Philippine gross savings surged by 35% in 2023

MANILA — The Philippines’ gross savings grew by more than a third last year as savings from households and the government bounced back from three straight years of contraction, data from the Philippine Statistics Authority showed on Thursday.

Gross national savings, the difference between gross national disposable income and the combined household and government final consumption, amounted to P6.6 trillion at current prices in 2023. This was an increase of 35 percent from P4.89 trillion in 2022.

At 2023 prices, gross domestic product (GDP) grew by 10.4 percent while the gross national income (GNI)—or the total amount of earnings of Filipinos during a period—rose by 15.7 percent last year.

Gross national savings were equivalent to 24.4 percent of the GNI, rising from the 20.5 percent share posted in 2022.

Nonfinancial corporations posted gross savings of P4.52 trillion, followed by financial corporations with P1.71 trillion.

General government and households including nonprofit institutions that serve households posted their savings at P152.26 billion and P219.41 billion, respectively.

Change in saving habits

“This positive shift [from contraction] indicates a potential change in Filipinos’ saving habits, with the savings-to-income ratio also improving to 24.4 percent of GNI,” said Robert Dan Roces, chief economist at Security Bank.

“The report coincides with robust economic growth, with both GNI and GDP experiencing double-digit increases nominally,” Roces said in a Viber message.

The economist also attributed the increase in savings to economic expansion resulting in rising incomes for the Filipinos.

READ: Philippine economy grew 5.7% in Q1

The Philippines grew by 5.7 percent in the first quarter, faster than the 5.5 percent in the final three months of 2023.

“This trend, if sustained, bodes well for the Philippines’ financial security and future economic stability. Increased domestic savings have the potential to fuel further investments, creating a virtuous cycle of growth,” he added.

Aris Dacanay, economist at HSBC Global Research Asean (Association of Southeast Asian Nations), said that despite growth in the household side, gross national savings were still below the prepandemic level.

“A high domestic saving rate will be important to have enough domestic financing for the country’s ambitious infrastructure agenda versus relying on foreign capital to finance the agenda,” Dacanay said in an email. —Mariedel Irish U. Catilogo