This new decade will likely be auspicious for the Filipino consumer, beginning this year when the domestic economy is likely to grow faster at 6.2 percent to 6.6 percent, local investment house First Metro Investment Corp. (FMIC) said.
With robust macroeconomic fundamentals supporting low interest rates, benign consumer prices and corporate earnings, FMIC expects the Philippine Stock Exchange index (PSEi) to climb to 8,600 to 8,900 this year.
“The future for Filipino consumers is great for this decade with the expanding middle class and OFW (overseas Filipino worker) remittances which continue to be robust,” FMIC chair Francisco Sebastian said in a briefing on Tuesday.
“The Philippine economy will grow faster in 2020 compared to 2019, fueled by stronger consumer spending, easing monetary conditions and growing tourism sector,” FMIC president Rabboni Francis Arjonillo said.
The improvement in efforts to lick poverty, Sebastian noted, meant that the over 6-percent growth eked out by the Philippines in the last few years was now cascading to the poor.
The 2018 Family Income and Expenditures Survey suggested that families below the poverty threshold had declined to 12.1 percent from 17.9 while the percentage of poor people fell to 16.6 percent from 23.3 percent, which meant that 5.9 million people and 1.1 million families had been emancipated out of poverty.
In the first nine months of 2019, Philippine gross domestic product (GDP) growth averaged at 5.8 percent—lower than the country’s over 6 percent trend growth rate—due to delays in the passage of the national budget that in turn curbed government spending. This year, however, the government’s budget had been enacted in time for the state to hit the ground running.
“Consumer spending, which accounts for 66 percent of the country’s GDP, will expand further driven by robust government and infrastructure spending, higher employment rate, manageable inflation and robust OFW remittances,” Arjonillo said.
FMIC expects inflation this year to average at 2.5 to 2.8 percent. INQ