Manilans reducing spending

NINE out of 10 Filipinos in Metro Manila have cut down on their spending out of fear they will make less money as a result of the economic crunch, but are optimistic the economy will get better, a survey says.

Forty-three percent of the 1,000 Filipinos surveyed think the economy is weak but believe it will improve soon, says the study by Synovate, the market research arm of Aegis Group plc, which has over 6,000 employees across 62 countries.

It says the Filipinos’ outlook is more optimistic this time around compared with that in August last year, when the last survey was taken. That was when 69 percent said their greatest fear was losing their jobs and household income.

Synovate had surveyed Metro Manila residents aged 15 to 64 across all income levels as part of a global “State of the Economy” survey.

“Filipinos definitely have a more positive outlook on the economy when compared with bigger markets,” Carole Sarthou, managing director of Synovate Philippines, said in a statement.

“For instance, close to two- thirds of respondents in the United States (63 percent), Japan (63 percent), and France (64 percent) believe their economy is going downhill and will get worse before it gets better compared to only 28 percent of Filipinos.”

The study also asked consumers if they had made changes in their handling of money in the last six months, and it showed that they were saving less (39 percent), investing less (39 percent), as well as generally spending the same amount on basic necessities but less on luxury items.

Close to two-thirds (61 percent) admitted they had done less impulse-related buying in the last six months.

“We found that Filipinos were not the only ones to cut back as comparisons with other Asian markets showed that people from Malaysia, Japan and Taiwan also shared the same sentiments,” Sarthou said.

Filipinos were paying more attention to food prices, with a majority acknowledging that they were now more likely to check the price of their food items and to make price comparisons with other food-related products before buying anything.

“Interestingly enough, more than half said they have resorted to storing more food at home in case prices go up,” Sarthou said.

When it came to salaries and income, close to quarter of those surveyed believed they were earning the same amount of money while 23 percent said they were taking home less. About 44 percent said they had earned more money in the last six months.

The survey also asked people which items they had already given up and which other items they were prepared to give up in the next six months in view of the economic situation.

It found that hi-tech gadgets (28 percent) and big-ticket items (26 percent) such as plasma television sets and electrical appliances were the first items to be sacrificed, while holiday and leisure travel (24 percent) as well as dining out (21 percent) were next on the list.

While close to two-thirds of the respondents said they were worried but could not stop spending immediately, a bigger percentage or 66 percent acknowledged they had made life-altering decisions such as postponing marriage, having children, moving house, changing jobs as well as pursuing higher education.

“It’s evident that the current economic situation has impacted the lives of everyday Pinoys, but in spite of this worrying trend, the people we interviewed were generally determined and upbeat with over three quarters (89 percent) agreeing they will always find a way to afford some items that make them feel good,” Sarthou said. –Elaine Ramos Alanguilan, Manila Standard Today