An optimistic land of opportunity with strong fundamentals and buoyant confidence

from consumers to spend on lifestyle.

The Philippines is set to gain a lot from the impending ASEAN 2015 integration and
as a result global and Asian multinationals alike are turning to this fast-growing
market as a key source of growth.
The countrys economic fundamentals are sound, with the International Monetary
Fund forecasting 6.7 per cent GDP growth in 2015, up from 6.1 per cent in 2014.
Meanwhile, the key drivers of the Philippines growth in the past yearthe private
construction sector, increases in Overseas Filipino Workers remittances, the growing
business process outsourcing industry and strong consumption spendingare set to
continue in the short to medium term.
The positive economic outlook for the Philippines is having a flow-on effect to
consumer confidence, particularly confidence in job prospects and personal
finances, with Filipino confidence levels ranking third globally behind India and
Indonesia according to Nielsens first quarter 2015 Global Consumer Confidence
Index. Thanks to continued buoyant consumer confidence, consumer spending is
strengthening, including discretionary spending on lifestyle and premium items, and
retail spending metrics from the Philippine Government show a hike in spending in
areas such as health (up 9.1 per cent), alcohol (up 8.7 per cent), recreation (up 7.7
per cent), and clothing and footwear (up 6 per cent). Meanwhile, numbers from The
Chamber of Automotive Manufacturers of the Philippines and the Truck
Manufacturers Association show year-on-year automotive sales growth hit 30 per
cent in 2014. The passenger-car segment, which expanded 48 per cent, was the
main driver for the uplift.
Outlook for the construction and real-estate sector also remains strong after posting
double digit growth in 2014, while the retail sector is gearing up for growth with a
number of large firms eyeing expansion opportunities. Most of the major retailers
have launched different store formats such as hypermarkets, small stores,
convenience stores and drugstores in a bid to bring their stores closer to the
consumers home and tap into increasing demand for one-stop shopping and
convenience.
As demand for premium products and items, which offer convenience continues to
expand, consumers are also moving away from home-prepared meals toward readyto-eat food, and according to Nielsens 2015 Shopper Trends report almost eight in
10 consumers have eaten at least once a month in a quick service restaurant.
Likewise, the volume of purchases made in convenience stores and bakeries is
increasing.
With the prospects of a growing economy and an optimistic 2015, Filipino
consumers are spending more on products and services that will improve their lives.
While majority of the population remains in the lower-income segment, the middle

class is slowly growing, particularly among families receiving monthly remittances

from Overseas Filipino Workers, as well as BPO employees who receive a higher
than average income, all of which represents opportunities for companies looking to
expand their foothold in the Philippines.