Consumer Lifestyles in the Philippines

CONSUMER LIFESTYLES IN THE PHILIPPINES
Euromonitor International August 2012

CONSUMER LIFESTYLES IN THE PHILIPPINES

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LIST OF CONTENTS AND TABLES
Consumer Habits in Context......................................................................................................... 1 Current Behaviour Within the Broader Economic Climate ........................................................ 1 Consumer Confidence .............................................................................................................. 1 Misery Index ............................................................................................................................. 2 Chart 1 Misery Index 2006-2011 ............................................................................... 2 Learning ....................................................................................................................................... 3 School Life ................................................................................................................................ 3 University Life ........................................................................................................................... 6 Adult Learning .......................................................................................................................... 6 Chart 2 Chart 3 Number of Students in Higher Education and Expenditure per Student in PPP Terms 2006-2011 ............................................................................. 7 Regional Ranking of Number of University Students 2011........................... 7

Working Habits ............................................................................................................................. 8 Working Conditions................................................................................................................... 8 Women in the Workplace.......................................................................................................... 9 Commuting ............................................................................................................................. 10 Alternative Work Options ........................................................................................................ 10 Retirement .............................................................................................................................. 11 Chart 4 Chart 5 Chart 6 Employed and Unemployed Population and Labour Force Participation Rate 2006-2011 ..................................................................... 11 Population Aged 15-64 Compared with Old-Age Dependency Ratio 2000-2020 .................................................................................................. 12 Regional Ranking of Female Employment Rate 2011 ................................ 12

Eating Habits .............................................................................................................................. 13 Dining in.................................................................................................................................. 13 Dining Out ............................................................................................................................... 14 Café Culture ........................................................................................................................... 15 Snacking Habits ...................................................................................................................... 15 Attitudes Towards Food Trends .............................................................................................. 16 Chart 7 Chart 8 Per Capita Expenditure on Consumer Foodservice by Chained and Independent 2011 ...................................................................................... 16 Regional Ranking of Average Supply of Food Calories per Day 2011 ....... 17

Drinking Habits ........................................................................................................................... 17 Attitudes Towards Drinking ..................................................................................................... 17 Drinking Inside the Home ....................................................................................................... 19 Drinking Outside the Home ..................................................................................................... 19 Chart 9 Chart 10 Per Capita Consumption of Alcoholic Drinks and Soft Drinks by Category 2011............................................................................................ 20 Regional Ranking of Alcoholic Drinks Consumption: Off-trade vs Ontrade 2011 .................................................................................................. 20

Grooming Habits ........................................................................................................................ 21 Attitudes Towards Personal Care ........................................................................................... 21 Attitudes Towards Beauty ....................................................................................................... 22 Male Grooming ....................................................................................................................... 23

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Use of Hair Care Salons, Spas, Nail and Beauty Parlours ..................................................... 24 Chart 11 Chart 12 Value Sales of Beauty and Personal Care Key Categories 2006-2011 ...... 24 Regional Ranking of Per Capita Sales of Men's Grooming Products 2011 ........................................................................................................... 25

Fashion Habits ........................................................................................................................... 26 Attitudes Towards Clothing ..................................................................................................... 26 Attitudes Towards Footwear ................................................................................................... 26 Attitudes Towards Personal Adornment ................................................................................. 27 Attitudes Towards Accessories/luxury Goods ......................................................................... 28 Chart 13 Chart 14 Consumer Expenditure on Clothing and Footwear 2006-2011................... 28 Regional Ranking of Consumer Expenditure on Clothing and Footwear as a Proportion of Total Consumer Expenditure 2011................ 29

Health and Wellness Habits ....................................................................................................... 29 Public Versus Private Healthcare ........................................................................................... 29 Attitudes To Health and Well-being ........................................................................................ 30 Over-the-counter Versus Prescription-only Medicines (otc Vs Pom) ...................................... 30 Sport and Fitness.................................................................................................................... 31 Obesity ................................................................................................................................... 32 Chart 15 Chart 16 Growth in Public and OTC Expenditure on Pharmaceuticals Compared with Healthy Life Expectancy at Birth 2006-2011 ..................... 33 Regional Ranking of Obese and Overweight Population 2011 ................... 33

Smoking Habits .......................................................................................................................... 34 Smoking Prevalence ............................................................................................................... 34 Attitudes To Smoking.............................................................................................................. 34 Chart 17 Chart 18 Smoking Prevalence amongst Men and Women 2006-2011 ..................... 35 Regional Ranking of Smoking Prevalence 2011 ........................................ 35

Shopping Habits ......................................................................................................................... 36 Main Household Food and Non-food Consumables Shop ...................................................... 36 Top-up Food Shopping ........................................................................................................... 37 Shopping for Big-ticket Items .................................................................................................. 37 E-commerce and M-commerce .............................................................................................. 38 Personal Shopping ................................................................................................................. 39 Chart 19 Chart 20 Importance of Hypermarkets, Supermarkets and Discounters within Grocery Retailing 2011 .............................................................................. 39 Regional Ranking of Sales through Internet Retailing 2011 ....................... 40

Leisure Habits ............................................................................................................................ 41 Staying in ................................................................................................................................ 41 Going Out ............................................................................................................................... 42 Public Holidays, Celebrations and Gift-giving ......................................................................... 43 Culture .................................................................................................................................... 43 Chart 21 Regional Ranking of Consumer Expenditure on Leisure and Recreation as a Proportion of Total Consumer Expenditure 2011 ............. 44

DIY and Gardening Habits.......................................................................................................... 44 Attitudes To DIY...................................................................................................................... 44 Attitudes To Gardening ........................................................................................................... 45 Chart 22 Number of Home Owners and New Dwellings Completed 2006-2011 ....... 45

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Chart 23

Regional Ranking of Home Owners as a Proportion of Total Households 2011 ....................................................................................... 46

Pet Ownership Habits ................................................................................................................. 46 Attitudes To Pet Ownership .................................................................................................... 47 Chart 24 Chart 25 Pet Population and Sales of Pet Food 2006-2011 ..................................... 47 Regional Ranking of Pet Ownership 2011.................................................. 48

Travel Habits .............................................................................................................................. 49 Getting Around ....................................................................................................................... 49 Use of Public Transport .......................................................................................................... 50 Air Travel ................................................................................................................................ 50 Chart 26 Number of Scheduled Airline Passengers Carried, Kilometres Travelled by Air Compared Length of Public Railway Network Operated and Road Network and Consumer Expenditure on Transport Services ..................................................................................... 51 Regional Ranking of Possession of Passenger Cars 2011 ........................ 52

Chart 27

Vacation Habits .......................................................................................................................... 53 Attitudes To Taking Holidays .................................................................................................. 53 Main Holiday-taking Trends .................................................................................................... 53 Domestic Versus Foreign Holidays ......................................................................................... 54 Preferred Travel Methods ....................................................................................................... 55 Popularity of Different Types of Holiday Activities .................................................................. 55 Chart 28 Chart 29 Domestic and Outgoing Tourist Expenditure by Sector 2006-2011 ............ 55 Regional Ranking of Holiday Departures 2011 .......................................... 56

Financial Habits .......................................................................................................................... 57 Attitudes Toward Payment Methods ....................................................................................... 57 Savings ................................................................................................................................... 58 Loans and Mortgages ............................................................................................................. 58 Chart 30 Chart 31 Consumer Lending Compared with Savings and Savings Ratio 20062011 ........................................................................................................... 59 Regional Ranking of Financial Cards in Circulation 2011 ........................... 60

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CONSUMER LIFESTYLES IN THE PHILIPPINES
CONSUMER HABITS IN CONTEXT Current Behaviour Within the Broader Economic Climate
In 2011, the Philippine economy grew by 3.7% over prior year, reaching Ps9.7 trillion. This rate was slower than the 7.6% recorded between 2009 and 2010. Slower growth was the result of declines in the key electronic exports market as well as cuts in government spending. According to Motoo Konishi, the World Bank‟s Country Director for the Philippines, in 2011 the country‟s strong macroeconomic fundamentals, political stability and government policies strongly committed to improving governance and reducing poverty have set the ground for sustained longer term growth and a sustained rise in incomes. In line with broader economic growth, disposable incomes have been increasing. In 2011, annual disposable income per capita reached Ps75,911, up from Ps72,881 in 2010, growth of just more than 4%. Between 2009 and 2010, disposable income grew by only 1.4%. Similarly, annual consumer expenditure per capita reached Ps73,741 in 2011, up from Ps70,749 in 2010 and up from Ps69,750 in 2009. Both income and spending declined slightly between 2008 and 2009, a result of the impact of the economic downturn. Despite growth, poverty remains a concern, with the Philippines having a Gini Index reading of 45.3 in 2011. To bridge income inequality and reduce poverty, the government continued its efforts in 2011 to implement large-scale social welfare programmes meant to improve access to education, healthcare and jobs. The government has pumped badly needed investment into the country‟s infrastructure and boosted social spending and this is expected to contribute to growth in coming years. As well, it is expected that rising household consumption, driven by an increase in remittances from overseas workers and a liberal monetary policy, will also be a key driver of growth. Mitzi de Dios, an analyst at financial services company CLSA, recently wrote that “the country is on the cusp of another investment cycle for the first time in 15 years driven by political stability, rising business confidence, low interest rates, robust balance sheet and the country‟s long-term demographic potentials”. The Asian Development Bank recently projected that GDP will grow at a rate of nearly 5% in 2012 and by 5% in 2013. According to Neeraj Jain, ADB‟s Country Director for the Philippines, “Remittances and lower inflation will sustain private consumption and strong business sentiment will continue to support private investment. A pickup in public investment and accommodative monetary policy will also aid the Philippine economy. However, issues like poor infrastructure and weak governance must be tackled if the country‟s economic gains are to benefit all”.

Consumer Confidence
By the end of 2011, consumer confidence, as measured by the Consumer Expectations Survey by the Central Bank of the Philippines (BSP), had slipped slightly, in large part due to the damage to crops and businesses caused by typhoons Pedring and Quiel, the higher prices of basic commodities and unemployment. That pessimism has continued into 2012 according to recent findings in the Consumer Expectations Survey. According to news website rappler.com “Confidence among Filipino consumers is weakening with many Filipinos citing jumps in the cost of goods, unemployment

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and household expenditures... „Concerns over the increase in transport fares..., the expected upward adjustments in power rates... and the anticipated hike in tuitions fees could have... put additional strain on family finances, pushing household expenditures up and real income down,‟ said the BSP. “The latest BSP survey also showed that all economic groups -- low, middle and high -recorded drops in sentiment about the economic condition of the country. High-income respondents were still optimistic about family income and financial situation. Those in the middle-income bracket remained upbeat at least about family income. While those in the lowincome group were pessimistic about all three - the country, their family's income and their financial situation,” said the report.

Misery Index
In 2011, the reading on the Philippine‟s Misery Index (calculated by adding the inflation rate to the unemployment rate) reached 11.4% based on an inflation rate of 4.4% and an unemployment rate of 7%. This was down slightly from the reading of 11.1% recorded in 2010, with an increase in inflation and a decline in unemployment in 2011. Rising inflation was a concern in 2011 and remained a concern in the early months of 2012. On the other hand, many believe that the government‟s tighter spending policies helped reduce inflation in 2011, particularly in regard to rapidly rising fuel prices. As well, the Central Bank has recently said that it deems inflation “manageable,” at least in the short term. A recent article in Bloomberg News said “Philippine inflation is expected to be within the lower half of the central bank‟s goal [for 2012] and in 2013, as subdued global activity tempers commodity price increases”. In particular, it is expected that lower oil prices will help keep inflation in check. In 2011, the unemployment rate averaged 7%, down slightly from 7.3% in 2010. Regardless of the improvement, however slight, unemployment is still a concern to many. According to Cayetano W. Paderanga Jr., Planning Secretary of the Socioeconomic Department, “In 2011, the country generated more employment compared to 2010. Employment levels rose...largely on the strength of the continued growth in services and the recovery in agriculture, although there was a slowdown in the industry sector”. The government is expected to continue to invest heavily to boost employment and create more jobs. According to the National Economic and Development Authority (NEDA), among the key employment generation initiatives of the 20112016 Philippine Development Plan are massive infrastructure projects. Chart 1 Misery Index 2006-2011

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Source: Note:

Euromonitor International Calculated by adding the country‟s unemployment rate to its inflation rate.

