FILIPINO households are cutting back on purchases and increasingly turning to cheaper retail channels as financial pressure begins to weigh on consumption, with fast-moving consumer goods (FMCG) spending contracting in the second quarter of 2026.
FMCG spending fell by 0.8 percent year-on-year in the second quarter, reversing the 1.6-percent growth recorded on a moving annual basis, according to Worldpanel by Numerator.
The slowdown comes as consumers buy smaller baskets, seek cheaper products and become more dependent on promotions and discounts to stretch household budgets.
Laurice Obana, shopper insights director of Worldpanel by Numerator, said Filipino households are again facing financial constraints after signs of improvement last year as global and economic pressures intensify.
Worldpanel data showed 81 percent of households that were previously breaking even or already short on money responded to tighter budgets by cutting spending, far exceeding other coping strategies such as looking for extra work (at 29 percent) or borrowing from relatives and friends (24 percent).
That restraint is already changing how households divide their money, with average spending per buyer virtually flat between the first and second quarters at P130,091 and P129,822, respectively.
Households maintained or increased spending on necessities such as fresh food, meat and produce, transportation, education and utilities while reducing allocations for grocery items, recreation and travel, savings, fashion, beauty and wellness and digital services.
Nearly half, or 49 percent, of the average Filipino household budget in the second quarter went to essentials, while FMCG accounted for 10 percent and discretionary expenses took up 34 percent.
Food has remained particularly difficult to cut, accounting for more than 75 percent of take-home FMCG spending as households prioritize products consumed at home.
Pressure on household finances, however, is reshaping where those purchases are made, with discounters emerging as the fastest-growing retail channel during the period.
Spending through discounters surged by 40 percent in the second quarter from a year earlier, while sari-sari stores posted 2-percent growth and convenience stores edged up by 1 percent.
By contrast, supermarkets and hypermarkets recorded a 5-percent decline, market stalls fell by 4 percent, groceries dropped by 4 percent and drugstores registered the steepest contraction at 14 percent.
Worldpanel said proximity remains important in determining where Filipinos shop, but consumers are increasingly weighing product assortment and value as they become more selective about where they spend.
Household sentiment also deteriorated sharply following the onset of the Middle East conflict on February 28: those expecting their finances to worsen over the next 12 months increased by 26.7 percentage points from the January-to-March period, while pessimism over the country’s socioeconomic outlook rose by 33 points.
Grocery and fuel prices remained among households’ biggest concerns, alongside fuel shortages, broader economic conditions, geopolitical conflict, climate change and food shortages.
For retailers, the shift means growth will increasingly depend on giving cash-strapped shoppers a clear reason to return as consumers trade down, trim their baskets and become more deliberate about every peso they spend.