BMI Forecasts Robust Growth in Philippine Consumer Spending

MANILA – BMI, a subsidiary of Fitch Solutions, anticipates a robust increase in consumer spending throughout the current year, fueled by the country’s strong economic performance. The firm projects a rise in real household spending from 5.0 percent in 2024 to 5.3 percent in 2025, according to a report released on Thursday. BMI estimates that household spending will reach PHP13.2 trillion in real terms this year, aligning with their forecast of a 6.3 percent growth in the Philippine economy. The report highlights that declining inflation rates are expected to enhance household spending. Despite potential drags from weakening external demand on the GDP, BMI remains optimistic about private consumption, expecting it to grow by 5.3 percent. The firm notes that easing inflationary pressures will bolster real household incomes, facilitating increased spending. BMI predicts inflation will stabilize at 3.3 percent this year, within the government’s target range of 2 to 4 percent. However, the outlook for consumer spending faces risks such as sustained high inflation, reduced remittances, and a faltering domestic economy. These factors could undermine household purchasing power, while geopolitical tensions pose additional risks to inflation and interest rates. BMI also warns that high levels of household debt could pose a threat to its consumer spending projections.