Domestic concerns fuel sharp drop in Philippines consumer sentiment

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March 30, 2026 | 12:00am

MANILA, Philippines — Consumer sentiment in the Philippines posted the steepest drop among major Asian markets in 2025, even as it remained one of Southeast Asia’s biggest and fastest-growing consumer markets, according to a study by Roland Berger.

In its latest Asia Consumer Study, the share of Filipino consumers who said they were positive about the future fell to 35 percent in 2025 from 53 percent in 2024, which the report described as “the sharpest decline among major Asian markets.”

“The Philippines is experiencing a significant shift in consumer sentiment,” the study said. “This erosion of confidence is driving consumers to become even more price aware in their everyday shopping, especially for fast-moving consumer goods and essentials.”

The report noted that the Philippines stands out as a paradox, where “real gross domestic product growth provides momentum, but it does not uniformly translate into consumer confidence,” signaling rising caution among households despite economic expansion.

This places the country behind regional peers such as Malaysia, where 62 percent of consumers are optimistic, and Indonesia at 58 percent, underscoring a more subdued outlook among Filipino households.

The study attributed the decline in sentiment to growing caution among consumers, with households becoming more price-sensitive and deliberate in their spending decisions.

In an interview, Hugo Texier, partner at Roland Berger, said the sharp drop was driven largely by domestic concerns.

“Typically, this is driven all by a political or economical event,” Texier said. “There is fear of inflation and wage stagnation. Some political developments created a sense of uncertainty and consumers react very dramatically to those events.”

Across Asia, consumers are increasingly prioritizing essentials, reflecting tighter household budgets and lingering cost pressures. The report said groceries remain the only category expected to grow across all markets, while discretionary spending continues to soften.

In the Philippines, spending remains concentrated on groceries, household goods and education, highlighting a defensive consumption pattern. This shift is also evident in behavior, with Filipinos relying more on promotions, bundles and installment schemes to stretch budgets.

Texier said this reflects a broader adjustment rather than a collapse in demand. “It doesn’t mean they will not spend, but it means they are more cautious,” he said.

Despite weaker sentiment, the Philippines continues to stand out as a high-potential consumer market.

“I don’t think the Philippines is lagging behind peers… it is the second biggest consumer market in Southeast Asia… and the Philippines has one of the highest growth rates,” Texier said.

“So if you are a retailer and a brand, the Philippines is a huge opportunity… a big engine in Southeast Asia for growth.”

The report also pointed to strong demand for “affordable premium” or “masstige” products, particularly in fashion and beauty, driven by aspirational consumers seeking quality at accessible price points.

Looking ahead, rising fuel prices and global uncertainties could further weigh on consumption. “For a large part of the population, petrol is a big part of the consumer wallet… this increase means… consumption will be impacted,” Texier said.

He added that prolonged price pressures could slow spending growth, particularly for discretionary items such as travel, dining and leisure.