ING: PH trails Asia in consumer recovery

MANILA, Philippines – The Philippines remains one of Asia’s slowest consumer recovery stories, according to ING Bank, which pointed to weak productivity growth and an emerging slowdown in remittance inflows.

In a commentary, Deepali Bhargava, ING’s regional head of research for Asia-Pacific, said consumer spending across the region was rebounding as inflation eases, asset prices rise and incomes improve, though the pace of recovery remains uneven.

READ: Weak confidence clouds PH spending outlook

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Japan, Australia, Singapore and India have largely returned to prepandemic consumption levels, underpinned by stronger structural demand, she said. Meanwhile, consumer spending is also gaining momentum in South Korea and Taiwan, helped by artificial intelligence-led growth, rising real incomes and more accommodative policy settings.

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The Philippines, by contrast, remains among the region’s laggards, alongside Thailand, Indonesia and Malaysia, where consumer recoveries have been slower to take hold.

Bhargava attributed the country’s weaker performance in part to a shrinking export-oriented sector, which typically generates higher-productivity jobs than domestically focused industries. While the information technology and business process outsourcing sector has continued to expand, manufacturing has stagnated amid an appreciating real effective exchange rate, elevated energy costs, shifting technology trends and a difficult regulatory environment.

“This shift away from higher-productivity, export-oriented sectors toward lower value-added activities poses a structural constraint on income growth and, by extension, on the sustainability of consumption,” the ING economist explained.

The ING economist also warned that the country’s heavy reliance on overseas remittances leaves household spending vulnerable to external shocks.

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Unlike in some regional peers, remittances in the Philippines are used primarily for day-to-day consumption rather than savings or investment, making domestic demand more dependent on income earned abroad than on local credit conditions.

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Bhargava pointed to early signs of that vulnerability. Overseas remittance growth slowed to about 2 percent from a year earlier, with inflows falling to an 11-month low of roughly $2.7 billion in April 2026 as conflict in the Middle East, a major destination for Filipino workers, disrupted economic activity.

“As such, the recent slowdown and rising volatility could exert a more persistent drag on inward remittances as conditions in the Middle East region take time to stabilize,” Bhargava said. INQ

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