Confidence in the Philippines

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According to the latest consumer confidence research from Nielsen (from the second quarter of this year), Filipino consumers are the most optimistic in the world. 

In August, the country recorded its highest consumer confidence index score of 132 – the biggest quarter-on-quarter increase among the 63 countries included in the survey – topping the world optimism league for the first time. 

In August 2015, CNN Money forecast that the Philippines would be the fourth fastest growing economy for that year, after China, Qatar and India. The Asian Development Bank reported that the country’s GDP grew by 5.8% last year, and estimated it would rise to 6% this year. 

These figures were cited in a report on the Philippines from global business intelligence firm RepRisk, published in July as part of its series on the Association of Southeast Asian Nations, a regional group made up of 10 states. The report claims recent growth has mostly been fuelled by strong domestic demand and remittances from Filipino workers living abroad.

Another report, from market research company Euromonitor, predicted that in 2030, the population of the Philippines will reach almost 128 million – an increase of 32.1% from 2012. This growth, says the report, will be driven by increases in all age groups, but with particularly fast growth in the 60+ age groups. 

But, the report goes on, the Philippines will remain an overwhelmingly young country in 2030, with 71.4% of the population aged 40 years or under. The urban population is forecast to overtake the rural for the first time in 2016 and, by 2030, it will make up 56.3% of the population, Euromonitor claims.

The Filipino confidence outlined in Nielsen’s research is also reflected in another Euromonitor report on the country’s economic status. It showed traditionally frugal, confident Filipino consumers have increased spending in line with the country’s economic performance. 

They have more money in their pockets and are buying higher-quality goods, such as food and household products, as well as bigger items like vehicles. Demand for these big-ticket items has also been boosted by a wider availability of consumer credit and greater use of financial cards by the growing middle class, the report says.

However, according to the RepRisk report, which also explores the environmental, social and governance (ESG) risks facing the country and the subsequent impact on its economy, the Philippines’ personal and household goods sector is the most vulnerable. It highlights the example of a fatal fire at a factory in May 2015, which exposes the country’s ‘lax implementation and enforcement of labour laws and occupational safety regulations’. 

The report also shows that there have been repeated allegations of poor working conditions in Filipino factories, and that the International Peace Information Service has criticised labour rights violations and poor occupational health and safety conditions. 

The mining sector – another key driver of the economy – is also identified as a potential risk, with reports of major protests against mining projects over fears of negative environmental impacts. 

Nevertheless, the Nielsen figures showed that, of the three confidence indicators measured – job optimism, immediate spending intentions and sentiments around personal finances – job optimism had increased the most among Filipinos, with a jump of 16% in the second quarter of this year.