Consumer Pulse Q4 2022

The Philippine economy grew at a fast pace, posting a YoY GDP growth rate of 7.6% in the  third quarter. The unemployment rate decreased to 5% in September 2022, the lowest in  more than two years.¹ However, rising interest rates and high inflation represent headwinds facing consumer spending.

Underpinned by strong economic growth, household finances remained stable as more respondents reported same or increased income and same or better financial situations. Improving economy and employment also bolstered consumer outlook — with increased  number of respondents anticipating future income growth and ability to pay loans and bills. 

Consumer sentiment improved in the favorable economic environment, evidenced by a higher percentage of respondents being optimistic about the future of their household finances. However, consumers did plan to cut back some future spending to cope with rising inflation.

Surging inflation may have given rise to increased demand for new credit: The percentage  of consumers seeking new credit has risen for four consecutive quarters. Among those  wanting new credit, an increased percentage of respondents expressed interests in personal loans and lines of credit instead of credit cards. However, rising interest rates were indicated  as a key factor affecting their decisions regarding whether or not to apply for new credit.

¹ Reuters: https://www.reuters.com/markets/asia/philippines-unemployment-hits-new-low-since-start-pandemic-2022-11-08/