Moderate pickup in consumer spending seen

Philippine household consumption is expected to grow slightly for the remainder of the year, according to the Department of Economy, Planning, and Development (DEPDev). Secretary Arsenio Balisacan stated that while there won't be a significant reversal, the recovery will be gradual. Second quarter consumption growth was notably low, with household spending increasing by only 2.8 percent, compared to 5.2 percent in the same period last year and 3 percent in the previous quarter. Balisacan expressed hope that this trend will improve.

Inflation is a key factor affecting consumption. It eased to 6.2 percent in July from 6.4 percent the previous month, bringing the average inflation from January to July to 5 percent, which is above the government's target of 2 to 4 percent. The DEPDev official emphasized that if inflation continues to decline, it could bolster consumption.

Additionally, accelerated public infrastructure spending, which is anticipated to boost private construction activity, could generate multiplier effects across the economy and further stimulate consumption.

Retailers' expectations for the "ber" months, which precede the Christmas season, remain cautious. Philippine Amalgamated Supermarkets Association Inc. executive director Steven Cua explained that supermarkets are not anticipating a substantial increase in sales during this period. He debunked the myth that the "ber" months boost sales, noting that they are typically slow months for retail.

Regarding the upcoming Christmas season, Cua also conveyed a similarly optimistic but reserved outlook, suggesting that while sales may be steady, significant growth is unlikely, particularly for the big retailers. Balisacan highlighted the need for diversified growth drivers beyond consumption and services, including attracting investment, enhancing high-value exports, and revitalizing agriculture and industry to achieve faster and higher quality economic growth.