Spending pattern in the Philippines is expected to change, once the country breaks the $2,000-per-capita income level, which may come soon.
“Very quietly, the Philippines per capita income is close to $2,000. Once we cross that benchmark, the world changes,” said Aurelio Montinola III, president and chief executive of the Bank of the Philippine Islands.
Economists said a higher income level would mean larger allocation for non-food items, such as housing, transportation, electronics, telecommunication, travel, healthcare, education and other services.
Montinola, who also heads the Bankers Association of the Philippines, said a higher level of income in the country would mean better prospects for the banking industry.
He cited the case of Thailand, which had seen tremendous growth in demand for housing and cars, after its per capita income crossed the $2,000 mark.
The Philippines was considered the second most prosperous country in Asia after Japan in the 1950s up to 1960s, but it was subsequently surpassed in terms of per capita income level by Korea, Taiwan, Singapore, Hong Kong, Malaysia, Thailand, China and Indonesia.
The Philippines had a per capita income of more than $1,800 as of 2009, but the figure was largely dependent on the foreign exchange rate.
The National Statistical Coordination Board reported that the Philippines had a gross domestic product of P7.7 trillion and a gross national product of P8.7 trillion in 2009.
This translated to a GDP per capita income of P83,152 or $1,807, based on a population projection of 92.23 million and foreign exchange rate of P46 to the US dollar last year.
Montinola expects a double-digit growth in bank lending in 2010, on the back of the resurgent real estate sector and strong demand for motor vehicles among the middle-income market.
However, he said the future belonged to the small businesses, which needed bank financing to grow and take advantage of the rising income of the Filipino consumers.
Montinola said the Bank of the Philippine Islands had actually changed its strategy to become less dependent on multinational companies and large domestic corporations as their biggest clients. –Roderick T. dela Cruz, Manila Standard Today