Christmas cheer still propels consumer spending

‘Tis the season to be jolly— and for many Filipinos, it is the prime period to spend, too.

New data from international payments provider Visa show that card transactions by Filipinos rise steadily every December, showing how the Christmas season continues to drive consumer activity in the Philippines.

However, this spending surge plays out differently depending on where Filipinos choose to spend their holidays.

For those staying in the country, spending peaks around Dec. 23, a period Visa describes as the height of the “holiday rush in malls and commercial districts” as shoppers scramble to make last-minute gift purchases ahead of family gatherings.

By contrast, Filipinos traveling overseas tend to open their wallets after Christmas. Their spending peaks on Dec. 29, reflecting “continued leisure and travel-related purchases during overseas vacations,” before tapering off toward the New Year.

Overall, Filipinos abroad register a higher spending peak than those who remain at home. Interestingly, spending drops sharply on Christmas Day itself for both groups, before climbing again in the days between Christmas and New Year.

Visa says the data points to the enduring value of Christmas, whether celebrated at home or abroad.

“Christmas brings people together and our data [underscore] the holidays’ enduring sociocultural and economic significance to the country,” says Jeffrey Navarro, country manager at Visa Philippines.

Online holiday shopping

As e-commerce continues to expand, a growing share of holiday spending is also moving online, according to data from Lazada.

Electronics sales during its 12.12 sale surged by as much as 1,100 percent compared with regular days, making the category the top seller. The spike reflects how “middle-class households are increasingly turning to e-commerce to improve their home environments,” Lazada says.

Branded goods emerged as winners during the sale, as products at LazMall recorded some of the strongest sales during the campaign. Samsung, Dyson, JBL Nike, POCO, Colgate, UFC, BLK Cosmetics and DDPA were among the top-performing brands.

This trend, Lazada says, suggests that Filipino shoppers are becoming more deliberate, increasingly gravitating toward globally trusted brands even in the digital marketplace that’s crowded with low-cost, third-party alternatives.

Foreigners join spending rush

Foreign visitors in the Philippines also contribute to the holiday spending boom, according to Visa data.

Inbound card payments made by foreign tourists also surge during the Yuletide season, with visitors from the United States leading the bunch, followed by those from Taiwan, Japan, South Korea and Singapore.

Much of this spending is concentrated in the buzzing city of Makati, followed by Parañaque, Cebu, Angeles and Davao.

Spending preferences also vary by nationality. Visitors from the United States, South Korea. Singapore, Australia and Hong Kong allocate most of their spending on lodging, while Taiwanese and Japanese tourists spend more on entertainment.

Indian travelers, meanwhile, spend the largest amount on education and government-related payments. Visitors from Canada and the United States prioritize spending on groceries and food during the holidays.

Source: Inquirer

Poor Filipinos ‘carefully spend every peso they have’ to survive

The poor, or the bottom 30 percent of the population, spend most of their limited resources on everyday essentials such as food, house rent, and education.

This was pointed out by Dr. Rogelio Alicor Panao, associate professor at the University of the Philippines, who said that latest data on consumer spending “challenges long-held beliefs about Filipino spending habits.”

Panao, in his analysis of the Bangko Sentral ng Pilipinas’ 2021 Consumer Finance Survey, stated that among the bottom 30 percent, almost three-fifths of every peso, or 58.2 percent is swallowed by essential food.

“[This is] proof that survival still dictates daily choices,” he said.

Do the poor squander? BSP spending data upends stereotypes

Even the richest 30 percent and middle 40 percent spend half their resources on food. However, “the gradual drop” – 51 percent and 57 percent – “shows how rising incomes slowly loosen the grip on the dining table.”

“As earnings climb, families channel more to housing, utilities, and transportation, upgrading homes and gaining mobility,” he explained, stressing that the wealthiest spend the most on furnishings and maintenance, a quiet signal of comfort and stability.”

Yet education flips the script: the poorest devote 5.7 percent of their budget to schooling — over twice what the richest spend — suggesting that among the poor more particularly, education is the surest escape from poverty.

“The biggest surprise though appears to be in the pesos spent on life’s little luxuries,” Panao said, pointing out that contrary to the cliché that the poor waste spare pesos on vices, they actually spend the least on non-essential food and alcohol, just 1 and 1.4 percent respectively.

Middle and upper groups indulge more at 1.9 percent and 2.4 percent respectively.

“For policymakers, the message should be clear–make food affordable, housing livable, and education accessible. The poorest are not squanderers—they are disciplined survivors fighting to get through,” he said.

Source: Inquirer

Philippines found most dishonest in region on money matters

Financial education gaps, economic stress and “face-saving” cultural norms have forced Filipinos to misrepresent their finances, making the Philippines the most dishonest country in Southeast Asia when it comes to money, according to a study.

ROSHI, a Singapore-based fintech firm, said in its Financial Honesty Study: Southeast Asia report that the Philippines had the highest financial misreporting rate in the region at 47 percent, which means that about half are not likely to give an accurate picture of their financial situation.

Indonesia came second at 45 percent, then Singapore at 41 percent.

Vietnam was the most honest, with a dishonesty rate of only 34 percent, followed by Thailand at 36 percent.

The problem, ROSHI noted, was that Philippine society tended to place strong emphasis on social reputation despite financial hardship and literacy gaps, making it hard for financially challenged individuals to seek help.

In Philippine culture, ROSHI pointed out that there was “enormous” pressure to keep face despite financial struggles.

“Admitting difficulties brings shame to the entire family and risks exclusion from social support networks that provide vital help,” ROSHI noted in its report based on a survey across different age groups in six Southeast Asian markets.

This makes misrepresentation of finances a “rational way to preserve social standing and maintain access to economic opportunities,” it added.

Economic challenges are also directly connected with financial dishonesty. The Philippines currently has limited economic opportunities, along with a high cost of living.

Vietnam, on the other hand, has a strong anticorruption focus and expanding opportunities. Its culture also emphasizes trust and community accountability, which both sustain “honest financial behavior.”

Overconfidence bias, or believing that one is better at handling finances than they actually are, is also among the factors that can affect financial transparency.

The Philippines had a high level of overconfidence at 60 percent, while that of Vietnam, which was the most financially honest country in the region, was at around 40 percent.

Risky investments

According to ROSHI, overconfidence can lead to risky investments, low savings and poor spending habits.

At the same time, the Philippines had the highest “present bias” at 68 percent, entailing that people would rather spend money now than save for retirement.

“This reflects the reality that when people struggle to meet daily needs, planning for the future becomes nearly impossible,” ROSHI said.

In terms of age groups, young adults (21 to 34 years old) were the most dishonest in their finances, while older adults (50 to 65 years old) were the most honest. This is a pattern that is present across all countries in Southeast Asia.

It still all boils down to social pressures, ROSHI found.

For example, social media trends often tie financial image to personal identity.

“As a result, many young adults make financial decisions in environments that reward displays of material success, making it costly to acknowledge financial constraints openly,” ROSHI said.

In all, there is a need to intertwine financial education and policy with cultural values and economic realities.

“Markets that achieve natural alignment between cultural values and economic incentives around financial transparency create lasting advantages, while those facing cultural-economic conflicts require recognition and adaptation strategies that acknowledge underlying behavioral patterns,” ROSHI noted.

Source: Inquirer