THE upcoming P60 wage hike in Metro Manila may not translate into a much-needed lift in consumer spending, with Filipino households expected to remain cautious amid economic uncertainty, according to ANZ Research.
In its latest economic outlook report for Asia, the research arm of Australia-based ANZ Banking Group Ltd. cut its 2026 growth forecast for the Philippines to 3.5 percent from 3.9 percent.
If realized, this would put growth at the lower end of the Development Budget Coordination Committee’s (DBCC) recalibrated target range of 3.5 to 4.5 percent for the year.
‘Even if wages pick up, Filipino consumers are unlikely to raise spending proportionately and will likely prefer to save amid heightened uncertainty,’ ANZ Research said.
The Department of Labor and Employment (Dole) has earlier noted that a P60 increase in the daily minimum wage for workers in Metro Manila is scheduled to take effect by September 26.
It is expected to directly benefit up to 1.1 million workers.
The latest data from the Philippine Statistics Authority (PSA) showed household consumption grew by just 2.8 percent in the second quarter, the slowest pace since the pandemic-induced contraction in the first quarter of 2021, when household spending fell by 4.8 percent.
Excluding the pandemic period, the second-quarter growth in household consumption was the weakest since the third quarter of 2010, when it expanded by 2.6 percent.
The weak household spending, in turn, pushed the country’s second quarter growth to a mere 2.3 percent, slower than the 2.8 percent recorded in the first quarter and the 5.4 percent in the same period last year.
ANZ Research said a broader recovery in economic activity, including a revival in government infrastructure spending, will be needed to support household consumption.
‘The government expects infrastructure spending to pick up in [the second half], though we are more skeptical,’ it said.
Government capital spending has remained in contractionary territory amid increased scrutiny over budget disbursements.
While the Department of Budget and Management had released 99.5 percent of the budget allocated to the Department of Public Works and Highways by end-August, ANZ Research said the actual amount disbursed will be ‘crucial’ to sustaining economic momentum in the coming months.
Official data showed DPWH had received P527.7 billion, or 99.5 percent, of its P530.1-billion allotment as of end-August.
ANZ Research also flagged weaker government infrastructure support next year, with total capital outlays in the 2027 budget estimated at P1.3 trillion, equivalent to 4 percent of GDP.
This would mark the third consecutive year of decline in capital outlays as a share of GDP and the lowest allocation since 2016, it added.
‘As a result, even though the pending funds from 2026 budget will provide a push to domestic activity, adequate support from infrastructure spending will likely be missing in 2027,’ it said.
The Philippine economy grew by just 2.6 percent in the first half of 2026, sharply slower than the 5.4-percent expansion recorded in the same period last year.
In the near term, ANZ Research said exports, particularly those benefiting from sustained demand for electronics, are expected to provide the main support to economic growth.
Earlier, the Department of Economy, Planning, and Development (DepDev) said the economy needs to grow by an average of 4.4 percent in the second half to reach the lower end of the government’s growth target.