LEARNING School Life
The education system in the Philippines comprises mainly formal schooling systems, which require a sequential learning process that takes place within school premises. This consists of six years of primary school, better known as elementary school, and four years of high school, with pre-school completion having already become a requirement to entry into first grade. The government‟s recent initiative of mandating pre-school has resulted in whopping growth of 31% in enrolment in pre-schools, as parents no longer have the option of keeping their pre-school age children at home until they reach the age of seven. In January 2011, the House of Representatives approved a bill institutionalising kindergarten education for children aged five and older who want to study in public schools. The Kindergarten Education Act also assures free tuition for public kindergarten school students. However, Teachers Dignity Coalition, a

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group of Filipino educators, has expressed concern regarding a shortage of kindergarten teachers. Although some such concerns will need to be adressed, the move is a strong positive step with the aim that Filipinos should get a greater education base. In 2011, the Department of Education reportedly released subsidy funds for government kindergartens amounting to Ps2.3 billion. The Education News Philippines website further reports that funding for 2012 increased to Ps2.4 billion. Indeed, parents are becoming more informed and aware of early childhood education, which is also contributing to the rise in pre-school enrolment. After all, government requirement of preschool completion only covers Kinder 1 and Kinder 2, but more parents are sending their children to pre-school by the age 3. The availability of more pre-schools, mostly privately run or run by religious groups, that cater more to play-based learning and child-centered learning, including the School of Tomorrow system, has contributed to this rise. This is because parents are becoming more conscious about letting their children get the most out of life by not pressuring them with academic achievement or performing as well as or better than their peers. This is easier for parents of higher incomes, but low-income and rural groups still have to make do with the public school system, which although basic in terms of quality, offers some solid pre-school learning. Public pre-schools are still mostly limited to traditional formal schools, albeit augmented by a budget from the Department of Education. According to the Budget Secretary in a news article, this move by the Department of Education was well-supported by the budgetary agency because it would help prepare children for grade school, thus improving the chances of alleviating poverty in the long run. Also, over the past decade, a growing number of consumers has taken interest in the nonformal system of education, the most significant of which is the Alternative Learning System (ALS). ALS allows learning outside the school premises, albeit still guided by a structured curriculum. This is designed mostly for the needs of individuals who, for some reason or another, cannot go to formal schools, whether temporarily or permanently. For example, out-ofschool youths can take advantage of the ALS, and then when they are ready to go back to formal school, they take a test with the Department of Education to determine what grade or year level to which they can then proceed. School in the Philippines starts in June, with parents typically crowding the department stores and office supply stores to buy their children‟s school supplies during the last week of May or the first week of June. Some private schools require their students to purchase school supplies from the school, but the majority allow students to buy their notebooks from outside sources. Others have the teachers specify what kind of notebooks to buy, so students wait until the first day of school to find out. Other supplies like pens, stationery and crayons and art supplies like paper and cardboard are purchased throughout the year on an on-demand basis. Schools in the Philippines pay marked attention to sports, with various sporting endeavours occurring throughout the year. For example, in 2012, the Department of Education generously allocated funds to the Palarong Pambansa, a sort of national Olympics for students that is typically attended by some 10,000 public-school students. Parents continue to be supportive of their children‟s sporting pursuits, as they believe that it fosters the students‟ holistic growth. In fact, it is common for private high schools and universities to offer scholarship for varsity players in men‟s basketball and women‟s volleyball, if only to gain a regional or national trophy for the school. The majority of schools mandate school uniforms, and these are typically bought ahead of school opening days. The typical school uniform for school-age children in the Philippines is relatively consistent across all income levels. Only a few state universities and a small number of public elementary schools do not require uniforms. Uniforms of school girls typically comprise a blouse and skirt, sometimes with the addition of a tie, black closed shoes and white socks. A recent telling sign of growing tolerance of fashion in schools, is the trend among high-school

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girls in some upscale schools to shift from traditionally-accepted flat soled black school to shoes with slightly high heels. Meanwhile, boys typically wear a polo shirt, pants or slacks, black shoes and white socks. For Physical Education class, students usually have another uniform, typically screen-printed T-shirts and jogging pants or short pants of a specified color depending on year level. School children have very hectic schedules. To be ready for classes at 7a.m., children wake up as early as 5:30a.m, especially students living in the traffic-congested metropolitan Manila area who end up spending time in traffic jams even at that hour. Those who go to public schools tend to require shorter travel periods because there are usually public schools in every town, while those living in the cities may need to take such means of public transport as jeepneys and buses or be sent to school in a private car. Even pre-schoolers, if they happen to be enrolled in a morning session, can face this tiring schedule, despite their only needing to be in school for three to four hours a day. Students often lack the time to eat a proper breakfast at home and tend therefore to carry rice and eggs or processed meats as a snack, as mothers are concerned about their kids getting enough energy to last them the long school day. Other children buy their snacks at school, largely as a result of already needing to carry heavy backpacks. Private-school students tend to have a heavier bag load owing to the more substantial books that they use. In recent years, schools have addressed rising health concerns among many parents and have moved to prohibit the sale of chips and carbonated drinks in school cafeterias, although many students still have access to them via the sari-sari stores outside the school grounds. Initiatives by the Departmet of Education have also helped raise awareness of the need to eat healthy school meals. One such initiative in 2011 is at the Parañaque Central Elementary School in Manila, where teachers, students and parents have transformed the school yard into plots to grow various vegetables that are used for lunch for the (mostly poor) children of the school. In terms of lunch, students who live far away from their schools tend to stay back in school during lunch break. They either carry home lunches or buy from the school cafeteria. Some children from mid-income families opt to bring rice from home and buy the rest of the lunch from the cafeteria in hopes of saving some money. Public-school students end their day by around 4p.m., while private school dismissal time is usually at 5 or 5:30p.m.. Chinese schools, which are common across the country, are among those who release their students the latest, largely because of the Chinese subjects that are added to the daily routine. Foreign languages are not required, except for a few private schools that may require foreign language units. This dismissal schedule does not include any other extra-curricular activity that a child may have, such as sports, school band, or student council meetings. The activities continue to be a priority among most Filipino families, who greatly value a well-rounded education and extra skills that may help children succeed in their future careers. Although private schools are known for imparting a higher-quality education, the downside for parents is that, as Education Secretary Armin Luistro concedes, there is no limit to the tuition fees they can demand. As such, private schools continue to report tuition fee hikes year on year. Fees at private schools can range from Ps10,000 to Ps50,000, some even charging Ps100,000 and more. Private schools emphasise various special themes. For example, the Waldorf system emphasises a well-rounded education rather than mere academic excellence, and it focuses on healthy eating and little to no media exposure.. Parents are increasingly favouring such schools regardless of their higher fees. English continues to be the main language used in Philippine schools, with an additional subject on the Filipino language and another subject that is sometimes taught in Filipino. The majority of parents emphasise English in hopes of having their children excel globally when they

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finish school. Still, schools devote at least one week to the national language in an event known as Linggo Ng Wika, or Week of Language, which takes place in August every year. Typically school sessions commence in June. Throughout the school year, students enjoy official holidays. School also typically gets called off during major typhoons. Students get a oneweek semester break towards the last week of October and a two-week Christmas break. School then continues till end of March, with graduations typically held in the last week of March.

University Life
After high school, students in the Philippines typically move on to colleges and universities. Those from low-income households opt for two-year vocational or technical courses, while others proceed to a four-year university course. Those who complete third-level education can stpursue higher education in the form of a master‟s degree, a doctorate degree, and a postdoctorate degree. A master‟s degree or higher is typically perceived as a means for a good career. Entry into university requires students to pass both a national exam and an entrance exam for the particular university applied to. These exams are not the only hindrances, as many Filipinos are also unable to enter college due to financial constraints. For example, GMA News reports that according to the Commission on Higher Education, only half of the total 1.2 million highschool graduates are able to proceed to college. Filipino students enter college at the age of 16, and they finish college in four years, although some courses such as engineering, and more recently, accounting, can take five years. As universities are usually located in key cities, a big chunk of the student population lives in boarding houses and dormitories. College students frequent malls, cafes and cinemas in their spare time. Tuition fees vary among universities, with government universities offering the most affordable fees. State universities typically offer scholarships and aids for the underprivileged, while nearly all universities offer a student-assistantship programme for low-income students to augment their schooling by giving several hours a week of service. For example, at the University of the Philippines (UP), the Socialised Tuition and Financial Assitance Program sets student applicants into certain brackets based on parental income, and poorer students pay lower fees. In 2011, however, student unions increasingly rallied against the system because of changes that automatically placed all students in the bracket with a much higher price per unit, Ps1,500 instead of the previous year‟s Ps1,000. The issue remains unsettled as university officials defended the move as an attempt to strengthen the regulations surrounding the student assistance system. Schools like UP are increasingly open to other sources of donations for students who have financial difficulties. In fact, in 2011, according to GMA News reports, UP Vice President for Public Affairs Prospero De Vera stated that companies who donate money for scholarships should be allowed to offset their tax liabilities by up to 150%. Should this come to fruition, students will have a greater chance of finding scholarships to meet their needs.

Adult Learning
Meanwhile, adult learning in the Philippines is considered to be a non-formal type of education. It is usually offered by civic organisations and non-government units. Such learning is mostly geared towards practical life skills and functional literacy. For example, UNESCO reports that three local municipalities in Benguet and Baguio have implemented the Community-based Adult Learning and Development Program, which has 150 to 200 adult learners each year and receives an estimated annual budget of US$30,000.

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Some state universities also offer programmes like cooking and other home skills on a shortterm basis, which Filipinos turn to mostly for certification purposes. For example, since the mid2000s, the rising appeal of cruise-ship employment has prompted many adults aim to enhance their education through short courses that will improve their chances of getting job on a ship. Chart 2 Number of Students in Higher Education and Expenditure per Student in PPP Terms 2006-2011

Source:

Euromonitor International

Chart 3

Regional Ranking of Number of University Students 2011

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Source:

Euromonitor International

WORKING HABITS Working Conditions
The Philippine Labor Code (PCL) of 1976 outlines labour laws for the welfare of the workforce. It cover various areas, the key ones being working conditions, working hours, minimum working age, minimum wages, and discriminatory laws for working women and other minority sections of society. In the Philippines, the regular working day comprises eight working hours every day from Monday to Friday. Government offices and most private offices have the working hours from 8a.m. to 5p.m., although some private sector businesses run from 9am to 6pm, and may require work on Saturdays. However, establishments that require shifts, such as retail outlets in malls and restaurants, typically require a 48-hour week with changing schedules. For example, the SM chain of department stores is known to have opening, mid and closing shifts, each with eight hours per day but starting at different times of the day. This translates into one day off, instead of the two days off that government and bank employees enjoy. The increasing availability of jobs in business process outsourcing (BPO) firms has further disrupted the regular work schedules of employees in the Philippines. With the exception of workers in the medical profession, call centres have been the first to introduce the graveyard shift as a mainstay. They offer an additional percentage on top of the regular salary as compensation for the night shift. BPO jobs have also increasingly expanded to include online services like content writing and search engine optimisation, according to Yahoo News Philippines. When an employee works on a holiday, he is usually compensated with an additional 30% of his usual daily rate, which is also the same percentage mandated by law for overtime work past the required eight hours. Working holidays mandate double pay, and many companies therefore prefer to give their employees the holiday off. Since the mid-2000s, flexible working hours are more easily arranged, but mostly with the private sector. Single-parent families have benefitted greatly from this arrangement due to the

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Single Parents Act of the Philippines, which allows single Filipino parents the right to request flexible working hours as a compromise with their employer. The minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country are those prescribed by the Regional Tripartite Wages and Productivity Boards. (Article 99 PCL). Minimum wage is usually adhered to by government offices and most private companies. However, it is a common practice for large companies like SM to hire sales clerks and other lower-position employees on a contractual basis. According to the PCL, a probation period must not exceed six months. Post probation, employees need to be regularised and are entitled to health and leave benefits. Under the PCL, workers are entitled to holidays, particularly national holidays officially set by the government. These correspond to an average of 11 regular holidays in a year. During the term of previous president Gloria Macapagal Arroyo, it was common for holidays to be moved nearer the weekends so as to produce a long weekend for employees. However, under the current president Benigno Aquino Jr., this practice has not been as widespread, although holiday entitlement continues to be a work standard. In the formal sector (both government and private), employment contracts are the norm. These can be for indeterminate periods or for short-term periods depending on the nature of the assignment. Laws do not allow for unexplained terminations, legitimate reasons being required. Contracts in the informal sector are unheard of, and job security is very uncertain, as it is based largely on the will of the employer. The average lunch break lasts an hour, with a small percentage of employees getting an hour and a half. However, with the increasingly busier schedules of the corporate world, many employees have taken to working lunches and may simply eat take-out food or run for a quick lunch before getting back to work. Many workers, aiming to save money, may bring their own rice but buy their lunch from vendors who call to offices to sell to employees. Vending machines in the workplace tend to be limited to drinks, so employees generally have to go to the cafeteria or outside the office for snacks. In corporate offices, corporate attire is typically required, with Friday being dress-down day. For men, corporate wear comprises a long-sleeved shirt, slacks and a blazer or coat, with an optional tie. For women, it comprises a blouse, skirt or slacks and a blazer. Some uniformed staff get a clothing allowance on a yearly basis

Women in the Workplace
In 2011, women constituted 39% of the total employed population in the Philippines. There is minimal discrimination against women in the average Philippine workplace. In fact, many top positions are occupied by women, particularly in marketing, human resources and administration. Call-centre jobs are also increasingly attractive to women, even those with graveyard shifts. According to the PCL, in terms of salary, there is no distinction between female and male employees, with the rate being determined by job description instead of gender. This has resulted in a continued increase in working women in the country. Various antidiscrimination and minority-workers protection rules cover women too. One such example being that under article 136 of the PCL, an employer cannot stipulate that a woman cannot get married upon employment or during employment. According to article 135 of the PCL, it is unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex. Women are entitled to maternity leave of 12 weeks. However, arrangements after this period of leave typically go back to regular routines. Many companies offer more liberal terms, facilitating working women to extend their leave and even to work part time. Women in higher positions often have greater negotiating power with their employers and do work out a more favourable work-life balance. Interestingly, magazines like Working Mom and Smart Parenting,

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when dealing with issues of working mothers, are increasingly emphasising the importance of motherhood along with a career. Women in corporate offices typically wear three-piece outfits comprising an inner shirt, a skirt or slacks and a blazer. The faster lifestyles required by marketing positions usually result in working women who prefer the comfort and ease of slacks over skirts, particularly when they are frequently out of the office for client calls or other job requirements. In call centres, women usually wear business attire for the week except on Fridays, which is a dress-down day for most BPO firms. For working mothers, juggling career and family life continues to be a challenge. Many of them turn to magazines like Working Mom and Smart Parenting for solutions for quick meals. Those with household help, which is very easy to come by in the Philippines, prefer having meals cooked from scratch. In the absence of home help, the typical working mother resorts to buying frozen ready meals.

