Philippines logs Asia’s longest consumer spending slump
A view of Metro Manila seen from Quezon City on Wednesday, 2 April 2025, following the deadly earthquake in Myanmar. The Palace urged local government unit (LGU) officials to conduct building inspections and enforce strict permit issuance as a precaution against the Big One.
Analy Labor
The Philippines has recorded Asia-Pacific’s longest uninterrupted consumer spending contraction, with household spending remaining in the downturn for 11 consecutive quarters as inflation and labor market pressures weigh on purchasing power, according to Visa.
Visa’s Spending Momentum Index (SMI) showed that the Philippines’ index stayed below 94 from the first quarter of 2024 through the third quarter of 2026, making it the only tracked economy in the region to experience a continuous multi-year decline.
The index rose slightly to 91.5 in the third quarter from 91.3 in the previous quarter but remained below the 100-point threshold that separates spending expansion from contraction.
Visa Business and Economic Insights economists Simon Baptist and Minakshi Barman attributed the continued weakness to rising prices and persistent labor market challenges.
“However, the continued weakness in the Philippines’ overall SMI reflects higher inflation and weaker labour market conditions weighing on household spending,” they said.
Headline inflation accelerated to 7.2 percent in September, matching the peak recorded in April during the height of the US-Iran conflict. Higher food, electricity and fuel prices were the primary drivers.
Unemployment, meanwhile, stood at 5.3 percent in August, improving from 6 percent in July but remaining above the 3.9 percent recorded in August 2025.
The index showed discretionary spending at 92.9, higher than the 91.3 recorded for non-discretionary spending, which covers essential expenses such as food, healthcare, utilities and education.
Other Asian economies showed mixed results. Vietnam maintained an index between 97 and 103 during the first three quarters of 2026, while Thailand recovered from contraction to a weakening state. India slipped into contraction in September after steady spending in July and August.
Indonesia and Malaysia also entered contraction territory in the third quarter.