Despite a slower than expected 5.3 percent GDP growth for the Philippines in the third quarter of 2014, there is still confidence that dollar remittances and the Christmas season has energized the economy. CCTV’s Barnaby Lo reported this story from Manila, in the Philippines.
Consumer spending still robust in Philippines despite slower growthDespite a slower than expected 5.3 percent GDP growth for the Philippines in the third quarter of 2014, there is still confidence that dollar remittances and the Christmas season has energized the economy. CCTV's Barnaby Lo reported this story from Manila, in the Philippines.
Like many young Filipinos, 34-year old Genesis Orozco thought about working abroad, especially when the multinational company he used to work for was hit hard by the U.S. recession in 2008. But he ultimately decided to stay home, and it’s paid off.
“The work I have now is IC design [integrated circuit]. Probably a major reason for why we have that opportunity here in the Philippines is because of that… crisis… that especially hit the industries from the developed countries, so now they’re more open to the idea of outsourcing,” Orozco said.
Orozco has been able to live what he calls the Filipino dream. He’s part of a new generation of young, middle class Filipino professionals who have the power to purchase and are actually spending. Consumer spending accounts for about 70 percent of the Philippine economy today.
Consumer spending is one reason the finance and business communities remain optimistic about the Philippine economy, despite a slower than expected growth in the previous quarter.
“In the U.S., the reason why it’s not that healthy is because… if you think about how consumers there spend, they spend based on borrowed money. But in the Philippines consumers don’t spend on borrowed money, it’s largely hard-earned money and also driven by… well recently the growth has been driven by OFW [overseas remittances from Filipino workers] remittances, the strength of the BPO [business process outsourcing] sector,” April Lee-tan, vice president and head of research for the Col Financial Group said.