PH ‘revenge spending’ at risk as high consumer prices bite
The so-called “revenge spending” in the country may be fizzling out as the majority of the Filipinos preferred to save more money for the rainy days amid the surging consumer prices, according to a study by credit reporting firm TransUnion.
In its second quarter Consumer Pulse Study, TransUnion noted that 56 percent of respondents had chosen to put more money into their emergency funds, which may signal a halt in revenge spending, or the phenomenon wherein people spend excessively after a period when they had limited opportunities to do so, such as during the COVID-19 pandemic lockdowns.
The costs of basic goods and necessities are also seen to burn a deeper hole in the consumers’ pockets. Inflation hit a three-year high of 6.1 percent in June.
Some 43 percent of survey respondents saw better household income, but they decided to lessen discretionary spending, like dining out and traveling. Those from the Gen X (born in 1965-1979) and baby boomer (born in 1944-1964) generations “reported cutting back the most.”
About 42 percent said they were “planning to maintain this trend over the coming three months.”
Majority claimed to decrease or maintain the same amount of spending for big purchases like appliances or cars.
Meanwhile, a significant portion (46 percent) said they were “unable to pay at least one of their current bills and loans in full.”
The same number of respondents said they would dip into their savings to ensure continued payment of bills and loans.
As for lending, about 55 percent of the respondents said they were keen to apply for new loans within the next year to meet their financial needs. These include personal loans, credit cards, home loans and car loans.
Conversely, over half (59 percent) of respondents who had considered applying for new credit or refinancing existing credit ultimately decided against it, TransUnion said, citing high credit costs among the reasons why.
The company conducted the study from May 26 to June 7 with over 1,000 respondents. INQ
