MANILA, Philippines – Almost half of Filipino consumers feel their household purchasing power remains unchanged since 2013. This is despite government figures – the latest being the 6.1% growth in gross domestic product in 2014 – that show buoyant domestic consumption fueling the country’s economic activities.
According to results of the Kantar Worldpanel Philippines’ consumer panel survey in December 2014, 48% of Filipino consumers feel that their household purchasing ability is no different from that of 2013.
Meanwhile, 27% said their purchasing power has improved, while 24% said otherwise.
These insights were reflective of fast moving consumer goods (FMCG) sales in 2014 that only grew by less than 1% (-0.02%), Kantar said Monday, February 16.
Kantar Worldpanel Philippine’s regular consumer panel survey tracks the shopping behavior of 3,000 homes in urban and rural areas across the country.
Across classes, class D& E homes were slightly less optimistic, with 25% and 24% of those surveyed viewed that their purchasing ability has diminished compared to 2013.
Of class ABC homes, 19% believed their buying power has lessened.
Top consumer concerns
Rising food and commodity prices is the topmost concern at 61%, the survey said.
The National Economic and Development Authority (NEDA) noted that year-on-year food inflation in December slowed to 5.5% from 6.5% in the previous month. This was mainly due to high food prices in the same period of 2013 partly arising from Super Typhoon Yolanda (Haiyan) that hit the country in November 2013.
High cost of electricity or water (10.4%) is the second topmost concern among Filipino consumers, Kantar noted.
With typhoons such as Ruby and Yolanda that have devastated livelihoods in the past years, concerns about natural calamities also surfaced at 5.6%, while rising fuel prices at 5.2% and health concerns at 4.5%, respectively.
Top household spending items
Despite the concerns, Filipino households showed increased spending for items such as food, fuel, light and water, education., non-alcoholic beverages, and transportation.
Upscale homes increased spending on fuel, light, and water more than food, the survey showed.
Downscale homes saw their food budget as top priority, Kantar said.
Class ABC homes also prioritized spending on communications, specifically on calls and text messaging.
Class DE homes spent more on non-alcoholic beverages versus calling or texting.
Overall, most Filipino consumers foresee no change in their purchasing power in the next 6 months, Kantar revealed.
However, 44% of homes are optimistic about their future spending: 47% from upscale class and 43.2% from downscale homes see a better outlook on their purchasing ability in the coming months.
“Despite a slump in global FMCG consumption, the future looks bright for the Philippine FMCG market. The consumers’ optimistic outlook reflects a more prosperous economy in the months to come,” said Lourdes Deocareza, Kantar Worldpanel’s new business development head. – Rappler.com
Women shopping image from Shutterstock