According to the Third Quarter TransUnion’s Consumer Pulse Survey Study, more than half or 54 percent of Filipinos said they have also cut back on discretionary spending (such as dining out, travel and entertainment) over the last three months.
In fact, most Filipinos (76 percent) agreed the economy is either already in a recession or will enter one by the end of 2023, while almost half (44 percent) cited inflation for everyday goods as their biggest concern affecting their household finances for the next six months.
According to the Philippine Statistics Authority, inflation increased to 6.9 percent in September, from 6.3 percent in August, as food and energy costs continued to increase.
The hike may push the central bank to further increase rates and borrowing costs for businesses and consumers.
The study surveyed 1,013 Filipino adults and was conducted from Aug. 19 to Sept. 1, 2022.
The study found that inflation was the leading household financial concern over the next six months followed by a possible global recession. Additionally, in anticipation of a possible recession, 66 percent said they are building up savings.
These financial concerns could be exacerbated by fewer Filipinos (78 percent compared to 81 percent in the second quarter 2022) expecting their incomes to go up in the next 12 months.
Baby Boomers (72 percent) and Gen X (58 percent) reduced their discretionary spending the most among age groups in the past three months, and Gen Z (69 percent) and Millennials (62 percent) said they saved more in emergency funds in the last three months compared to other generations.
When it comes to future spending, Filipinos said their greatest spending increases in the next three months are likely to be on bills and loans, medical care/services, and retirement funds and investing. They said they are least likely to spend more on large purchases like cars or appliances.
Additionally, 47 percent of respondents who said they won’t be able to pay at least one of their current bills and loans in full said that they will pay a partial amount for these.
Gen Z (58 percent) and Millennials (55 percent) who said they expect to be unable to pay at least one of their current bills and loans in full also said that their leading choice of funding to pay these is by using their savings.