Commuting
With increasingly congested traffic in Manila and many other cities in the Philippines, it is becoming more and more stressful to drive cars to work. Driving to work is, however, limited to the upper-income group of consumers. The majority of Filipino workers still rely on public transport like trains and buses in Manila and jeepneys (taxi/minibus often made from secondhand Japanese trucks) in virtually every city across the country. A very small percentage of employees take a taxi to work due to the higher costs, but taxis are generally used during emergencies. The jeepney is the most indispensable form of transport in urban areas in the Philippines. In 2011, the average fare was Ps7.50 for regular passengers, with higher costs for greater distances. Many employees need to take two to three jeepney rides, but there is good connectivity. In more crowded places in Manila, passengers line up to get into a jeepney, which likely explains the increasing number of Filipino workers looking to buy a motorcycle for transportation needs. However, women are still wary about the idea of using a motorcycle, even if advertisements in 2011, such as by Honda Philippines Inc, seem to target Filipino working women. Interestingly, in addition to motorcycles, there has been a growing availability of the e-bike, or an electric rechargeable motorcycle that does not use any gasoline.

Alternative Work Options
There has been an increasing availability of alternative work options in the form of part-time jobs or even full-time jobs online. Jobs online can be in the form of article writing, search engine optimisation or data entry. These online jobs can be done by virtually anyone, and many Filipino workers work a second shift after coming home from their day job. Another part-time occupation that Filipinos engage in is multi-level marketing, which allows them to sell certain products or services on their own time or even leverage connections in their day job. Another portion of the population has sought to earn extra income from online businesses, including blogs and online outsourcing companies. Blogging is increasingly a popular source of extra income in the country, while also allowing the creator to express his or her personal interests. For example, the Manila Bulletin describes Filipino fashion bloggers as being on the rise, and companies are increasingly recognising the value of bloggers. In 2011, food bloggers in the country enjoyed a treat from Unilever Philippines‟ food tour in exchange for blogging about their experience, thereby giving an indication of the power that these writers have on influencing consumer purchases.

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Although the Bureau of Internal Revenue classifies these employees as self-employed individuals who must file their own taxes, very few online workers actually report their earnings. This results in greater disposable income.

Retirement
There were around 6.5 million Filipinos aged 60 and above in 2011 with 4% of the total population aged 65 years or older, with some of them receiving monthly pensions from the government. Although the retirement age is currently set at 60 years old, some individuals choose to work until they are 65 in order to render a greater number of years of service. This affects the pension allowances they receive after they retire. This percentage represents a slow but steady rise over the years as the general population of the country is leaning more towards the aged as the last of the baby boomer generation reaches senior-citizen status. The government has increasingly put emphasis on caring for the senior part of the population. The Philippines Daily Inquirer describes the Republic Act 9994 as being an expanded law on privileges for senior citizens, and it includes mandatory coverage by the Philippine Health Insurance Company for senior citizens. Most retirees, however, still plan for their own finances by saving. A key priority of retired middle-income consumers is health and medication. In contrast, richer retirees, due to their own savings or the support of their children, live more lavishly, taking vacations, pursuing hobbies and planning home improvements. Most retirees help with looking after their grandchildren while their parents work. This is a very common arrangement in the Philippines, which is a tightly-knit country. Most retired people live with one of their children. Working parents tend to trust their own parents as the best guardians for their own children. It is very uncommon for Filipino families to send their aged parents to retirement homes. Retirees‟ children make efforts to provide a caregiver for aged parents, communicate with them regularly and provide emotional and financial support. Chart 4 Employed and Unemployed Population and Labour Force Participation Rate 2006-2011

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Source:

Euromonitor International

Chart 5

Population Aged 15-64 Compared with Old-Age Dependency Ratio 20002020

Source:

Euromonitor International

Chart 6

Regional Ranking of Female Employment Rate 2011

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Source:

Euromonitor International

EATING HABITS Dining in
Per capita expenditure on food reached Ps25,560 in 2011 up by 3.5% over 2010. This reflected rising incomes, consumption of a wider range of foods, and the rising food prices of the past few years. Fresh home-cooked meals of traditional Filipino fare remain the staple food, as these are considered to be more healthy and affordable. Since the early 2000s, however, there have been some changes in food consumption, as Filipinos, especially urban dwellers with increasingly busy lives, are gradually moving to packaged ready meals (chilled, canned and frozen) for the convenience and time saving they offer. Contemporary Filipino cuisine is a rich blend of the foods of the many cultures that have influenced the country through its history, including Malay, India, Arab, Chinese, Spanish, Japanese and American. Local cuisine has evolved by adapting all these influences and customising them to suit local produce and preferred local flavours. Adobo is one of the most preferred national dishes, comprising pork or chicken stewed or braised in a special sauce. Other highly popular dishes include Bistek (Filipino beef steak), karekare (oxtail in peanut stew) and a variety of stewed and steamed fish. Rice is the main accompaniment for all foods. Given the tropical climate, most desserts are made with rice and coconut, including Biko (glutinous rice sweets) and halo-halo (shaved ice with syrup and coconut milk). Sorbets and juices are also popular. Reflective of diverse cultures across its many regions, Filipino cuisine varies widely from place to place. Typical northern cuisine comprises a diet heavy in boiled or steamed vegetables and freshwater fish, particularly those flavoured with bagoong - fermented fish that is often used instead of salt. Roasted meats and longganisa (sweet and spicy sausages) are other specialities, as are city specific favourites like Baguio‟s fresh produce and popular fruit desserts and Filipino rice cakes and puddings from Manila. Central Philippines in contrast has spicy specialities from its Bicol region and lechon (cooked meats) from the Cebu region. In the southern Mindanao region, which has a stronger Arabic influence, Malay spicy foods are very popular, including satay (meat on skewers) and sambal (spicy chili sauce). Most Filipinos are not vegetarian, with a strong preference for pork, beef, seafood and chicken. However, since the early 2000s, people are more conscious of eating healthier by cutting down on red meat, switching to brown rice from white rice, eating more fruits and vegetables and cutting down on alcohol, which is routinely consumed with meals. Apart from light mid-morning and mid-evening snacks, breakfast, lunch and dinner remain the main meals. Food shopping is done at neighbourhood markets with open vegetable stalls, street stalls and vendors on push carts. As such markets have a daily supply of fresh produce from farms and fresh catch from the seas, shopping in these markets is preferred to supermarkets. Moreover, food at these markets is more economically priced than at supermarkets. Usually, women or domestic helpers shop for food, stocking up with two-to-three days‟ worth of food at a time. However, given the busier lifestyles of urban consumers and the greater share of working women in urban cities, frequent shopping at neighbourhood fresh markets is being replaced with shopping once a week or fortnight in supermarkets. Supermarkets are better organised and offer greater convenience over open-air markets that can be hot, humid and dusty. Food shopping at supermarkets is often combined with shopping for other home products, helping save precious time. The shopping baskets of busy supermarket consumers often have a significant proportion of frozen and chilled meals. Fresh vegetables and fruits are often be

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picked up fortnightly, and a weekly top-up shopping from the neighbourhood sari sari stores is done for items that are consumer more regularly such as milk, eggs and bread. Celebratory meals are usually cooked at home. These are usually for religious festivals such as Christmas and Easter as well as for special occasions like anniversaries and birthdays. However, with busy lifestyles, a growing number of Filipino‟s are turning to either dining out for celebrations or buying convenient packaged foods, which are then made a little more elaborate by adding few home-made items. Given Filipino‟s love for home-cooked meals, most Filipino kitchens are well stocked with kitchen appliances. Middle-income and rich consumers can easily afford blenders, toasters, sandwich makers, and microwaves. With lower incomes, most rural homes only have basic appliances like blenders and toasters. .

Dining Out
Dining at home is still predominant among Filipinos. However, increasingly busy lifestyles that leaves little time to cook, more occasions to celebrate and rising incomes, have led to a rapid rise in the trend of eating out. Traditionally, dining out is a family experience to celebrate special occasions or something done mainly by professionals, but since the mid-2000s in urban centres, younger people are increasingly eating out with friends as a way of hanging out. Consumers spent Ps4,014 per capita on dining out in 2011, an overall decline in spending of 5.7% since 2008. Emerging dining-out trends are driven by several factors. One important factor is the growth of affordable travel with budget airlines within the Philippines and overseas (especially in SEA). With increased travel, people are now more aware of foods around the Philippines as well as abroad, and the demand for eating these foods in restaurants has increased since around 2005. Restaurants styled around new Western foods have become popular since 2007. These include cupcake delis, frozen yoghurt outlets and gourmet chocolate restaurants (the year 2011 saw the opening of premium brands such as Chocolate Fire Boutique Café, Shelenni Gatlabayan‟s Cacao and Sins Choc Shoppe). Another new trend in 2010-11 is the growing consumer demand for authentic flavours. Authentic cuisines that have become very popular include Taiwanese, Szechuan and Singaporean. Café Juanita and Milky Way in Manila are two recent restaurants that have established themselves around this novel trend. Health consciousness has prompted many more restaurants to add healthy food choices to their menus. Rising incomes and the growing affluent class have spurred special premium novelty restaurants, including Van Gogh is Bipolar and Marcia Adam‟s Tuscany-themed restaurant). Korean food was popular in 2011, with leading Korean franchises such as Red Mango, Bon Chon Chicken and Caffe Ti-Amo getting very popular in Manila. Although there is now a wider range of menu and cuisine types, prices have also risen in most restaurants. However, the vast majority of Filipinos are conscious of value for money, and large fast-food chains like McDonald‟s as well as local restaurants continually strive to launch new value choices on the menu. Although dining out was a traditionally a private experience enjoyed with family, these days, with the growing presence of social media in consumers‟ lives, dining out has a new dimension that involves sharing the experience through pictures and comment on social media sites such as Facebook and Twitter. With more food blogs, more people are willing to try new restaurants and feel less afraid of losing money trying out a new restaurant.

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Café Culture
Cafés continue to be mainly an urban phenomenon. Western-style cafés are nonetheless becoming more popular in smaller cities outside Manila. For example, in 2011 in Tagum City in the Southern Philippines region, the number of cafés is expanding rapidly, one such key chain being Yuyu Café and Dessert Shop. Since many smaller cafés are unable to be financially viable with just the limited menu of coffee and deli items, they are expanding their menus to include fast food. The main reason for the rapid growth in cafés is the shift in preferences of younger consumers who are influenced by Western trends, including those of dining and celebrating. Cafés are perceived as a place to hang out and be part of the upwardly mobile group which has higher incomes and global tastes. Many of these cafes have a posh Western look, and to differentiate themselves from the competition, some cafes are offering such unique features as book-reading corners, live music, and a wider menu choice. Led by the growing appeal for cafés, many small entrepreneurs have taken support from the Philippine Coffee Board and are setting up small coffee shops across the country. Coffee culture is therefore rapidly percolating down into smaller towns. It remains, however, limited to upperincome consumers. Middle- and lower-income consumers continue to drink at home or buy from cheaper places such as sari sari stores, convenience stores or small tea/coffee stalls.

Snacking Habits
Snacking remains a very popular Filipino habit. Reflective of this is the rise in per capita spending on sweet and savoury snacks (up from Ps355 in 2006 to Ps370 in 2011). Adults typically snack mid-morning and with evening tea and children carry a mid-morning snack to school. Sweet snacks are very popular, as are sandwiches, crispy noodles and baked goods like donuts and muffins. Chocolates continue to be a popular Filipino snack, but consumers also continue to prefer traditionally flavoured snacks such as glutinous rice cakes. While snacking continues to be an integral part of Filipino culture, in the past few years there has been a rising awareness of snacking healthily due to the risk associated with high-calorie snacks such as chips, sugary drinks and chocolates. Although several parents continue to give weekly allowances to children for snacks, many parents are increasingly switching to home cooked /steamed snacks and fruits for the school snack box. The government too has been supporting consumers greatly in this area by creating awareness of the adverse effects of consuming high-calorie sugary and fried snacks. For example, in August 2011, the Quezon City government launched the Healthy and Bibo Kids Feeding Program in schools that have registered the highest levels of malnutrition. The programme aims to distribute vitamin-fortified snacks to schoolchildren for four months. To create awareness among consumers and help them to avoid high-calorie snacks, the Food and Drug Administration (FDA) of the Philippines in 2011 decided to introduce Guideline Daily Amounts labeling on snacks. Labels are required to show the percentage of recommended daily amounts per serving and the absolute amount per serving, helping to educate both adults and children about calories, fat, sugar and salt. Although some consumer protection agencies opposed the move on the grounds that labeling rules were confusing, overall most consumers welcomed the move. Despite rising consumer demand for healthier packaged snacks, low fat, baked and reducedsugar snacks continue to be form a niche market, mainly because their higher prices make them unaffordable to the vast majority of consumers. Increasingly, Filipinos have started cutting the portion size of their snacks in a bid to restrict calorific intake.

