Consumption in Philippines
Philippines - Consumption
GDP growth accelerates in the third quarter, defies inflation and rate hikes
GDP growth gained marginal momentum and reached 7.6% year on year in the third quarter, from 7.5% in the second quarter, according to a preliminary reading. Robust private spending outweighed weaker growth in government and fixed investment.
Domestically, household spending growth remained resilient in the quarter, despite easing to 8.0% yoy in Q3 from Q2’s 8.6%. Favorable labor market dynamics (unemployment rate Q3: 5.2%; Q2: 5.7%), pent-up savings and remittances shielded consumers from elevated prices and higher interest rates throughout the quarter. In addition, fixed investment growth largely maintained momentum despite tighter financial conditions and a weakening currency, coming in at 10.1% in Q3, from the 13.6% logged in the prior quarter. In contrast, public spending growth was the slowest since Q1 2021, falling sharply to 0.8% (Q2: +11.1% yoy).
The external sector continued to weigh on the overall reading, with imports growth still outpacing the expansion of exports. Goods and services exports growth hit an over one-year high of 13.1% in the third quarter, picking up from the second quarter's 4.4%. Meanwhile, imports of goods and services growth sped up to 17.3% in Q3 (Q2: +13.8% yoy), marking the best performance in one year. Consequently, the external sector detracted 2.8 percentage points from the overall reading, an improvement from the 4.0 percentage point detraction in Q2.
On a seasonally adjusted quarter-on-quarter basis, economic activity rebounded, increasing 2.9% in Q3, contrasting the previous period's 0.1% fall. Q3's reading marked the best result since Q4 2021.
On the outlook, ING’s senior economist Nicholas Mapa commented:
“[…] 2023 growth could be challenged should current headwinds persist. Meanwhile, the much lower savings rate reported by households suggests that although spending may remain robust in the near term, a sustained drawdown on savings could expose households to shocks at a time when borrowing costs have risen significantly.”
Our panelists project GDP to increase 5.5% in 2023, which is down 0.2 percentage points from last month’s estimate. For 2024, they forecast economic growth of 6.1%.
Philippines - Consumption Data
|Consumption (annual variation in %)||6.4||7.2||6.0||5.8||5.9|
5 years of economic forecasts for more than 30 economic indicators.
Source: National Statistical Coordination Board.
|Bond Yield||4.44||-4.11 %||Dec 27|
|Exchange Rate||50.66||0.02 %||Jan 01|
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January 26, 2023
Merchandise exports declined 9.7% annually in December, contrasting November’s 13.2% upturn.
January 10, 2023
Merchandise exports jumped 13.2% annually in November (October: +20.3% yoy).
January 6, 2023
Inflation inched up to 8.1% in December, above November’s 8.0%.
January 3, 2023
The S&P Global Manufacturing Purchasing Managers’ Index (PMI) rose to 53.1 in December from November’s 52.7.
December 15, 2022
At its 15 December meeting, the Bangko Sentral ng Pilipinas (BSP) met market expectations and raised the overnight reverse repurchase facility rate by 50 basis points to 5.50%, a 14-year high.