Philippine Markets Newsletter

PH Monday Macro: With the holiday season here, can we expect a boost in economic activity in part due to improvements in this indicator?

October 10, 2022

Accounting for over 70% of the country’s GDP, consumer spending drives much of where an economy is heading. If consumers are more optimistic about the future, they are more likely to spend.

We take a look once more at where consumer confidence is, having been in negative territory since the start of the pandemic in 2020. 

Philippine Markets Newsletter: 
The Monday Macro Report
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After months of steady improvement, Philippine consumer confidence reversed to -12.9%, showing more pessimism in Q3 2022 versus the previous quarter. As expected, the increase in prices of goods and household expenses outpaced any increase in income.

To illustrate just how real inflation is, one op-ed writer of a major broadsheet newspaper in the Philippines compared the price of Jollibee’s garlic pepper beef offering in 2014 when it first came out versus its price this month. This seasonal menu item currently costs PHP 120 as a value meal, when eight years ago, the same value meal cost PHP 49, a 145% increase in price…

Meanwhile, in that same period, minimum wage for non-agriculture sectors increased by only 18% from PHP 466 a day to PHP 533 a day currently.

That said, consumers still remain optimistic about the future. The confidence index increased to 13.4% for Q4 2022 and to 33.4% for the next 12 months. This is a good sign of healthy spending expectations now that we are entering the final quarter of the year—the time of holiday spending, bonuses, and 13th month pay. 

However, the percentage of households considering to purchase big-ticket items such as consumer durable goods, motor vehicles, and house and lots declined to 5.5% from 6% last quarter. This implies though consumers are generally more optimistic about the country’s economic recovery, they would still prefer to be prudent about their expenses. 

Consumers are also hopeful that with over 100 days spent in office, the current administration would be able to effectively implement policies and programs that would greatly benefit agriculture, education, and the country’s economic recovery.

Optimistic consumers imply greater future demand, which incentivizes the creation of more businesses and jobs. On the other hand, pessimistic consumers suggest lower demand in the near-term, which becomes a headwind for growth.

Assuming the Philippine economy continues to move in its recent overall direction, we continue to think that any dips in the market are a good opportunity for adding more of the Philippine Stock Exchange index into investors’ portfolios. 

About the Philippine Markets Newsletter
“The Monday Macro Report”

When just about anyone can post just about anything online, it gets increasingly difficult for an individual investor to sift through the plethora of information available. 

Investors need a tool that will help them cut through any biased or misleading information and dive straight into reliable and useful data. 

Every Monday, we publish an interesting chart on the Philippine economy and stock market. We highlight data that investors would normally look at, but through the lens of Uniform Accounting, a powerful tool that gets investors closer to understanding the economic reality of firms. 

Understanding what kind of market we are in, what leading indicators we should be looking at, and what market expectations are, will make investing a less monumental task than finding a needle in a haystack.

Hope you’ve found this week’s macro chart interesting and insightful. 

Stay tuned for next week’s Monday Macro report! 


Angelica Lim 

Research Director
Philippine Markets Newsletter
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