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Attitudes Towards Food Trends
Food consumption patterns in the Philippines have changed in recent years. One key reason is that rising income levels have supported the consumption of a wider variety of foods. Another important factor is increasingly busy lifestyles that have driven Filipinos to consume packaged foods that offer convenience and help save time. Although incomes have been rising over the last decade, increasing food prices are tightening the squeeze on consumers already struggling to buy an adequate amount of food. In fact, regardless of income levels, the high rise in food prices, especially in the recent past, has put pressure on all income segments. Increasingly busy lifestyles, the growing proportion of women in the workforce and longer commutes are all reducing the time available to cook fresh meals at home from scratch. Thus, consumers are increasingly opting for processed packaged foods or even full meals purchased on the way to or back from work. A lack of time is forcing them to increasingly consume on the go, and the easy availability in most retail stores of a wide range of packaged foods, beverages, mini meals and snacks has made it convenient to buy while on the go. Consumers are becoming more discerning with regard to their choice of foods and beverages. With regard to coffee, which is a staple good and has high penetration, rising incomes are prompting consumers to purchase higher-quality, premium coffees. This trend is also being driven by the rising café culture. In contrast, for beer and spirits, also staple goods with high penetration, consumers have started shifting to more affordable local brands rather than expensive foreign labels. This is due to the increasing availability of a wider range of local spirits and beers. Another recent change in attitude towards food consumption is the growing awareness of the need to consume healthy foods. Filipinos are increasingly taking measures to eat more healthily. For example, they are increasing the share of fruits and vegetables in their daily diets, cutting down on red meat in favor of lean meats, reducing alcohol consumption and cutting down on high-calorie snacks and sugary beverages. Awareness of the benefits of organic foods is low among the masses. Although the range of organic foods is increasing, it remains a niche, restricted to affluent urban consumers. Awareness of genetically modified foods is even lower, with most consumers being unsure about the safety of such foods. Chart 7 Per Capita Expenditure on Consumer Foodservice by Chained and Independent 2011

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Source:

Euromonitor International

Chart 8

Regional Ranking of Average Supply of Food Calories per Day 2011

Source:

Euromonitor International

DRINKING HABITS Attitudes Towards Drinking
Alcohol is considered an essential beverage for social bonding. Whether it is for routine consumption after meals, to unwind after a stressful day at work or to enjoy at social

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celebrations; alcohol in the Philippines is an integral part of events, considered as a mark of relaxation, joy and bonding. Filipinos are regarded as heavy drinkers and many tend to start drinking alcohol on reaching their teens. According to a Department of Health report in 2009, 24% of 15-to-19-year-olds are regular drinkers. Both men and women enjoy alcohol, although type of drink preferred differs with gender. Women tend to prefer lighter alcohols such as light beers, wines and ready-to-drink premixes. In contrast, spirits and beer have a stronger patronage among men. Led by the increasing availability of new products (more flavours and „lite‟ variants), events such as Oktoberfest and summer parties, celebrity-endorsed advertising and trade promotions, alcohol consumption in 2011 continued to see stable growth. Consumer expenditure on indulgences such as alcoholic drinks and tobacco has seen sustained growth, as reflected the rising per capita consumption, which increased from Ps1,064 in 2010 to Ps1,077 in 2011. Per capita consumption of alcoholic drinks increased from 21.3 litres per capita in 2006 to 24.4 litres per capita in 2011. Due to the celebrity endorsement from such film actors and athletes as Anne Curtis, Manny Pacquiao and Sam Pinto, demand for domestic brands continued to grow in 2011, benefiting domestic companies such as San Miguel Brewery, Ginebra San Miguel and Tanduay Distillers. Other new methods of brand promotion in 2011 were the increasing presence of events such as food pairing parties in restaurants. These were organised by large companies such as Global Beer Exchange, Barcino Retail and Wine Warehouse, who used the events to promote wine and craft beer in the on-trade channel. According to a World Health Organisation (WHO) report published in 2011, Filipinos are the second highest consumers of alcohol in Southeast Asia, the top wine drinkers in the whole of Asia and have a high rate of alcohol abuse. Despite heavy taxation and restricted, and often one, that emphasizes socially responsible drinking/drinking in moderation, alcohol abuse is common among Filipinos. Abuse statistics are not well documented, but various reports suggest high rates of abuse, particularly among young Filipinos who are sometimes not careful enough about the adverse effects of unregulated drinking. According to „Youth Violence and Alcohol Fact Sheet (2006a)‟, published by the WHO in 2006, there is a culture of excessive drinking among the youth in the Philippines. Among the various types of alcoholic beverages, Filipinos prefer beer the most due principally to its affordability compared to hard drinks and its better availability in on-trade and off-trade channels. Many affluent consumers are rapidly upgrading to specialised beers such as craft beers and mainstream foreign brands. Spirits are the next most common form of alcoholic beverage preferred by Filipinos. Gin, brandy and rum are the main spirits preferred. Over the past few years, Filipinos have been increasingly shifting to local brands of various spirits because these are perceived to be of reasonable quality and are much cheaper than foreign brands. Consumers continue to benefit from a range of promotional pricing for spirits as companies try various ways to boost business. Although consumers did see some price hikes in 2011 due to the implementation of the Sin tax (an 8% hike in excise duty), most Filipinos continued to stick to their favourite brand, as companies offered price discounts to prevent consumers from moving to cheaper brands or cutting consumption due to higher prices. Although spirits were typically more popular with older men, companies have started targeting younger men in an effort to expand their consumer base and have a ready replacement when older consumers retire from drinking habit. Companies‟ use of young celebrities (film stars and athletes) to endorse spirit brands has found an appeal among young consumers, giving spirits a „macho‟ image rather than a staid one. Wine continues to be regarded as a more upmarket drink, still mainly preferred by consumers in big cities such as Manila. Wine culture is, however, also spreading to smaller cities such as Cebu. The growing consumer perception of the health benefits of red wine is a key factor driving wine consumption. In 2011, light, still red wine saw

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volume growth of 8%, mainly on account of its perceived health benefits. According to Bill Hardy of Hardy‟s wines, “Filipinos are shifting from beer to wine because of the message about how good red wine is for one's heart.”

Drinking Inside the Home
Many Filipinos find it relaxing to unwind over a bottle of beer after a stressful day at work. Most consumers prefer to moderate their drinking habits and avoid regular/daily consumption at home, but some consumers are do consume very day. Provincial farm labourers as well as urban day labourers, typically those who are engaged in hard labour, often end their day at home by relaxing over small amounts of alcohol. Typically, older men get together at home or at a restaurant, and spirits are usually the drink of choice here. Both men and women enjoy beer at home. However, young consumers tend to drink outside the home, away from the watchful eyes of their family. For home use, consumers often store large beer bottles purchased from sari sari stores or supermarkets. Alcohol is easily available in most retail stores, ranging from the humble neighbourhood sari sari store to convenience stores, supermarket and hypermarkets. Agerelated checks for purchases are often not strictly adhered to. Beer mainly comes in glass bottles but is increasingly available in 300-350 ml metal cans. Beer bottles still have high appeal among middle-income and provincial consumers, and they are easily found in sari sari stores. Urban consumers increasingly associate metal can packaging with modernity, however, and these are increasingly available in supermarket and hypermarket chains, particularly Rustan‟s and Robinsons. Large bottles of beer are popular among consumers for stocking at home, as these bottles have an adequate quantity for drinking in a group. Smaller sizes, in contrast, offer freshness, as they can be opened only once and cannot once open be stored for later use. Spirits in glass bottles come in a range of sizes. Many premium wines are imported, and the standard 750ml bottle is popular. Consumers are also open to drinking wine packed in boxes, as these are often lower priced. Since a range of quality is available for box wines, Filipinos do not associate these merely as low-grade cheap wines.

Drinking Outside the Home
Drinking outside the home remains a common and popular social trend for both men and women. Per capita consumption of alcoholic drinks outside the home increased from 5.2 litres in 2006 to 5.6 litres in 2011. There are a large number of bars and pubs at different price points, suiting a wide variety of lifestyles and pockets. Younger consumers seem to be increasingly partying in a pub or a bar, and many of these bars close as late as three in the morning. Manila is home to many bars, pubs and karaoke sites. Other big cities such as Cebu City and Davao also have areas where the nightlife is centred. Drinking establishments serve a range of hard and soft drinks. When having a party, Filipinos enjoy drinking round-robin style using a common glass and passing it around the group. This custom is known as tagayan, and one person usually volunteers to pour the drink. Filipinos rarely consume alcohol without food. The usual accompaniment is called pulutan, or bar chow, which is the equivalent of tapas and consists of mixed nuts. Grilled meats and seafood are becoming an increasingly popular accompaniment to drinks. Beer is the most common form of alcohol consumed in bars, and local brands such as San Miguel are dominant. Budweiser, Heineken and Corona can also be found in upscale bars, as these brands are more popular with affluent consumers. Rum and ginebra, which is the local form of gin, are commonly available forms of hard liquor. Indigenous forms of liquor that are

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popular are lambanog and tuba, both of which are derived from coconut sap. Low-income urban and rural consumers frequent small, simple pubs that typically sell cheap liquor brands. Chart 9 Per Capita Consumption of Alcoholic Drinks and Soft Drinks by Category 2011

Source:

Euromonitor International

Chart 10

Regional Ranking of Alcoholic Drinks Consumption: Off-trade vs On-trade 2011

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Source:

Euromonitor International

GROOMING HABITS Attitudes Towards Personal Care
Essential grooming products for Filipino consumers include oral-care products, bath and shower products and hair and skin products. Although the vast majority of consumers continue to use economy products, there has been an upward evolution in these less-expensive products due to rising incomes and growing aspirations to groom in the manner of richer consumers. Filipinos remained conscious about grooming even in the midst of budgetary constraints, but consumer expenditure for personal care products saw a dip during the economic slowdown of 2008. The per capita spend fell to Ps1,288 from Ps1,362 in 2007. In 2011, it has rebounded due to the improvement in the country‟s economic state. This is seen in the increasing acceptance of personal-care products that used to be viewed as too expensive and unnecessary, including deodorant sprays and mouth sprays, as well as the increased consumption of basic necessities like shampoo and toothpaste. Overall, in 2011, per capita spends on beauty and personal care goods increased by about 1% over 2010 to reach Ps1,250. With deodorants among the personal-care items that both men and women consider a necessary part of daily life, companies have started offering them a greater array of choices, ranging from roll-ons to sticks to sprays. Even the more expensive sprays have enjoyed a greater following in 2011. This is indicative of Filipinos‟ willingness to spend more in order to feel and look good. Other items that remain a must-have are in the oral-care category, including mouth fresheners. These are especially popular among younger consumers who spend a lot of time with one another and are conscious about breath freshness. Due to rising disposable

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incomes from sectors such as business process outsourcing, purchases of such personal-care products are growing. Increased levels of income among the majority of Filipino consumers also resulted in a shift in consumer preferences regarding the pack sizes of beauty- and personal-care items. For example, in 2011, consumers have become more conscious about value for money, and greater purchasing power has allowed them to buy large plastic bottles of shampoo, often refilling the bottle with plastic pouches. Although the mass of the population still patronises sachets sold in sari-sari stores, many mid- and upper-income households have moved up to plastic bottles. Consumers‟ attitudes towards hair care have also become more refined. Instead of simply using a 2-in-1 product or a shampoo and a conditioner, they have become more attracted to hair care solutions that promise a more professional effect, such as 3-in-1 solutions of home hair spa treatments. In addition to basic shampoo and conditioner, there are more products that promise a salon-like effect on the hair. Much of the demand may still be linked to brand equity, as the items that offer these benefits are mostly the more popular brands such as Sunsilk and L‟Oréal, which results in more Filipinos being willing to give them a try. Interestingly, this trend has not resulted in less spending at salons and beauty shops. Filipino women still enjoy regular visits to their favourite salon for rebonding (chemical hair treatment to straighten hair), cellophane treatments, and hair colouring. In fact, fashion blogs in the country identify the increased exposure of Korean soap operas as the main driver for more dramatic hairstyles among Filipinos, not only for women but also for men. In addition to a strong reliance on curling irons or straightening irons used in the home, Filipinos readily get their hair done in beauty salons, particularly for special occasions like weddings, christenings and birthday parties. Sun care continues to be of low concern among the middle- and lower-income groups in the country, although the trend for whitening skin-care products is increasingly moving towards the middle-class. Still, sun-care products are deemed to be too expensive for daily consumption, except for those who are among the upper-income households. They are usually perceived as must-haves only during the scorching summer months, particularly during vacations to beaches or mountain resorts. However, given that the average temperature in the Philippines has significantly increased, a fact confirmed by global warming websites like GlobalWarming-Articles.Org, consumers are becoming more aware of the need for sun protection. They are still, however, constrained by budget issues. Newspapers like the Philippine Daily Inquirer and the Philippine Star continue to publish articles warning against the dangers of the ultraviolet rays of the sun, but typically only the affluent can afford to dab on even a little sun-protection cream. Those consumers who can afford it have access to various new sun-care products, and sales of these products have increased. Companies have started offering smaller pack sizes of sun-protection products, and these have been popular among mass consumers because they are more affordable. Filipinos still remain relatively unconcerned about the ingredients in the personal-care products they use, and instead focus more on the promised results. For example, during the early 2000s, papaya soap achieved huge popularity because of its promise of whitening and smoothing the skin. Since around 2006, deodorants and skin lotions that promise whitening and smoothening effects continue to be patronised even though they command higher prices. Even middle- to low-income women who are obsessed with getting fairer skin often forego other items in their beauty- and personal-care list rather than go without their skin whitening products. Most Filipinos are brand loyal and ardently support brands that show promising results.

Attitudes Towards Beauty
Filipinos, especially women, still view fair skin as the epitome of beauty, although this increasingly applies to men too. Most Filipino celebrities have a mestizo look. This term

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describes a person who has foreign blood, usually Spanish or American, from one of his or her parents. In fact, a big percentage of celebrities in Philippine show business are quite quick to point to their foreign heritage, and Filipino TV viewers are quick to memorise which star has which lineage. This perception of beauty is apparent in the “love teams” that are popularised via soap operas and movies. For example, one of the most popular soap operas in 2011, My Binondo Girl, revolves around the story of a Filipino-Chinese family. Such programs have created an unconscious desire to look or dress like part-foreign celebrities, including trying to lighten dark skin to conform to the dominant perception of beauty. Even TV commercials of ordinary situations (such as housewives doing the laundry) are represented by fair-skinned women. This continued preference for fair skin is the driver for sales of skin-whitening products, and more consumers are also becoming knowledgeable about anti-aging products and face creams. For example, local magazines like Working Mom, Smart Parenting, and Good Housekeeping Philippines typically includes a full-page ad for anti-aging products and face creams. Cosmetic surgery still remains a niche trend, mainly among the rich, and it remains rather unaffordable for the average Filipino. Although it is considered the norm for show business, the average Filipino usually is hesitant about such procedures due to their possible adverse effects on health. Moreover, advanced invasive procedures are usually unaffordable to the masses. Still, this does not keep consumers from becoming drawn to non-invasive beauty treatments such as diamond peel skin treatments, regular facials, particularly given the increasing presence of beauty centres in shopping malls. Laser hair removal and body contouring treatments are also becoming increasingly popular in salons such as Skin Inc., according to online magazine Lifestyle Asia. Along with the rising consumer willingness to spend on non-invasive skin treatments, day spas and skin centres also become more frequented in 2011. In tourist destinations especially, day spas are frequently touted as the must-go places and a way to show off the consumer‟s modern global image.

