{"id":19828,"date":"2024-07-19T03:04:53","date_gmt":"2024-07-19T03:04:53","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/phl-consumer-demand-seen-to-remain-muted\/"},"modified":"2024-07-19T03:04:53","modified_gmt":"2024-07-19T03:04:53","slug":"phl-consumer-demand-seen-to-remain-muted","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/phl-consumer-demand-seen-to-remain-muted\/","title":{"rendered":"PHL consumer demand seen to remain muted"},"content":{"rendered":"
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DOMESTIC DEMAND in the <\/span>Philippines and other emerging Asian economies is expected to remain muted amid a high interest rate environment, S&P Global Ratings said.<\/p>\n

\u201cConsumer demand is more subdued in the Philippines with elevated interest rates (with the policy rate at 6.5%) and weak consumer conf<\/span>idence,\u201d S&P said in its Emerging Markets (EM) Monthly Highlights.<\/p>\n

The Bangko Sentral ng Pilipinas (BSP) kept its key rate to an over 17-year high of 6.5% since October 2023 to tame inf<\/span>lation.<\/p>\n

\u201cOpposing forces are at work as consumer demand remains broadly stable in EM Asia. On the one hand, demand is dampened by tighter monetary policy and spillovers from weaker economic growth last year,\u201d it said. <\/span><\/p>\n

\u201cOn the other hand, resilient labor markets and recovering tourism are supporting consumption activity.\u201d<\/p>\n

In the first quarter, the Philippine gross domestic product (GDP) grew by a weaker-than-expected 5.7%.<\/p>\n

Household spending, which accounts for about three-fourths of growth, grew by 4.6%. This was its slowest pace since the 4.8% decline in the <\/span>f<\/span>irst quarter of 2021. <\/span><\/p>\n

\u201cWe observe a slowdown in long-term GDP growth across some EMs, mostly because of slower labor productivity and f<\/span>ixed investment,\u201d S&P Global said.<\/p>\n

\u201cIn an environment of high interest rates, EM Asian economies with higher domestic savings may be better positioned to f<\/span>inance investments and boost long-term growth prospects,\u201d it said.<\/p>\n

The Philippines is targeting 6-7% economic growth this year, 6.5-7.5% for 2025 and 6.5-8% for 2026 to 2028.<\/p>\n

However, S&P Global said it sees stronger GDP growth in the region this year compared with 2023, although there are risks to this outlook.<\/p>\n

\u201cIn several economies, policy-related risks have risen following elections that are generating uncertainty over reforms, <\/span>f<\/span>iscal trajec<\/span>tories, and institutional frameworks,\u201d it said. <\/span><\/p>\n

S&P Global expects Philippine GDP growth to average 5.8% this year, falling short of the government\u2019s goal.<\/p>\n

\u201cPolicy uncertainty could exacerbate existing risks. Policy uncertainty will be a key factor late in the year and into 2025 as US elections play out and new administrations in key EMs <\/span>begin to execute their plans,\u201d it added. <\/span><\/p>\n

The US presidential election is scheduled for Nov. 5.<\/p>\n

In the Philippines, the midterm elections will be held in May 2025 and will have Filipinos voting for senators and local off<\/span>icials such as congressmen, governors, and mayors, among others.<\/p>\n

Meanwhile, the credit rater said it also expects the delay in US Federal Reserve\u2019s easing cycle to also impact monetary loosening in the region.<\/p>\n

\u201cA later-than-anticipated start to the Fed\u2019s interest rate cuts will contribute to slower monetary policy normalization in most major EMs, though our view on terminal benchmark <\/span>interest rates remains unchanged,\u201d it said. <\/span><\/p>\n

BSP Governor Eli M. Remolona, Jr. has said that the central bank is on track to begin cutting rates by August this year.<\/p>\n

The BSP could cut by up to 50 basis points (bps) for the full-year, he added, through 25-bp cuts in the third and fourth quarters.<\/p>\n

S&P Global also noted easing food inf<\/span>lation in the region. \u201cFood inf<\/span>lation has been moderating in the past 12 months, but at an uneven pace across EMs.\u201d<\/p>\n

In the Philippines, headline inflation slowed to 3.7% in June from 3.9% in May, marking the seventh straight month that inf<\/span>lation settled within the BSP\u2019s 2-4% target band.<\/p>\n

Though food inf<\/span>lation in June quickened to 6.5%, rice inf<\/span>lation eased to 22.5% from 23% a month earlier. Rice accounts for nearly half of overall inf<\/span>lation.<\/p>\n

\u201cMost economies in the region are highly dependent on food imports, particularly on wheat, rice and corn,\u201d S&P Global said.<\/p>\n

\u201cDespite some moderation, prices for several key food commodities, such as wheat and rice, remain around 10-15% above pre-2022 levels. Inflationary pressures stemming from elevated food prices continue to complicate disinflation trajectories for food-importing EMs,\u201d it added.<\/p>\n

For the first half of the year, inf<\/span>lation averaged 3.5%, slightly above the central bank\u2019s 3.3% full-year forecast. \u2014 Luisa Maria Jacinta C. Jocson<\/b><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

DOMESTIC DEMAND in the Philippines and other emerging Asian economies is expected to remain muted amid a high interest rate environment, S&P Global Ratings said. \u201cConsumer demand is more subdued in the Philippines with elevated interest rates (with the policy rate at 6.5%) and weak consumer confidence,\u201d S&P said in its Emerging Markets (EM) Monthly [\u2026]<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[14644,5897,2484,18814,11354,7455,4778],"class_list":["post-19828","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-bworldonline","tag-consumer","tag-demand","tag-muted","tag-phl","tag-remain","tag-seen"],"yoast_head":"\nPHL consumer demand seen to remain muted - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/phl-consumer-demand-seen-to-remain-muted\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PHL consumer demand seen to remain muted - 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