HOUSEHOLD consumption is expected to decelerate until June this year as consumer confidence dips due to health concerns and social distancing measures, the National Economic and Development Authority (Neda) said.
In particular, Neda said a five to 10 percent decline in household consumption of non-essential commodities could result in a loss of gross value added of P45 to P94 billion, equivalent to 0.2 to 0.5 percent of the gross domestic product (GDP) and reduce employment by 16,500 to 62,500 workers.
Non-essential commodities are the likes of alcoholic beverages and tobacco, clothing and footwear, furnishings, household equipment and routine household maintenance, recreation and culture, restaurants and hotels and miscellaneous goods and services.
GDP is a monetary measure of the market value of all the final goods and services produced in a specific period of time.
Retail player and spokesperson of the Philippine Retailers Association-Cebu Chapter Robert Go foresees a slowdown in supermarket demand during the enhanced community quarantine (ECQ) period.
“Heavy buying is to stock up for a week on goods. Supply side is dwindling since there is lack of mobility in Manila,” said Go.
According to Go, demand during rush buying goes up by 30 to 50 percent. However, he warned that store operations may be affected as people manning the stores may encounter difficulties reporting for work due to limited transportation during the ECQ period.
Moreover, the agency noted that the viral pandemic will also hurt the cash remittances of overseas Filipino workers (OFW).
Neda said it expects approximately P5.7 billion in foregone remittances, if 30 percent of OFWs (or around 100,000 employees) employed in tourism and tourism-related services lose their jobs as demand in the tourism sector plummets worldwide for five months.
“This scenario will result in a loss of gross value added of P3.9 to P8.5 billion, equivalent to 0.02 to 0.04 percent of GDP, and local employment loss of 1,700 to 4,500 workers.
Money sent home by OFWs fuels consumer spending in retail and housing, among others. (KOC WITH CSL)