Male Grooming
During recent years the typical Filipino male has become more open to the idea of using grooming products beyond those for washing and shaving. An article published in October 2011 in Lifestyle Asia considers the male segment as one of the categories with a very good future potential in the beauty industry. Fragrances and deodorants continue to be the main personalcare products that the average Filipino male considers as staples. Increasingly, men have started copying the hair styles of their favourite celebrities, especially those of Korean soap stars. This has resulted in many men shifting from having their haircuts done in traditional barber shops to getting their hair done in beauty salons. Compared to a decade ago, more men are opting for services like hair colouring and straightening. In 2011, many hair salons were offering discounts on such services, which Filipino males have eagerly embraced. Many Filipino men are highly influenced by celebrities when it comes to their choice of haircare products. Unilever‟s Clear has sold well recently due to its intense promotion of the product as the best way to deal with dandruff, indicative of the Filipino consumers‟ priority of looking good at all costs. The product‟s endorsement by celebrity heartthrobs Dingdong Dantes and Piolo Pascual is a likely contributor influencing customer choices. Balding hair among Filipino men is considered a social stigma, resulting in their willingness to try hair restoration products. However, the middle- to lower-income groups cannot always afford these more expensive products, so they usually just resort to wearing a cap. According to the blog Journal.com.ph, although body hair and beards are usually regarded as a masculine thing, over the past four to five years, men seem to have shunned the idea of

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having too much hair, instead preferring to trim excessive body hair for a cleaner look. This is also because in recent times most Filipino male celebrities are sporting a clean, boyish look instead of stubble-clad macho image. Despite the rising interest of Filipino men in grooming products, luxury items continue to be limited to the more affluent and beauty-conscious members of the population, including those involved in show business and members of the upper echelons of society. However, with increasing overall demand for men‟s grooming products, the industry is getting more competitive and many companies are offering a wider range of lower-priced products targeted at the masses.

Use of Hair Care Salons, Spas, Nail and Beauty Parlours
Filipinos continue to frequent hair care salons, spas, and nail and beauty salons. A reflection of their strong appeal can be seen in an article on the EntrePinoys website that states that as early as 2006, every mall in the country had at least two to eight hair care salons and beauty parlours, with SM Megamall boasting a whopping eight salons. These salons have continued to compete in terms of price and service, resulting in consumers being able to continue visiting them regularly. Lower-income consumers typically have their hair and nails done at home, but for middle- to upper-income women, regular trips to these places are seen as a time to relax and be pampered. In 2011, the most common treatments that women had in beauty parlours were pedicures and foot spas. The increased availability of gift certificates offered in these places may have contributed to more consumers being able to have treatments. Even with some consumers opting to have treatments done at home, the luxury of actually going to the salon continues to be appreciated. Interestingly, consumer preferences for salons and beauty parlours have extended towards two extremes: on the one side are budget-friendly salons that attract customers with cheaper prices and value packages, while on the other are those that emphasise advanced treatments. Over the past six to eight years, mass consumers have been getting to enjoy many treatments like foot spas and hair spas with additional free products too. Haircut prices have also been increasingly competitive, allowing the average consumer more choices of salon haircuts at prices closely matched to those of a traditional barber shop. Prices for treatments have also become more reasonable since 2008, as salons face up to the threat of consumers deciding to use more in-home treatments to save money. More affluent consumers prefer the more exclusive salons. The rise in the number of branches of salons like Posh Nails even in smaller cities is an indicator of the good acceptance of these types of places, with the simple pedicure being the most common treat that Filipino ladies enjoy. Chart 11 Value Sales of Beauty and Personal Care Key Categories 2006-2011

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Source:

Euromonitor International

Chart 12

Regional Ranking of Per Capita Sales of Men's Grooming Products 2011

Source:

Euromonitor International

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FASHION HABITS Attitudes Towards Clothing
The typical clothing style of Filipinos may be described as toned down because the tropical climate calls for relatively casual clothes made from light fabrics. Filipinos continue to be patrons of anything Western (specifically American), and this is apparent in their fashion choices. However, in 2011, the popularity of Asian soap operas, particularly Korean ones, has contributed to a slight shift in consumer preferences, mainly in terms of accessorising. Regardless of the hot tropical climate, Filipinos tend to copy the corporate look of Western countries. For example, in the corporate world, both men and women are known for donning three-piece outfits with a coat or a blazer. This is enabled by high levels of air conditioning in offices. Filipinos are incredibly conscious about being properly dressed for certain occasions, and local magazines are full of power-dressing articles geared towards young professionals. For formal events like weddings, Filipino males traditionally wear the Barong Tagalog, which is the national costume and when translated simply means Tagalog clothing. It is made of a lightweight and relatively see-through material and is worn over an undershirt. Women will normally wear cocktail dresses because the national costume, known as baro‟t saya, translated to mean blouse and skirt, is only used during cultural events. Not all consumers buy new outfits to attend formal events like weddings, and the trend for renting formal wear has increased over the past decade, and shops renting formal clothes have grown in number in most cities. An interesting consumer trend in clothing since the economic slowdown of 2008 is the increasing acceptance of second-hand clothing in order to help save money. Buying a new midrange three-piece suit could cost as much as Ps5,000-Ps10,000, whereas renting the same could cost as little as Ps1,500, and buying second hand is even cheaper. Per capita spending on clothes in real terms was Ps1,452 in 2011 up from Ps1,401 in 2010 and correspondingly spending on footwear was Ps240 in 2011 up from PS226 in 2010. Growth in spending on clothing has remained static at less than 1% since 2008. Indeed, thrift shops continue to be an increasingly popular venue for consumers to look for branded clothing at a fraction of the cost. However, this is more common among the middle- to lower-income consumers, who do not mind the idea of buying used goods. In fact, the rise of fashion blogs boasting of thrift shop finds, such as Behind Bjorn Manila and Soule Phenomenon, is an indication of the growing allure of these cheaper clothing sources. An increasingly popular alternative among middle-income consumers is online shops that sell brand-new imported clothing and personal accessories at a much cheaper price. Such fashion blogs as the Manila Fashion Observer and Manila Shopaholic share findings and offer recommendations with regard to places to get fashion items at a more affordable price, and consumers are eager to try these sources.

Attitudes Towards Footwear
Filipinos remain highly conscious of footwear as an integral component of overall appearance. This is evident in the many fashion magazines that emphasise the importance of shoes in putting together a stylish outfit. Shoes are viewed not only as necessary protection for the feet but also as an expression of an individual personality. In fact, in 2011, fashion blogs created by Filipinos, including Soule Phenomenon, have increasingly placed an emphasis on footwear in the photographs they include in their posts. Footwear preferences have leaned towards the importance of functional benefits. For example, the Sanuk line of footwear has quickly become a favourite due to its aim of being as comfortable as slippers but as protective as shoes. Users appreciate the comfort and the

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natural feel of the product line. Sandals, wedges and other more dramatic types of footwear have increasingly gained a following, mostly as the average Filipino lady is becoming more adventurous in 2011. Given the relatively warm climate in the Philippines, sandals and other types of open footwear are common, particularly for casual wear. Closed shoes are only common for formal office wear or for special occasions. The Converse style of sneaker remains a popular choice, and there have been many other cheaper brands that came out with a similar design, and customers are quick to turn to them for the value for money they offer. Although men used to hardly ever regard footwear as a style statement, this mind-set is rapidly changing. Since the late 2000s, men‟s footwear has experienced a shift from traditionallooking loafers to include the type of pointed-toe shoes that have been popularised by celebrities. Filipino men have responded to new brands and models, such as Crocs and the Sanuk type of casual footwear. Many blogs run by Filipinos, such as the Manila Shopper, have provided tips on footwear sales, and the increasing reliance of Filipinos on the Internet has allowed them to make much savings in their quest for quality and stylish footwear.

Attitudes Towards Personal Adornment
Most Filipinos, especially women, enjoy using accessories for self-adornment. Usually, only the most affluent and usually older age group buy jewellery of precious metals and gems, including diamonds, which is considered „real‟ jewellery. The majority relies on costume jewellery for accessorising, with the exception being sterling silver. Thanks to the accessibility of kiosks selling sterling silver pieces, such as Unisilver, this type of jewellery has become popular costume jewellery. Costume jewellery is hardly seen as a status symbol, given how easily accessible it is. Instead, the average Filipino tends to collect accessories for personal adornment, and wear them even on a regular day. Ear piercing is common among Filipino women and some men, although piercing on other body parts continues to be relatively rare. Filipino baby girls tend to have their ears pierced while still in the hospital, a practice that has been accepted for the last few decades. As for body piercing and tattoos, Pinoy Tattoos.Com reported in 2008 a pending house bill requiring individuals who wish to have body parts tattooed or pierced to gain a permit from the Department of Health. While further developments on this bill are pending, the Philippine Star reports in June 2011 that tattoo artists in Cebu have expressed their support for a local ordinance that requires barber shops and salons to use sterilised needles and equipment when it comes to making tattoos or piercing. Being largely a Catholic country, tattoos used to be viewed as something that symbolises rebellion, but over the past decade, more Filipinos have had tattoos done, including those in the professional field, where people tend to have a more conservative attitude for adornment, often seeing tattoos as frivolous and unprofessional. According to a leading tattoo artist in the country, Lee Albon, the clientele for tattoos are largely tourists, “balikbayans” (or homecoming Filipinos from foreign countries) as well as upper-income locals. The increasing availability of business-process outsourcing jobs has contributed to this eagerness, as the young professional in BPO jobs consider it modern. According to PinoyTattoos.Com floral designs were among the most popular, although there is an increasing preference for Philippine-themed designs, such as creative renditions of the Philippines flag. Beach tourist destinations like Boracay are well-known for henna tattoos. Tattoo art is increasingly available in malls, making it more accessible to the average Filipino consumer, and also erasing the negative connotations surrounding tattoos.

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Attitudes Towards Accessories/luxury Goods
Luxury goods continue to be purchased only by the more affluent members of society. Middleand lower-income groups, however, aspire to owning them too. Filipinos are very conscious about the social status associated with luxury goods. In fact, the Philippine Star reports that the economic downturn has done little to curb consumer spending on luxury goods. A MasterCard study estimates that Philippine spending on luxury goods will continue to increase, to reach US$6.1 billion by 2015. This is a progressive increase over the years, especially as disposable incomes have increased after the economic slowdown of 2008. A survey by the same company entitled Consumer Purchasing Priorities – Luxury Shopping also showed that 23% of respondents bought luxury goods. Reflective of the rapid rise in consumer demand for luxury goods is the increasing presence of a large number of luxury brands such as Hermes, Rolex, Fendi and Louis Vuitton in upscale malls such as Green Belt 4 –Manila as well as exclusive outlets in five-star hotels such as The Shangri-La. Lower-income consumers have increasingly become more creative in getting such luxury goods by frequenting thrift shops or ukay-ukay markets, where they can sometimes come across branded goods that they can buy at a fraction of the price. This indicates continued consumer preference for branded goods, particularly in terms of clothing and handbags. Of course, when they have money, (for example, during annual salary bonuses), they check for any affordable goods in luxury boutiques such as Rustan‟s Department Store, an upscale chain of stores that serves as the exclusive distributor of up to 72 lifestyle brands. The Philippine Star also reports that the Rustan‟s Group of Companies expanded out of Manila by 2011, a development indicative of the widespread acceptance of luxury goods in the country. According to fashion blogs like the Manila Fashion Observer, the trend in personal accessories in 2011 continues to be imitating European and American styles, albeit taking functionality into consideration. These designs are largely manufactured by high-end companies, and cheaper versions may only be had at a much later date as fads take off and are imitated by lower-end companies. Functionality-wise, though, there are certain preferences emerging for personal accessories: for example, in terms of handbags, the average Filipino woman is turning more towards larger tote bags and shoulder bags, but they still prefer a much smaller clutch bag to take to lunch, dinner, or other meetings. Chart 13 Consumer Expenditure on Clothing and Footwear 2006-2011

Source:

Euromonitor International

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Chart 14

Regional Ranking of Consumer Expenditure on Clothing and Footwear as a Proportion of Total Consumer Expenditure 2011

Source:

Euromonitor International

HEALTH AND WELLNESS HABITS Public Versus Private Healthcare
Healthcare is available through a mix of public and private services. In 2011, expenditure on health comprised 3.1% of GDP, with public health services constituting a 34% share of total expenditure. Led by demand for better quality health services and supported by rising incomes, health expenditure per capita was US$72.4 in 2011 a 4.3% increase over 2010. Health practices in the Philippines include modern Western medicine as well as traditional herbal medicine. Western medicine is more readily accepted by households in cities and more developed rural areas, whereas the less developed areas still embrace traditional medicine, which relies on herbal medication. Even those who live in the cities sometimes still combine modern medicine with traditional medicine, given the proven success of some herbal ingredients (Lagundi leaves for coughs and colds, for example). In 2011, some herbal medicines were endorsed by the Department of Health. Due to the strict implementation of senior-citizen discounts of 20%, Filipino families have benefitted in terms of medication expense. The government-run Philippine Health Insurance Corporation, or PhilHealth, offers what are considered good health care benefits for a minimal monthly contribution of Ps100. This is especially helpful for hospitalisation and laboratory expenses, with PhilHealth giving discounts and reimbursements and assisting Filipinos across all income levels. The level of reimbursement depends on the condition as well as the particular medical procedures required. Employees can also benefit from membership of the Social Security System, and the Government Service Insurance System (GSIS) allows government workers to receive sick-leave benefits for times when they are absent from work for medical reasons.

