Cautious consumer spending seen this year

MANILA, Philippines — Consumption spending growth in the Philippines is expected to moderate this year as households adopt a more cautious approach on purchases, according to research and analysis firm BMI.

The Fitch Solutions unit said in a report yesterday that it expects household spending growth in the country to ease to 4.5 percent from the previous year’s 4.7 percent.

In real terms, BMI expects household spending to reach P14.1 trillion this year, 26.2 percent higher than 2019 levels.

BMI said consumer sentiment in the country remains sluggish, with confidence in the fourth quarter last year at -22.2, the worst reading since 2021.

“The recent weakness in consumer sentiment is driven by concerns over governmental corruption, spiking inflation and natural disasters,” BMI said.

BMI said its outlook on consumer spending is in line with its gross domestic product (GDP) growth forecast.

Earlier, BMI said it expects the economy to grow by 5.2 percent this year, up from 4.4 percent in 2025.

It said consumption spending is expected to continue to be influenced by elevated inflationary pressures as well as high debt levels and debt servicing costs.

BMI expects inflation to average 3.1 percent this year, higher than the 1.7 percent average last year.

While BMI expects nominal income growth to keep pace with inflation, it said prolonged inflation in food would mean consumers will have to spend more to meet necessities.

It said remittances, which are an important source of income for many households in the Philippines, are also expected to affect spending this year.

“In 2026, the consumer sector faces significant headwinds amid a highly uncertain macroeconomic landscape,” BMI said.

It cited inflation, global trade barriers and potential labor market softening as factors that could affect consumer behavior.

Amid challenges, BMI said consumers are likely to continue their cautious approach to spending and focus more on essential services.