- Personal Finance
Filipino Consumer Spending Habit
Filipinos Love to Spend
No doubt about it, Filipinos are known for their shopping and spending habits. No wonder the Philippines is called the mall republic of Asia due to the number of malls in the country already in existence and more in construction. Retail selling in indeed a thriving business in this southeast Asian nation of approximately 101 million people.
Do Filipinos generally earn more to allow them this spending habit? Not so. Majority of the population is still under the poverty line but those belonging to the middle income level are big on consumer good spending. This means that consumer and technological goods are high ly in demand.
Credit facility services are in high use and many prefer to have credit cards to fund these purchases. Despite the recent world economic slump, a study by Synovate in 2009 revealed that Filipino spending habit generally remained the same although luxury goods spending was reduced. Apparently, the spending habits of Filipinos has not been affected much by economic setback.
Retail Business is Booming
The Philippines might be the only country which has malls even in the smallest provinces. If they could have their way, Filipinos want their malls big. Quite the opposite of what you see in the West. Malls in the Philippines dot everywhere and you should see how people love to flock to malls, any day of the week. One is deemed lucky to find a free mall parking space beyond the 10am mall opening hours.
The biggest being the Mall of Asia (MOA) spanning 42 hectares and considered the third biggest in Asia and the 4th biggest in the world according to a Forbes Magazine survey. Average daily foot traffic at MOA is at 200,000.
Imagine the competition among this malls during 'sale' season. In one area like the Ortigas Center in Metro Manila, malls are literally few steps off each other. Sale season is indeed a frenzy with every mall in neck-to-neck competition to lure eager shoppers. Expect to see hordes trooping to these malls at any given day of the week.
Celebration and Festivities
Filipinos love fellowship and like to spend time together with family and friends. Celebrations and holidays bring most Filipinos together. The Philippines is known for celebrating the longest Christmas season in the world. And that is just one of the countless festivities and celebrations in the country. Aside from Christmas, there are the fiestas, birthdays, baptisms, weddings, big reunions, and anniversaries, hence, more reasons to spend really.
Consequences of spending
Although this spending habit is good news for businessmen, this could not be said for the country's future savings and investment outlook. As people spend more of their income on consumer goods, less goes to savings and investment.