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However, despite the increasing availability of cheaper prescription medicines, use of overthe-counter (OTC) and home remedies is quite common among Filipinos. A common traditional practice that many families use alongside consulting the doctor is the healing hilot massage which is commonly used to relax stressed muscles by a manghihilot (hilot practitioners). These are considered to be a cheaper alternative to medical doctors in the Philippines. The appeal of traditional medications is deeply rooted in Filipino culture, and it is also greatly influenced by the high cost of Western medical care. For example, an average doctor‟s visit can set a person back by Ps250 to Ps300 for consultation, not including the prescription for medication. Although there are some free services in local health centres, they are still very limited when compared to demand. In fact, these health centres typically only open once or twice a week. Some low-income parents typically only turn to them for the more expensive medical needs, such as a baby‟s mandatory immunisation. For minor ailments, consumers often just turn to traditional home treatments or those offered by a herbalist (albulario), and if this still does not work, resort to using OTC medicines.

Attitudes To Health and Well-being
Middle- and upper-income consumers are becoming more aware of the benefits of health and fitness, taking care to exercise and have a healthy diet. The average Filipino is typically conscious of good health, but it is viewed as important only as far as it is needed for working and earning money. Due to the growing awareness of the benefits of wellness foods, including organic and fortified foods, some upper-income and rich consumers have started buying them, but they remain expensive and are beyond the reach of the average Filipino. As of 2011, many packaged food items in the Philippines bear the Bureau of Food and Drug “Fortified” seal. Interestingly, these items include food products like chips and crisps. Still, there is an increased awareness of obesity issues and health problems related to weight issues, and mainstream newspapers like the Philippine Daily Inquirer have become bolder in addressing the problem and seeking to contribute to the overall consciousness of health and wellness.

Over-the-counter Versus Prescription-only Medicines (otc Vs Pom)
OTC, home remedies and herbal remedies continue to be very popular among Filipino consumers due to the long history and proven success of some herbal /OTC products (Lagundi leaves, for example) and the fact that they are much cheaper than prescription medicines. Further, for common ailments such as coughs and colds and digestive ailments, the increasing availability of OTC products from trusted pharmaceutical companies has led consumers to opt for OTC medicines rather than more expensive prescription counterparts. According to some newspaper reports, an estimated 40% of Filipinos have never seen a Western-type doctor, opting instead for herbal home remedies. Per capita spending on herbal remedies has rebounded to Ps53.6 after falling to Ps52.9 in 2008. People who buy herbal remedies do not necessarily forego all Western medicines. Up to 2011, some of the most common home medication includes OTC analgesics, cough and cold remedies and digestive remedies. Acetaminophen or Paracetamol is among the most popular analgesics and antipyretics primarily because the hot humid tropical weather lends itself to the spread of a variety of bacterial and viral infections throughout the year. Over the past few years, there has been increased approval by the Department of Health of commonly used herbal remedies. For example, the OTC cough and cold remedy Ascof, which boasts of being made of pure Lagundi leaf, a plant known for being effective at curing coughs and colds, is among the list of medicinal plants that have been approved by the Department of Health, according to the blog National Health News. An article published in 2011 by ABS-CBN

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News lists Lagundi as one of the herbs endorsed by the Department of Health and describes it as a top choice of home remedy for coughs and colds. Such is the appeal of Lagundi, that even with no proven benefits, mothers prefer it to the synthetic components in most other cough-cold brands. Similarly, Alagaw, another commonly used home herb, is expected to see similar success as Lagundi. Vitamins and dietary supplements are not really considered part of the regular shopping basket and are common mostly among the older population or very young children from middleto upper-income households. Since around 2007, however, there has been a rise in the use of vitamins due to widespread availability and marketing of such products. This is reflected in the recovery of per capita spends on vitamins and dietary supplements which had dipped from Ps180 in 2007 to Ps168 in 2008 due to the recession but recovered to Ps169 in 2011. However, as they remain more expensive than options available from pharmacies, they are still limited to the more affluent consumers. Sometimes, Filipino families self-medicate with complex drugs such as antibiotics, as they can (illegally) buy these drugs at most pharmacies without a prescription. Prescription-only medicines tend to be more expensive, but the availability of generic drugs as a result of government initiatives to offer low-cost medicines has allowed consumers to spend less even for prescription drugs, at least for common ailments like cough or cold related infections. However, for more complex infections, consumers prefer to go to the doctor for a consultation and usually buy prescription medicines. The trend for self-care/self-medication that caught on since the recession 2008 has continued into 2011. Although the economy has improved since then, families have already become used to the idea of not consulting a doctor except for serious ailments, so minor discomforts like coughs and colds continue to be treated at home. After all, instead of spending Ps250 on a doctor‟s consultation, consumers can instead purchase direct from pharmacies. In fact, it is not uncommon for pharmacists to make recommendations themselves when the customer describes the symptoms of their ailment. With increasing access to the Internet in 2011 and the easy access to a wide base of medical articles online, consumers‟ knowledge of scientific issues like common illnesses and treatments has increased, giving the average person more confidence to self-medicate using OTC and herbal remedies without consulting a doctor or pharmacist.

Sport and Fitness
The Philippines has always been a sport-loving country, with a basketball court found in nearly every neighbourhood. In fact, even far-flung neighbourhoods that do not have access to a real basketball court will always have makeshift basketball hoops for the enjoyment of residents. Residential subdivisions almost always come with a basketball court. In fact, blue-collar workers like pedicab drivers and delivery workers are also often commonly found spending their break times playing basketball on a makeshift court. Neighbourhoods also commonly have leagues and friendly championships, even among the lower-income groups, with the team members sometimes going to family and friends for sponsorship of their jerseys and uniforms. Some neighbourhoods even have local government units, led by the Sangguniang Kabataan or Youth Council, sponsor the uniforms of the players. These games typically do not involve any cash prize, although the winners get a trophy. These events continue to be very popular. Students in the Philippines are encouraged to be active in sports, with the Department of Education committing a large percentage of their annual budget for the Palarong Pambansa, or National Games. Even the most academic-focused private school always have some form of sport, encouraging students to excel in inter-school competitions. In fact, offering scholarships to

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students who excel in a particular sport is a common practice, especially among schools that have reached or are aiming to reach regional or national championship status. The early introduction of sports to the average Filipino child, usually by pre-school age, is one of the main reasons why sport is considered to be a major part of life. Physical education (P.E.) continues to be a mainstay through grade school, high school and college. For pre-school and grade school, P.E. may come in the form of regular P.E., whereas high-school and college students can sometimes enjoy a focus on a particular sport. For young adults, sporting events are more for recreation and include basketball, volleyball, and badminton. Basketball continues to be the most played sport with the most spectators. Soccer has received much more attention recently due to the skyrocketing popularity of the national team, which is referred to as the Azkals. Although many state universities include football in their sporting events, most Filipinos have been brought up with basketball, only in recent years taking interest in football. The growing focus on football has somewhat diminished the status of basketball stars in the Philippine Basketball League, as more people have followed the success of players in the Azkals. Another sport that has received much attention in recent years is boxing, with Filipino boxing champion Manny Pacquiao having won numerous fights in a short span of time. Instead of just watching boxing in the comfort of the home, Filipinos are now willing to pay a premium to get front-row seats at a live streaming of Pacquiao‟s fights in one of the many restaurants and establishments now offering this service. Pacquiao‟s fame has since extended beyond sport, and he endorses various consumer goods. Filipinos are fond of imitating their favourite celebrities. Serious fitness is largely for those who have gym memberships. The Wii Fitness trend of recent years is considered more as a gaming option rather than a fitness option. Centres that offer outdoor aerobics are increasingly popular in shopping malls, offering fun exercise at little cost. New fitness practises such as yoga are gaining rapid popularity. More consumers are signing up for specialised yoga centres, one such prominent one being the Bikram Yoga centre, which has expanded rapidly in 2011. The trend is not just restricted to metropolitan Manila but is also spreading to far-flung suburbs and moving to other large cities such as Cebu. A growing number of Filipino men are taking part in dance-based gym classes, as they have started to see the value of stretching and toning, and some gyms in Manila now offer such exercise routines. For example, Plana Forma Studio, a gym in Manila, offers intense workout sessions that combine yoga, dance and pilates. Endorsement of fitness by the national football team manager has also added to the growing popularity of such programmes.

Obesity
Incidence of obesity and overweight population is a serious concern in Philippines. In 2011, 7% of the Philippines population aged 15 years and above is estimated to be obese and 25% is overweight. Obesity amongst the population grew by 15.1% over the period 2006 to 2011. According to the Manila Bulletin, obesity for Filipino adults aged 20 and older is steadily on the rise as demonstrated by a study carried out by the Department of Science and Technology (DOST). Given these findings, DOST is concerned that these obesity rates are highly linked to degenerative diseases among the general population. As a response to this threat, schools have become more active in monitoring the food items served in their cafeterias. Newspapers like the Philippine Star and The Philippine Daily Inquirer have also published articles to increase awareness of the problem. As a result of the improved awareness, mothers especially have become more conscious about what their children eat. Many parents strictly prohibit sweets, high-fat junk food and carbonates for their children.

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For adults, a popular way of combating obesity is dieting and exercising, although those who have trouble losing weight through these ways turn to fat-burning drugs. A rising phenomenon includes the Nutrition Club concept popularised by multi-level marketing company Herbalife: consumers can leverage the power of social accountability and lose weight by substituting a meal each day with Herbalife while enjoying the company of friends. This is more prevalent in quieter areas, as traffic-congested cities do not give employees enough time to slip out for lunch break or for a fixed dinner time. Chart 15 Growth in Public and OTC Expenditure on Pharmaceuticals Compared with Healthy Life Expectancy at Birth 2006-2011

Source:

Euromonitor International

Chart 16

Regional Ranking of Obese and Overweight Population 2011

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Source:

Euromonitor International

SMOKING HABITS Smoking Prevalence
Despite the Philippines being a signatory to the World Health Organisation‟s Framework Convention on Tobacco Control and comprehensive efforts by the Department of Health to reduce smoking, smoking prevalence among the total population remained high at 28% in 2011, hovering in this range since 2006. Prevalence is much higher among men compared to women: In 2011, prevalence is 47% in men versus 9% in women. The total number of adult smokers approached 16 million in 2010 – around 13 million male and 3 million female. The minimum smoking age is 18, but many start much younger. According to a survey by the Department of Health, smoking prevalence among youth increased between 2003 and 2010. According to this survey, 46% of students had smoked cigarettes at least once (58% of boys and 35% of girls). Some 56% of youth had bought cigarettes at a store, and, surprisingly, almost 18.6% smoked at home. In the Philippines, women smokers are not as frowned upon as in some other Asian countries, and this boosts the overall amount of smokers. The attractive pricing and the sale of individual cigarettes continue to keep consumers smoking.

Attitudes To Smoking
Due to the high prevalence of smoking, government and civic organisations relentlessly continue efforts to reduce smoking. . The Department of Health‟s anti-smoking campaign – Yosi Kadiri – started in the early 1990s and has raised awareness of the negative health impact of smoking. Many stringent laws are in place. For example, by 2008, tobacco advertising was banned in all forms of mass media, with an exception allowed for in-store and point-of-sale

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promotions within retail establishments. A smoking ban was announced in all public places, and verbal health warnings were featured on cigarette packs. Although there is a smoking ban in all public places, this is weakly enforced. A study conducted in 2010 by the Department of Health in Manila, and the Johns Hopkins Bloomberg School of Public Health with support from Bloomberg, shows that detectable levels of SHS (passive smoking) were found in schools, hospitals, government offices, restaurants, and entertainment venues. High levels of air nicotine were detected in restaurants in non-smoking sections which is a strong indication that designated smoking sections are not effective. Air nicotine was also found in most locations monitored in government offices and in most hospitals monitored. In view of rising support among consumers to reduce smoking in public places and given the fact that laws are weakly implemented, the government is expected to step up efforts in this area. Chart 17 Smoking Prevalence amongst Men and Women 2006-2011

Source:

Euromonitor International

Chart 18

Regional Ranking of Smoking Prevalence 2011

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Source:

Euromonitor International

SHOPPING HABITS Main Household Food and Non-food Consumables Shop
Filipinos have a wide range of options to choose from when shopping for food. For fresh produce, the options range from neighbourhood street markets, open markets where vendors on push-carts sell fresh fruits and vegetables, sari sari stores (small kiosk-like neighbourhood stores), supermarkets and hypermarkets. Milk is usually purchased from supermarkets and hypermarkets, but in some small provincial towns and villages, local dairies also supply packaged milk to homes. Breads are usually bought from supermarkets and hypermarkets, but neighbourhood bakeries such as Red Ribbon and Goldilocks are also commonly used for buying loaf breads and pandesal (dinner rolls). Meats preferably bought fresh from local butcher shops, but due to the growing concerns for hygiene, consumes are instead shifting to supermarkets for their meat purchases because these offer a clean and sanitised environment. Many butcher shops have poor levels of cleanliness. Shopping for fresh produce, milk and breads is typically done in the morning, usually two to three times a week. Given the hectic pace of life, especially in urban areas, many consumers are now being forced to cut down the frequency of such shopping, instead preferring to do it every other week and at a supermarket. Supermarkets offer a clean, air-conditioned and wellorganised environment that can be very welcome after a tiring and stressful day at work. Small home sizes (and refrigerator sizes) also prevent people from shopping for much larger time periods. However, for dry groceries, increasingly consumers stock up for three to four weeks so that they end up shopping no more than once or twice a month. Any emergency top-up shopping of dry groceries is done from the sari sari stores or a quick visit to the local supermarket. Sari sari stores are an excellent source for shopping for dry grocery goods at competitive prices, and they are easy to access. Due to their small size, however, they are unable to carry the entire range of goods or all variants, flavours and pack sizes. Supermarkets and hypermarkets are therefore preferred by many consumers for the monthly grocery shop.

