Manila: BMI, a Fitch Solutions unit, is forecasting continued growth in consumer spending in the Philippines this year, fueled by robust economic progress. “We hold a positive outlook for consumer spending in the Philippines, with an acceleration in real household spending growth – from 5.0 percent in 2024 to 5.3 percent in 2025,” BMI stated in a report released Thursday. The report noted that household spending in real terms is projected to reach PHP13.2 trillion this year.

According to Philippines News Agency, the forecast aligns with expectations that the Philippine economy will grow by 6.3 percent this year. BMI emphasized that easing inflation is expected to bolster household spending. It noted that although deteriorating external demand might impact the country’s GDP, private final consumption expenditure is projected to grow by 5.3 percent, an improvement from the 5.0 percent growth in 2024.

BMI anticipates that inflation will settle at 3.3 percent this year, remaining within the government’s target range of 2 to 4 percent. “Easing inflationary pressures will provide relief to real household incomes and enable growth in spending,” BMI added.

According to BMI, potential risks to the consumer spending outlook include prolonged high inflation, reduced remittances, and a weakening domestic economy. “These risk factors will adversely affect household purchasing power, while geo-political tensions have also emerged as a risk that is likely to impact inflation and interest rates,” BMI warned. The organization further highlighted that a high level of household debt remains a concern for the consumer outlook.