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The Philippines has recorded the longest uninterrupted consumer spending contraction in the Asia-Pacific region, marking 11 consecutive quarters of decline, according to data from Visa. Visa’s Spending Momentum Index (SMI) indicates that the Philippines is the only economy in the region to experience a continuous multi-year downturn. From the first quarter of 2024 through the third quarter of 2026, the country’s index remained below 94. While the index saw a marginal increase to 91.5 in the third quarter of 2026, up from 91.3 in the previous quarter, it remains well below the 100-point threshold that distinguishes spending expansion from contraction. Visa Business and Economic Insights economists Simon Baptist and Minakshi Barman attributed the prolonged weakness to the impact of inflation and labor market instability on household purchasing power. "The continued weakness in the Philippines’ overall SMI reflects higher inflation and weaker labour market conditions weighing on household spending," the economists stated. Economic data shows headline inflation reached 7.2 percent in September, a level matching the peak observed in April. This inflationary pressure was primarily driven by rising costs for food, electricity, and fuel. Meanwhile, the unemployment rate was recorded at 5.3 percent in August. While this represents an improvement from the 6 percent rate reported in July, it remains higher than the 3.9 percent unemployment rate recorded in August 2025. A breakdown of the index shows that discretionary spending stood at 92.9, while non-discretionary spending—which encompasses essential costs such as food, healthcare, utilities, and education—was lower at 91.3. The performance of other Asian economies remained varied during the same period. Vietnam maintained an index between 97 and 103 throughout the first three quarters of 2026. Thailand showed signs of recovery from contraction, moving into a state of weakening, while India, Indonesia, and Malaysia all entered contraction territory during the third quarter of 2026. Article source: The Daily Tribune | Image credit: The Daily Tribune
The Philippines has recorded the longest uninterrupted consumer spending contraction in the Asia-Pacific region, marking 11 consecutive quarters of decline, according to data from Visa. Visa’s Spending Momentum Index (SMI) indicates that the Philippines is the only economy in the region to experience a continuous multi-year downturn. From the first quarter of 2024 through the third quarter of 2026, the country’s index remained below 94. While the index saw a marginal increase to 91.5 in the third quarter of 2026, up from 91.3 in the previous quarter, it remains well below the 100-point threshold that distinguishes spending expansion from contraction. Visa Business and Economic Insights economists Simon Baptist and Minakshi Barman attributed the prolonged weakness to the impact of inflation and labor market instability on household purchasing power. “The continued weakness in the Philippines’ overall SMI reflects higher inflation and weaker labour market conditions weighing on household spending,” the economists stated. Economic data shows headline inflation reached 7.2 percent in September, a level matching the peak observed in April. This inflationary pressure was primarily driven by rising costs for food, electricity, and fuel. Meanwhile, the unemployment rate was recorded at 5.3 percent in August. While this represents an improvement from the 6 percent rate reported in July, it remains higher than the 3.9 percent unemployment rate recorded in August 2025. A breakdown of the index shows that discretionary spending stood at 92.9, while non-discretionary spending—which encompasses essential costs such as food, healthcare, utilities, and education—was lower at 91.3. The performance of other Asian economies remained varied during the same period. Vietnam maintained an index between 97 and 103 throughout the first three quarters of 2026. Thailand showed signs of recovery from contraction, moving into a state of weakening, while India, Indonesia, and Malaysia all entered contraction territory during the third quarter of 2026.
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