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Increasingly, supermarkets offer discounts and price promotions and aggressively compete on price with sari sari stores, thus narrowing the competitive advantage of the sari sari stores. In 2011, supermarkets are estimated to have a 48% share of total value of sales of packaged food products. Popular chains of supermarkets and hypermarkets such as SM and Robinsons have grown hugely in popularity over the past several years. Despite the efforts of some shopping websites such as Sulit.com, online food shopping remains a niche activity, as consumers still prefer the sensory shopping environment in neighbourhood stores and supermarkets and hypermarkets. Concern over payment security is also a deterrent for online shopping, not just for foods but for all other items as well. However, with increasingly stressful and hectic lifestyles, more and more internet use in homes, rising advertising by online websites and growing payment-safety features, online shopping for food (at least for dry groceries) is expected to grow in popularity due to convenience and potential lower prices than sari sari stores and supermarkets/hypermarkets.

Top-up Food Shopping
For emergency top-up shopping, Filipinos have easy access to the large number of sari sari stores dotting neighbourhoods across the country, be it in urban or provincial areas. Although these stores stock all the common dry groceries, they do not have a wide range of fresh produce, and consumers can therefore only use them to buy basic fruits like bananas and apples or a few types of vegetables. Milk, eggs and bread are easily available at sari sari stores. Increasingly, convenience stores located at gas stations are boosting their range of merchandise, adding such items as fresh fruit. However, consumers do not use these as commonly as sari sari stores mainly because sari sari stores have a much higher retailing density and often a few of them can be found on the same street. As consumers often prefer supermarkets and convenience stores for their more convenient and comfortable shopping experience, sari sari stores have upgraded themselves to better compete. Many have renovated their interiors, investing in better shelving and displays, putting up clearer signs and ensuring better cleanliness. They also frequently offer free home-delivery, discounted prices and other promotions to improve the shopping experience. They are no longer just banking on their advantage of being located near consumers‟ homes.

Shopping for Big-ticket Items
Unlike shopping for clothes, personal goods and foods, Filipinos look at shopping for home appliances as an investment and therefore spend considerable time and energy on research before buying. In most urban affluent homes, consumers typically start with an online search to evaluate various brands. Online portals of key appliance companies such as LG, and Samsung as well as those from leading department stores like SM appliances and Abenson‟s offer good information, and consumers get a wealth of comparative information on several brands and companies. Increasingly, social media is becoming an important source to check user feedback and consumer reviews, and most Filipinos rely on this information, as they consider it less biased than that of store salesmen who may often have a vested interest in selling goods. After online checks, consumers then visit outlets to do a physical check on appliances. They are keen to touch and feel appliances and to evaluate if they are suitable for the home. Multibrand outlets such as Abensons and SM appliances are then visited. These outlets allow consumers to easily compare a wide variety of brands under one roof. Apart from technical features, the size of the appliance and its suitability for their homes, price and value for money are very important for Filipinos. They therefore compare prices in specialist appliance stores, in

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department store and in hypermarkets before making a final decision. In 2011, specialist electrical goods retailers remained the most popular store type for final purchases. Since the mid-2000s, there have been an increasing variety of banks, non-banking companies and department stores that offer easy financing options for big-ticket home appliances and gadgets. Loans with easy instalment options are easily available for most credit-worthy middleand upper-income consumers. Based on online reviews of various finance companies, banks and department stores, it appears that competition in appliances financing has been very aggressive recently, and many companies offer special services, including low interest rates, visits to consumers‟ homes to complete loan documentation and special gifts on signing up for loans. Large companies such as LG and Samsung often have special promotions to help finance the purchase of big-ticket items such as TV‟s, refrigerators, air-conditioners, home theatre systems, computers and even expensive mobile phones.

E-commerce and M-commerce
Although the vast majority of Filipinos still do not have access to the internet, a growing portion of urban consumers are now going online. According to various industry sources, 33% of Filipinos had access to the internet in 2011. Of the portion of the population accessing the internet, 52% go online through high-speed home broadband internet, while 48% access the web via internet cafés. The higher number of Filipinos which have home internet access is being facilitated by lower subscription rates and wider geographic coverage by internet service providers. Similarly, there has been an explosive growth of mobile phones (12.5 million handsets in 2011) along with a rapid growth in m-commerce. Given the huge potential of the internet sector in contributing to overall economic growth in the Philippines, government and private telecom companies such as Globe Telecom and Smart Communications are making huge joint investments to promote rapid infrastructure growth in this sector. Online shopping companies are building more robust websites and intensifying their marketing plans. Increasingly, companies are expanding their presence from traditional stores to online stores. However, despite the huge mobile penetration and extremely high usage of mobile phones for basic services such as texting and telephony, m-commerce still remains a niche activity because many companies still do not have adequately robust m-commerce sites. However, significant work is being done to rectify this. Ease of shopping, flexible shopping times, reasonably safe payment online facilities, easy deliveries and sound after-sales service are all important features that have led to the growth of online shopping. Reflecting this is the rise in per capita consumer spending on internet shopping, which has risen from Ps96.8 in 2006 to Ps131 in 2011. However, this is still much a smaller figure than per capita consumer spending on store retailing, which amounted to Ps27,072 in 2011. Online shopping remains mainly popular among young, urban tech-savvy consumers, but many more older and rural consumers are also getting involved due to the convenience it offers and the huge cultural popularity of using mobile phones and computers. Categories popular among Filipinos for online purchases include clothing, footwear, consumer electronics, flights, hotels and holiday packages, books, music and home ware. For other categories such as big-ticket home appliances, internet shopping sites have been used more as a source for product and price research than for actual purchases. Filipinos ultimately prefer to buy big-ticket items after physically checking them in a store. Online shopping is on the increase for beauty, personal-care and health products despite a wide range of other options such as beauty stores, supermarkets and hypermarkets and direct sellers. This is due to the increasing presence of specialist beauty retailers offering high-end imported brands that are often difficult to find in traditional stores. Popular Filipino websites include MyAyala.com, Filgifts.com, e2door.com, PadalaKo.com, 22ban.co, Divisoria.com, Mayaman.com, PinoyDelikasi.com, Pandeli.com, B2BpriceNow.com,

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and Expertrade.com. Amazon and eBay remain the preferred international internet shopping sites.

Personal Shopping
Typically, shopping for cosmetics, toiletries and personal goods is done once a month. Key outlets preferred are supermarkets, hypermarkets and specialist beauty stores. This is reflected by the high share of sales of these products form such outlets compared to other store types. In small villages, sari sari stores are also used by consumers, but most urban consumers hardly ever shop in these for personal goods, as they do not carry a wide range of brands and have poor displays. For shopping for clothing and footwear, consumers prefer specialist retailers that carry a wide range of brands, all conveniently located under one roof. Apart from these stores, many middle-income value-conscious consumers visit local markets, which are famous for attractive low prices. These markets are found in most cities (for example, Divisoria in Manila). Sustained economic growth has fuelled the growth in the number of Filipino millionaires and successfully created an affluent upper-income class of consumers. Supported by high incomes and influenced by global lifestyles, these consumers purchase luxury brands such as Hermes, Fendi, Rolex, Prada and Louis Vuitton. Increasingly, a wide variety of exclusive malls and outlets carrying these brands are found in large cities such as Manila and Cebu. Such outlets are either in shopping arcades of 5 star hotels such as The Shangri-La or in posh malls such as Green Belt 4 in Manila. Exclusivity, top notch service and well trained staff are key attributes sought by luxury consumers while shopping for these goods. Chart 19 Importance of Hypermarkets, Supermarkets and Discounters within Grocery Retailing 2011

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Chart 20

Regional Ranking of Sales through Internet Retailing 2011

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LEISURE HABITS Staying in
A popular Filipino leisure-time activity is for the family to gather around the television set watching the news or soap operas every night while also surfing the internet on laptops. Indeed, the rise in usage of such media has dramatically changed the way that Filipino families spend their time at home. Texting continues to be a favourite form of entertainment during leisure time, especially among young single Filipinos who may enjoy having “text-mates,” the modern version of the long-lost idea of pen pals. In fact, a study published in the Daily Blend, labels the Philippines as the texting capital of the world, sending in 2009 an average of 600 text messages per month per person, which is a huge 43% higher than users in the U.S. This is much higher than the 2003 Philippines average of 195 text messages sent per month and is likely attributed to more affordable texting plans available in 2010 and 2011. According to GMA News, the response of telecommunications companies to the recession, which included the increasing availability of unlimited-texting services, has tuned into the Filipino‟s need to be in constant communication. As a result, texting has become so much more affordable and has increasingly established itself as a favourite mode of entertainment among Filipinos, no matter of what social status. In fact, even household help can often be seen spending their time communicating with their text-mates, not just necessarily with family members. The GMA News article describes texting as a preferred mode of communication among teens, topping e-mailing and face-to-face communication in terms of popularity. In addition to texting, but still in accordance with the social nature of Filipinos, Facebook has become a favourite leisure-time activity and a common way of communicating with friends and loved ones. In 2011, the Manila Bulletin described the Philippines as not only the texting capital of the world but also the capital of social networking. In fact, the Philippines has reportedly shown the highest social-network penetration among internet users of any country worldwide.

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This is evident in the fact that many Filipinos, spanning across all ages, can spend hours just browsing through Facebook and playing the unlimited number of games available online. In 2011, games like Farmtown and Pet Society have become a common way for Filipinos to enjoy the internet with friends and are an important indication of how socially-inclined the Filipinos are as a people. Spending time with friends at home is another relaxing leisure activity common in the Philippines. The availability of the internet and other forms of multimedia entertainment has changed the manner in which the average family treats their friends and loved ones as guests. After-meal entertainment often turns into a gathering of different people busy with different technological gadgets. Dinner parties can quickly morph into Facebook-checking sessions, online gaming challenges or an impromptu movie marathon streamed on the Internet. Although urban affluent consumers have more options for spending leisure time, the leisure habits of lowincome consumers remain much more modest. According to survey by advertising company JWT, indulgences by these consumers during leisure time were found to include weekend DVD rentals enjoyed over home-cooked meals. Over the past few years, reading newspapers and novels has been relegated to the true bookworms, especially as the youth get flooded with a variety of technological gadgets. More families are also opting to buy elaborate home-entertainment systems for use during leisure time.

Going Out
Filipinos are social by nature and routinely spend their leisure time going out to relax. Choice of leisure activity varies by age, income and also whether one is urban or rural. Lower-income, rural consumers have simpler activities such as meeting friends and family in their home or going for picnics. In contrast, richer, younger and urban Filipinos have a wide range of places to go to during their leisure time, including pubs, cafes, restaurants and bars. However, one unique out-of-home leisure time activity of all Filipinos is to visit malls and spend time relaxing, eating out and doing some window shopping. In 2008, Reuters recognised how “malling” is used as a verb in the country, as the activity of going to a mall has become part of the cultural life of Filipinos. The country has at least ten of the largest malls in Asia. A news article published by Reuters estimates that although more than 40% of the country‟s total population live on only $2 or less per day, malls still remain packed throughout the week and more crowded on weekends. For many Filipinos, especially younger consumers with a lot of leisure time on their hands, one hidden agenda of going to malls is been to keep cool, as malls are known for having extremely effective air-conditioning systems. In fact, even during the economic crunch of 200809, Filipino visits to malls did not decrease in the least bit, as confirmed by Cora Guidote, vice president of investor relations at SM Prime Holdings, the company behind SM malls, the largest mall chain in the country. Guidote states that this was due to “malling” having become a mainstay in the average Filipino‟s lifestyle. Even if budgetary constraints restrict families from spending on shopping, the average Filipino still enjoys window-shopping. Going to malls is a common way for many families to unwind after a busy workweek. Feature interviews in Smart Parenting and Good Housekeeping lifestyle magazines routinely feature mothers mentioning how they spend bonding time with their little ones in shopping malls. Family dinners and weekly cinema visits are other popular family activities. Rising disposable incomes due to greater availability of jobs in some sectors of the economy may likely have contributed to the rise in movie-going Filipinos in 2011. Filipinos across all income levels also enjoy spending hours each week catching up with friends in coffee shops. Night clubs are frequented mostly by the middle- to higher-income group. Increasingly, over the past few years, nightlife centres have expanded in Filipino cities,

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containing coffee shops, clubs, restaurant-bars, and Karaoke bars. These areas are generally more crowded on Fridays and Saturdays as the majority of the workforce unwinds at the end of the typical workweek. Convenience stores with a dedicated area for snacking are becoming increasingly popular as meeting places. Tables and chairs allow customers to stay within the store with their drinks and chips instead of going to the more expensive bars. These stores are usually patronised by a younger clientele.

