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June 23, 2024

Filipino families increase savings by 25% in 2021

As the average Filipino household’s income had hardly increased, their savings were formed largely due to reducing costs, supported by a number of contributing factors, revealed by the analysts of Robocash Group.

Robocash Group analysts estimate that in the second half of 2022, the average monthly income of a Filipino household was P188,000, expenses – P138,000, providing P49,300 worth of savings.

Savings are seeing growth in the future, cumulatively reaching P89,000 by the end of the year.

The most significant factor was the recent COVID-19 pandemic. It enforced a more restrained consumption due to mass restrictions and considerable inflation.

The latter had surged in annual terms to 8.3 percent in June 2021. The share of mandatory spending (food, utilities and transport) increased to 74 percent from 69 percent.

Another factor is the wealth gap in the Philippines that has narrowed, evidenced by the decrease of the Gini coefficient to 0.44 in 2021 from 0.46 in 2018. The society became more equal, manifested in a more distinct formation of the middle class.

Bank deposits, the most straightforward way of investing the savings, have seen an increase to 52 percent last December, note the analysts.

Moreover, digital investing options in the country are becoming more varied. With the Philippine digital banking services gaining in popularity, all this is only the beginning of rapid progress towards the mass digitalization potential of the population, which promises to flourish full force in the near future.