Australian research reports that private consumption in the Philippines sets it apart in a region with a lighter spending.
Trader ANZ Research said in a fourth-quarter report that household consumption accounts for more than 70% of GDP, but “the growth of borrowing (i.e. mortgages) by assets created is relatively heavy, with households’ focus on income outlooks falling. This spending model is unhealthy.”
ANZ said domestic demand across the Asian economies has weakened, hindering growth, but the Philippines stands out.
“Except for the Philippines, private consumption impulses or flows of new consumption relative to GDP have remained static or remained static in most economies,” it said.
Philippines GDP grew 5.5% in the second quarter and was supported by accelerated agricultural production and household spending.
family fiNAL consumption expenditure rose 5.5% during this period.
ANZ Research labels slow retail and car sales as “frequency indicators” of weaker domestic demand in the region.
“As we have emphasized in the past, the nature of the job-creating pandemic is concentrated in low-paying jobs in segments such as food and accommodation, which in turn affects consumption,” added ANZ Research.
Sentral Ng Pilipinas of Bangkok, citing preliminary data, reported that consumer loans rose 11.8% in July, slowing from 12.1% a month ago.
Meanwhile, credit card loans in July rose 29.2% from 29.9% in June. – Aubrey Rose A. Inosante
