted a still weak private consumption in the Philippines in the second quarter of 2025, according to global financial giant Visa.

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According to Visa Business and Economic Insights’ Asia-Pacific spending momentum index (SMI) for July 2025, “Vietnam and the Philippines registered notable gains, supported by strong economic growth and accommodative policy environments” during the April-to-June period.

It was in the second quarter when the Philippines held its May midterm elections, which economists have regarded as a perennial growth booster despite waning contributions to gross domestic product (GDP).

Also, since the start of its monetary easing cycle in August last year, the Bangko Sentral ng Pilipinas (BSP) has already lowered key interest rates by a total of 125 basis points (bps) to date. In June, the BSP’s policy-setting Monetary Board further cut the policy rate by 25 bps to the current 5.25 percent.