THE PHILIPPINES’ household goods sector may grow by 7.5% this year to P270.4 billion ($4.8 billion) from last year as rising incomes boost consumer spending, BMI Country Risk & Industry Research said.
In a report dated Feb. 13, BMI said spending on household goods would likely grow by 7.1% in the next five years to P354 billion by 2028.
“Improvements in the housing market and the increasing number of households in the middle- and upper-income brackets will encourage expenditure on aspirational products, such as consumer electronics and home furnishings,” it said.
Colliers Philippines earlier said vacancies in the secondary residential market dropped to 16.8% at the end of December from 17.1% a year earlier. It recorded a take-up of about 23,400 condominium units in the National Capital Region pre-selling market last year, better than 21,600 units sold in 2022.
The property consultancy expects more than 7,000 condominium units to be completed this year.
BMI said the Filipino household goods consumer market is dynamic and has a mix of local and international retailers, BMI said. Consumers can access a wide range of products from electronics to white goods through physical stores and e-commerce platforms.
The research firm noted that several domestic chains in the Philippines such as SM Home compete with Europe-based and global rivals such as Swedish IKEA and Hong Kong-based Japan Home Centre.
Retail formats also vary in the country, BMI said, citing out-of-town superstores, small city center display stores and a robust online sales sector.
“Over the medium term, the market will average steady growth, with all segments apart from leisure items outperforming,” BMI said.
The average income of Filipino households fell by 2% to P307,190 in 2021 from 2018, according to data from the local statistics agency. The average spending of Filipino families also dropped by 4.1% to P228,800.
The poverty incidence also rose to 18.1% in 2021 from 16.7% in 2018, equivalent to 19.992 million poor Filipinos.
The Philippines seeks to cut the poverty incidence — the proportion of Filipinos whose incomes fell below the per capita poverty threshold — to 9% by 2028.
BMI expects the Philippine economy to grow by 6.2% this year as easing inflation and unemployment support household spending. Household spending expanded by 5.6% last year from 8.3% a year earlier.
It earlier said it expects inflation to fall back to trend this year, offering a respite for real household incomes after a rough 2023. Labor market conditions are very tight by historical standards and the unemployment rate is now at record lows, it added.
Inflation slowed to 2.8% in January from 3.9% in December and 8.7% a year ago, the slowest since October 2020. It was also the second straight month that inflation was within the central bank’s 2-4% target.
The unemployment rate fell to a record 4.3% in 2023 from 5.4% a year earlier, equivalent to 2.19 million jobless Filipinos compared with 2.67 million in 2022. — Keisha B. Ta-asan