Latest Stories

Consumer spending seen to remain strong


Consumption by Filipino households is expected to remain robust in 2013 despite the dampening effects of the peso strengthening on the value of foreign exchange remittances.

According to the Bangko Sentral ng Pilipinas, the adverse impact of the peso’s appreciation on the value of remittances is countered by the positive effect of the same on overall inflation.

BSP Deputy Governor Diwa Guinigundo said that because of the strong peso, the cost of imported goods in peso declined, keeping overall inflation benign.

“The firmness of the peso has some dampening impact on consumption expenditure (due to the reduced peso value of dollar remittances], but it also can help ease inflation. And if prices are kept stable, consumption is encouraged,” Guinigundo said in a press conference following the government’s economic briefing held at the Philippine International Convention Center (PICC) on Wednesday.

The BSP expects household consumption to remain a key economic growth driver 2013. It also sees investments gradually increasing its contribution to growth.

The government aims to keep inflation within 3 to 5 percent this year and next year.

“We [the BSP] expect domestic inflation to stay within the 3 to 5 percent range. This means the BSP will have enough monetary space to continue providing an environment where credit and liquidity growth will remain supportive of sustainable economic growth,” Guinigundo said.

He said the low inflation rate allowed the BSP to keep interest rates low, and with the low interest rate environment, individuals and businesses were expected to borrow more to support consumption and investments.

The BSP does not set an exchange rate target but it intervenes in the market to avoid too much volatility.

Last year the peso rose by nearly 7 percent against the US dollar to become one of the fastest-appreciating Asian currencies against the US dollar. It closed at 41.05:$1 on the last trading day of the year.

The appreciation of the peso has elicited concerns among exporters. They said this made Philippine export goods more expensive and, therefore, less competitive.

Some economists also said the rising peso might eventually cause a drag on household spending, particularly consumers who were dependent on remittances.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: consumer spending , consumption , economy , forecasts , Philippines

  • http://twitter.com/hp2184 RJ Legaspi

    Domestic consumer spending drives the country’s GDP and it’s a good thing. We spend a lot on basic necessities from food to education.  

    However, we must learn to “save” too. Invest money on insurances, stocks or basic businesses that will generate more revenue that we could use in the future, for spending purposes again. Also, let’s patronize home-grown products and services. I am here in a foreign country but the clothes I’m wearing are mostly bought (and made) from the Philippines. 

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Easterlies to prevail in Luzon, Visayas
  • Lacson eyes P106-B ‘Yolanda’ rehab masterplan
  • What Went Before: Malacañang allies alleged involvement in pork scam
  • Timeline: Napoles tell-all
  • 12 senators on Napoles ‘pork’ list, says Lacson
  • Sports

  • Mixers trim Aces; Painters repulse Bolts
  • Donaire junks Garcia as coach, taps father
  • ’Bye Ginebra: No heavy heart this time
  • UAAP board tackles new rules
  • Baguio climb to decide Le Tour de Filipinas
  • Lifestyle

  • No tourist draw, Malang the croc will remain wild
  • The best flavors of summer in one bite, and more
  • Homemade yogurt, bread blended with pizza, even ramen
  • Visiting chefs from Denmark get creative with ‘ube,’ ‘ buko,’ ‘calamansi,’ mangoes
  • Salted baked potatoes
  • Entertainment

  • Return of ‘Ibong Adarna’
  • Practical Phytos plans his future
  • In love … with acting
  • From prison to the peak of success
  • ‘Asedillo’ location thrives
  • Business

  • Cost-recovery provisions for affected gencos urged
  • This time, BIR goes after florists
  • Philippine Airlines to stop shipment of shark fins
  • PH banks not ready for Asean integration
  • Stocks down on profit-taking
  • Technology

  • No truth to viral no-visa ‘chronicles’
  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Opinion

  • Editorial cartoon, April 24, 2014
  • Talking to Janet
  • Respite
  • Bucket list
  • JPII in 1981: walking a tightrope
  • Global Nation

  • Filipinos in Middle East urged to get clearance before returning
  • PH seeks ‘clearer assurance’ from US
  • China and rivals sign naval pact to ease maritime tensions
  • What Went Before: Manila bus hostage crisis
  • Obama arrives in Tokyo, first stop of 4-nation tour
  • Marketplace