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In 2023, Fitch Solutions expects PH household spending to increase.

According to a report by Fitch Solutions Country Risk & Industry Research, the estimated increase in real income in 2023 will increase household expenditure in the Philippines.

Fitch Solutions said it lowered its 2022 growth prediction for real household expenditure in the Philippines from 7.6 percent year-over-year to 5.5 percent in a study dated Nov. 8, a copy of which was distributed to the press on Wednesday.

But it predicts that household incomes will grow faster than inflation in the following year.

It went on to say that “(this) will guarantee real income growth and more possibilities for consumer spending.”

According to the research, consumer spending in the nation is still growing, in part because some people have found new employment after the Covid-19 epidemic hit in 2020.

From a peak of 14.5 percent in 2020 when lockdowns were implemented due to the pandemic, it anticipates that the unemployment rate will remain low at around 7 percent of the labor force in 2023.

“Over the period 2023-2026, we expect the level of unemployment to remain low, averaging about 7 percent of the labor workforce,” it stated.

According to Fitch Solutions, the nation’s unemployment rate will be approximately 8% this year and 6.7 percent in 2023 and 2024.

According to figures from the Philippine Statistics Authority, the unemployment rate in September 2022 dropped further from 5.3 percent one month prior and 8.9 percent in the same month previous year to 5 percent.

Although the employment situation is anticipated to improve over the next few months, which will boost consumer spending, the research anticipates that inflation will remain high and limit people’s ability to spend.

Inflation is expected to average 5.6 percent this year, exceeding the government’s target range of 2-4 percent, according to Fitch Solutions.

The average annual rate of price rises in the nation as of the end of October this year was 5.4 percent.

The acceleration of food prices, among other factors, caused the October 2022 print to increase to 7.7 percent from 6.9 percent, its highest level since December 2018.

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