More than a third of Filipinos reported difficulties in “meeting their financial needs based on their monthly earnings alone” amid high consumer prices, according to a market research company.
Synergy Market Research + Strategic Consultancy president and chief executive Germaine Reyes said while inflation rate decelerated from a peak of 8.7 percent in January 2023, it remained elevated compared to the previous year’s.
The Philippine Statistics Authority said inflation in June settled at 5.4 percent.
“Despite the easing of pandemic restrictions and the reopening of businesses, inflation continues to hinder consumer spending,” she said.
Reyes said to cope with high prices, Filipinos changed their spending habits and cut back on several expenditures.
“In fact, seven out of 10 Filipinos are expected to make cutbacks in household spending over the next 12 months if the contributory factors such as inflation will not improve,” she said during a briefing at Rockwell Club in Makati City.
Reyes said it is important for companies to keep prices steady to help Filipino consumers and entice them to spend more.
“If we want to induce consumer spending, let us not raise our prices. About 36 percent are finding it difficult to meet their financial needs, and 51 percent are barely meeting their needs. So that’s a total of 87 percent,” she said, based on the results of the study by Synergy and YouGov.
Synergy and YouGov surveyed 3,479 adult Filipinos across the Philippines on March 29 to April 5, 2023.
Reyes said among the products and services that saw the biggest price increase are petroleum, eating out, healthcare and food supplement, sanitary and toiletries and mobile and Internet services.
“As inflation continues to ease up, it is hoped that consumer spending will be induced further. Right now, it seems that people are putting on a wait-and-see attitude. This presents an opportunity for brands to extend a lifeline to customers by being considerate and not introduce price hikes, extend support to customers by offering products/services that align with their budget, or offer innovative solutions that will provide better value for consumers to spend on,” she said.
She said Filipino consumers were reducing spending on dining out, beauty products, cosmetics and gadgets and luxury items.
Reyes said the pandemic may have shifted Filipino consumers’ focus towards health and wellness.
“Overall, only a few product categories will see a significant increase in spending for the rest of the year, namely, healthcare products/food supplements and sanitary care/toiletries,” she said.
Spending on financial or investment products are also expected to slightly increase this year as a result of the pandemic, she said.