MANILA, PHILIPPINES – The rising inflation affects the majority of Filipinos’ spending capacity. Just in September, inflation rose to 6.1% from 5.3% in the previous month. Commodity prices also rise when this happens, affecting Filipino spending habits.
According to the Nielsen Global Survey of Inflation Impact, 61 percent of respondents said they adjust their budget when food prices rise, making new clothing and accessories the area of spending that is most affected by food inflation.
So, how do Filipinos manage money when there’s a recession and inflation? In this article, we’ll look at the ways Filipinos spend and save their money in times of feast and famine.
Despite the recession, food is still a top priority in Filipino spending
Filipinos continue to prioritize food budgeting despite increases in commodity prices.
In the Nielsen Global Survey, 59 percent adjust their spending on dining out while 51 percent change their spending on snack food. The survey further discovered that budgeting for main meals at home is a top priority. Next to this is home, education, medical expenses (including doctor and dental visits, medicines, and vitamins), savings and investments, and housing (including rent, mortgage, and utilities) remain unchanged despite food inflation.
When it comes to budgeting food, 20 percent of Filipino respondents said they would buy more fish and seafood when there is food inflation; 16 percent would stock up on fresh or frozen fruits and vegetables; and 15 percent would buy more organic products.
Staple categories that Filipino buying habits do not change for include meat and poultry (66 percent), bread and bakery goods (64 percent), and dairy (56 percent). Conversely, most Filipino respondents said they would spend less on chips and snack products (75 percent) and candies, cookies, and other sweets (71 percent).
According to the survey, food inflation also affects Filipinos’ choices on where they purchase their grocery items. 36 percent of respondents indicated that as prices rise, they would shop more at discount or dollar stores, 30 percent at fresh food farmers’ markets, 25 percent at warehouse club stores, 20 percent at clearance stores and supermarkets, and 18 percent at hypermarkets.
In addition, 32 percent of respondents said they intended to grow more of their own food, while 15 percent would shop at local neighborhood stores.
Other Filipino spending habits
With inflation rising, cautious consumer spending becomes a key to dealing with price increases. Here are some other (good or bad) ways that Filipinos spend money during times of high inflation:
Scouring the internet for good deals
Some Filipinos also use the internet in their saving strategies, with 21 percent of respondents looking for deals online, and 20 percent using social media to find specials.
The continued popularity of e-commerce apps such as Shopee and Lazada shapes this Filipino consumer behavior. With millions of visitors daily, these platforms offer a wide range of products at competitive prices. Consumers can use the apps from the convenience of their homes or on the go to compare prices, research products, and find deals.
Furthermore, the unexpected integration of shopping features on social media platforms such as Facebook and TikTok has changed how Filipinos discover and interact with special offers. Integrating e-commerce into social media allows users to find deals while browsing their favorite content.
This Filipino recession spending shows Filipinos’ value and willingness to use technology to save money. The digital approach aligns with their commitment to securing the best possible deals while maximizing their financial resources.
Practicing tingi buying
The tingi culture in the Philippines is an existing practice that helps Filipinos get by. Tingi buying helps Filipinos manage their budgets effectively, ensuring they spend only on necessities. Furthermore, this practice can be a lifeline during times of financial strain.
How Filipinos spend in sari-sari stores is an example of this culture. It helps ease spending during inflation and prevents products from going to waste. Additionally, retail purchasing ensures that even low-income families can access essential items. It eliminates the need for bulk purchases that some people may not be able to afford.
Purchasing items on sale
Another interesting way Pinoys save money is by waiting for items to go on sale. Sale-priced items also become more popular in times of food inflation, with 40 percent of Filipino respondents saying they would purchase only sale items. 36 percent of respondents said they would stock up on regularly used items on sale, 35 percent said they would purchase items in larger pack sizes, and twenty percent would serve smaller portions.
This Filipino spending habit reflects the Filipinos’ commitment to financial prudence, as they actively seek discounts and promotions to offset the impact of food inflation on their budgets.
Cashless payments
Filipinos are recognizing the convenience and accessibility of cashless payment methods. It also highlights Gen-Z Filipinos’ need for financial access. Mobile wallets and payment apps like GCash, PayMaya, and banking apps are growing. These platforms offer various services, from bill payments to online shopping, enabling Filipinos to conduct a wide range of transactions easily.
In fact, 82 percent of Filipino consumers tried cashless transactions in 2022. Additionally, the government and private sectors have introduced incentives to encourage cashless transactions. These incentives may include cashback rewards, discounts, or even raffles for users who opt for digital payments. With this spending practice, Filipinos quickly seize these opportunities to maximize their spending power.
How Filipinos manage money is crucial to stabilizing the economy
For the country’s economy to thrive, Filipinos’ spending habits and priorities must be taken into account. Cultural values, economic conditions, and the need for financial resilience all play a role in their decision-making, which has far-reaching implications for the country’s economy.
Consumers are now looking for ways to save money and are more selective in their purchases as a result of the current economic climate. When consumers face trade-offs and difficult choices in-store, FMCG companies must assess which product categories will fare best. And with that, marketers need to identify retailers that will satisfy the unique demands and wants of Filipino consumers.
