Economic Overview
The Philippines economy began 2025 on a positive note. GDP posted a year-on-year increase in Q1, supported by the continued strength of wholesale and retail trade, robust financial and insurance activity, and steady manufacturing performance. Inflation moderated to the 2.9–3.1% range, down from previous quarters, offering some relief to Filipino households. However, despite these positive macroeconomic signals, households continue to face high prices and a rising cost of living, with a family of five now needing approximately Php 1,221 per day to live decently.
Consumer sentiment for Q1 2025 reflects persistent caution. Filipinos remain concerned about further price increases and stagnant household income. While price growth has slowed, these pressures continue to constrain household spending, leading to a deprioritization of non-essential categories.
Where Opportunities lie
Despite economic headwinds and shifting consumption patterns, opportunities remain for brands and retailers able to adapt. Beverage categories – such as carbonated soft drinks and packaged water -continue to drive growth in food, while selective non-food categories like Fabcon Liquid is seeing gains. Value-seeking behavior is intensifying, with consumers responding positively to promotions, bundle offers, and pack-size innovation.
The continued expansion of sari-sari stores and the buoyant growth in Mindanao region highlight two clear opportunity areas: hyperlocal channel activation and regional market expansion. Brands that innovate in value delivery and invest in winning at the “last mile” of retail will be best positioned for growth.