Public Holidays, Celebrations and Gift-giving
Filipinos are fond of public holidays, celebrations and gift-giving. Public holidays are viewed as a chance to get together with families and friends. The most popular public holidays for taking a trip with friends and families are the Holy Week holidays, which fall sometime in late March or April, depending on the Catholic calendar. This typically comes in the form of a fourday weekend, with Holy Thursday and Good Friday being deemed as non-working holidays. Since the country is predominantly Catholic, Christmas considered the most important season of all, and the top period for celebration and gift giving. The blog OMG Facts describes the Philippines as celebrating the longest Christmas season in the world, as the country is known for starting to decorate offices and homes as early as the first day of December and taking them down on the first Sunday of January. For Christmas, although the official public holidays are only Christmas Eve and Christmas Day (December 24 and 25), and December 31 and January 1 to celebrate New Year‟s Day, the entire period is a celebratory season, and malls/stores cater to the desire to exchange Christmas gifts as a display of affection and love. Special Christmas shopping zones are earmarked in many stores (for example, the bazaars commonly found in Divisoria and Greenhills). Gift-giving is precious for the Filipino due to the country‟s culture of being friendly even to those you are not particularly close to. This includes buying gifts for godchildren, whom one may not even be in contact with for the whole year. Other cultural nuances for this season include the Secret Santa gift-giving in offices and schools. Known in the local language as S.P.-S.P., or secret present, the gift-giving can span several days from the start of the Aguinaldo masses or Christmas dawn services on the 16th of December all the way until Christmas Day or until the company Christmas party takes place. Indeed, Christmas parties are a mainstay for every office in the country. Other occasions when Filipinos are fond of giving gifts include Valentine‟s Day. Gifts for Valentine‟s Day hardly ever outshine those given during Christmas. For Valentine‟s Day, the usual gifts given are chocolate and flowers, with paper greeting cards falling in popularity due to the rise of e-cards available on the internet. Meanwhile, other occasions for which gift-giving is deemed customary include weddings, baby baptisms, debuts, and birthdays that are celebrated with a party. Wedding gifts typically include household appliances or other items that the couple may use. Since around 2010, the use of wedding gift registry has become increasingly popular, reaching not just metropolitan Manila but also smaller cities across the country.

Culture
Traditional cultural activities remain more common among educated and affluent members of society. Popular culture has a strong hold on the majority of the population. Filipinos as a people are very influenced by Western popular culture. A Filipino-owned blog, Language „N Culture, identifies cultural activities that Filipinos enjoy such as All Soul‟s Day, New Year‟s Day and Holy Week. The country‟s love for music is apparent in nearly everything: the popularity of websites like YouTube, the rise of sales of mp3 players and other multimedia players, and even the rise in

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cinema attendance for folk films. If anything, Indie films are the most popular cultural outlets of Filipinos in recent times. Cultural venues like museums are popular among tourists but are not generally very popular among Filipinos. For example, historical sites like Intramuros or Luneta Park are increasingly marketed towards foreigners. Many magazines like Good Housekeeping and Smart Parenting are focusing on educating the young with cultural, featuring articles that include these locations as must-go places for family bonding. Of course, this is common only for the Manila populace, who also get to enjoy cultural events at the Cultural Centre of the Philippines from time to time. But the mass of the population has low involvement with cultural heritage of any form, except perhaps in terms of folk dances during town festivals or major cultural celebrations. The Visayas area is known for having a series of cultural celebrations with religious roots, with celebrations hailing the patron saint Senor Santo Nino, or the Christ Child. These celebrations include a full weekend of dances and revelry, with much music, food and related festivities. Other places of the Philippines also have their own versions of such celebrations, usually related to a patron saint or a special event in the history of their town. Chart 21 Regional Ranking of Consumer Expenditure on Leisure and Recreation as a Proportion of Total Consumer Expenditure 2011

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Euromonitor International

DIY AND GARDENING HABITS Attitudes To DIY
Over the past eight to 10 years, many Filipino men, and increasingly many more Filipino women too, have started are taking up minor DIY repair and maintenance work at home. Most people are happy to take up DIY jobs as they find them creative, enjoyable and relaxing, while others take up these jobs because the cost of repairs has been on the rise due to the shortage of skilled labour in areas such as plumbing, electrical work and carpentry.

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Rising incomes, the increased availability of affordable home loans and growing aspirations to own a home have led to the rise in home ownership. Filipinos have been increasingly undertaking small home-improvement projects on their own. The increased availability of DIY supplies, tools and instructional materials from a growing chain of specialist stores such as Ace hardware and larger DIY supplies variety in supermarkets like Robinsons, has also encouraged many more Filipinos to take up simple DIY work such as wall painting, minor electrical repair and small garden projects. Given Filipino‟s penchant for copying anything American, especially trends such as DIY that reflect them as modern and independent, it is no wonder that there is a growing popularity in the recent years

Attitudes To Gardening
Given the tropical climate, Filipinos are used to having a wide range of fruits and vegetables available throughout the year, and in general, most Filipinos enjoy growing some of their own food. Urban residents live in small apartments and do not have a lot of land for a full-scale garden, while those in smaller cities and provinces who live in houses with gardens and have an interest in gardening are easily able to pursue this activity. In large cities, gardening is pursued not just as a relaxing hobby but sometimes also to save cost on the cost of employing a gardener. In provinces and smaller towns, gardening labour is still affordable and people often use it as their large gardens can be too much work during free time at the weekends. Furthermore, such labour brings specialist skills in landscaping and the overall upkeep of the garden. Consumers can easily buy gardening supplies from the wide variety of garden centres, nurseries and supermarkets. Garden centres are either run by government cooperatives or private nurseries. All these centres offer a wide selection of seeds, ornamental and landscaping plants, gardening tools, gardening books and even help with providing specialist gardening labour. The trend for growing fruit and vegetables at home for personal consumption has existed for over a decade now. The concept of edible landscaping was introduced in the 1990s by Dr. Leonido Naranja of the University of the Philippines Los Baños both as a means to achieve a healthy lifestyle and to have ready access to fresh produce. This remains a very small niche activity, however, restricted mainly to affluent home owners who have the time to devote to such a passion for growing their own food. Chart 22 Number of Home Owners and New Dwellings Completed 2006-2011

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Chart 23

Regional Ranking of Home Owners as a Proportion of Total Households 2011

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PET OWNERSHIP HABITS

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Attitudes To Pet Ownership
Filipinos are a pet-loving people and pet ownership has grown over the past decade, even during the recession in 2008-2009. It is common to see families owning a dog, cat, bird or other domesticated animal. Many pet owners even go as far as taking care of wild and exotic animals such as cobras, iguanas and scorpions. Dogs and cats remain the most popular pets followed by other small animals such as rabbits, hamsters, bird and fish. Given that most urban Filipinos live in small apartments, only small pets are easy to keep. Unsurprisingly in provincial areas, with cheaper real estate prices and bigger homes and gardens, it is easier for rural consumers to own large dogs or even keep multiple pets. With increasingly stressful lives, many couples are choosing to not have children but instead shift their affection to pets, and they have started considering them as integral family member. According to a lifestyle article in leading newspaper Philstar, many single Filipinos (both young or older/retired people) are eager to own pets and often look at themselves as „pet parents‟. Even in families with children, pets are being increasingly seen as a key family member. This attitude, coupled with rising disposable incomes, is reflected in the growing spend on pet-care products such as pet food, pet grooming and veterinarian services. Per capita spending on pet food increased from Ps75 in 2006 to Ps84 in 2011. The government and various pet-care organisations such as the Philippine Animal Welfare Society have been active in strengthening legislation and rules that enhance the welfare of pets. Although implementation of such rules is sometimes weak, pet welfare organisations and pet lovers are increasingly working together to improve the conditions of care for all pets. One such measure is the government‟s introduction of RA 8485 (Animal Welfare Act) and another being the Adopt a Cat project by large animal-welfare organisations such as Compassion and Responsibility for Animals‟ Welfare Philippines and Bow & Wow Philippines. Pet-care standards are rising as can be seen by the increasing presence of pet shops selling a wider range of products such as special organic foods, pet toys, pet training equipment and pet grooming products. Until about a decade ago, owners commonly fed home-cooked food to their dogs and cats. Since around the mid-2000s, many urban consumers shifted to the generic packaged foods that are easily available at agricultural supply stores and even neighbourhood supermarkets. More recently, consumers have further upgraded to branded packaged pet food from international brands such as Pedigree and Whiskas. Growing awareness of pet nutrition and rising affordability have driven the demand for premium branded pet foods. As well as the rising spend on food, pet grooming services are on the increase, especially in upscale neighbourhoods in cities. According to a lifestyle article in leading newspaper The Inquirer, several premium petcare services can be seen in upscale neighbourhoods such as Bel-Air and Palm Village in Manila. In fact, services are getting more exclusive with new innovative concepts being launched every month. A recent example in 2011 is the launch of mobile grooming salons that offer convenient and high-quality services in the comfort of the home. Chart 24 Pet Population and Sales of Pet Food 2006-2011

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Chart 25

Regional Ranking of Pet Ownership 2011

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TRAVEL HABITS Getting Around
The majority of the population uses public transport, but over the past decade or so, ownership of personal vehicles has increased due to rising incomes, the availability of greater credit and the availability of a larger market for used cars and motorcycles. Driving privately owned cars is a common practice among upper-income consumers, much of it stemming from the status symbol associated with owning a car, even if it is a used car. The Philippines is a country with close family ties, and cars are shared among family members. This is part of the reason why Filipinos prefer sedan/family cars and sports utility vehicles (SUVs) that can seat the entire family comfortably. Families in high-income groups generally prefer SUVs and other luxury cars, and they may even own more than one car. According to the website Tsikot.com, Filipinos, especially affluent consumers, give very high importance to owning premium assets, especially cars. Interestingly, Filipinos are very careful in their choice of vehicle brand, being particularly impressed with brands that are perceived as exclusive. For example, according to the blog Get Real Philippines, the Mitsubishi Pajero is apparently viewed as a luxury SUV, with the country estimated to have only 31 Pajeros per 1,000 residents. According to reports from Top Gear, the Toyota Vios and the Toyota Innova were the two best-selling cars in the country from 2005 to 2010. The popularity of the Toyota Innova is consistent with Filipinos‟ preference for family vehicles, and of the popularity of the Toyota brand itself is a reflection of Filipinos‟ strong penchant for Japanese cars, which are considered to have a premium image. Despite the growing presence of other brands, such as Korean brands Kia and Hyundai, or the growing amount of promotions from brands such as Chevrolet, Japanese cars continue to be associated with high quality, and consumers are still quick to turn to trusted brands like Toyota and Honda.

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Meanwhile, the usage of motorcycles in the country has continued to rise, this is because motorcycles are the cheapest form of transportation, are easy to manoeuvre through traffic and are easy to park, especially in congested areas. Demand for motorcycles was especially high in places in the Mindanao area, which has a less-developed public transport system compared to bigger cities. In terms of the look of the car, Filipinos are fond of adding car accessories. The blog Get Real Philippines mentions that Filipinos add many accessories even when these are unnecessary. For example, tow bars are seen in many cars, including those with engines that are not powerful enough to tow anything heavy. Low-profile tires are also a common addition made to cars, which, according to the blog, is unusual because these do not give enough cushioning against roads in the Philippines. In terms of in-car accessories, DVD players and GPS navigators are among the most popular choices in recent years, again mainly because they add to the novelty of the car and project their owners as being tech savvy and progressive.

Use of Public Transport
The dominant form of transport among Filipinos is public transport. Bus, coach and taxi services remain most popular, constituting 70% of the public transport spend in 2011. Rail transport is next but is much lower in popularity, constituting only 16% of the public transport spend in 2011. With passenger car ownership rates standing at only 11% of households in 2011, the use of public transport is vital for the average Filipino for daily commutes to work or school, particularly in large cities where everything is far apart. The most common mode of public transport used by consumers both in urban and rural areas is the jeepney. This is refurbished version of the jeep, many of which had been shipped to the Philippines after the Second World War. Instead of the seats facing forward, the modern jeepney has seats facing each other, seating an average of 12 to 16 passengers. Jeepneys are given a fixed route as regulated by the Land Transportation Franchise Regulatory Board. For long distances, larger jeepneys are utilised as well as buses. According to Journal.com.ph, the wide popularity of jeepneys is due to their being the cheapest, most convenient and most widely available form of transportation. Jeepneys are still much cheaper than taking a taxi, especially since taxi cabs charge a flag down rate of about Ps40, as of 2011, and getting stuck in traffic definitely adds steeply to the overall taxi fare. Jeepney usage is higher than bus usage, perhaps due to the greater route connectivity that jeepneys have. Buses are mainly used as daily transport in large cities like Manila, whereas in smaller cities, buses are only utilised for long-distance travel, which is not on a daily basis. Although jeepney usage is mainly among consumers from mid- to low-income levels, consumers in the upper-income classes do use this service on occasions as well. For places that are not accessible by jeepney routes, tricycles, trisikads (motorcycles) or pedicabs (bicycles with side cars) are used commonly. For some smaller towns, particularly those in the Mindanao region, there are motorcycles that serve as public transport, with passengers simply riding on the motorcycle behind the driver. The passenger rail system in the Philippines exists only in the metropolitan Manila area. Although there are increasingly more rail system lines, it is only in this traffic-congested and population-congested area that it is deemed necessary and greatly beneficial.

Air Travel
Increased competition among airlines from the mid-2000s has given more consumers the option to travel by air, an option that was traditionally limited to the rich. As the Philippines comprises 7,107 islands, air travel is the fastest way of getting around. When the roll-on roll-off system was introduced in 2005, air travel was significantly affected, as travellers could now take

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a bus that went into the roll-on-roll-off barges to go to places that used to be accessible only by plane. However, since about 2007, airlines have been offering promotional rates that give consumers the option of travelling by air at just a slightly higher cost than taking the bus. This has resulted in a boom in air travel, as it is obviously much more convenient and takes much less time to get to destinations. The country‟s flagship airline is Philippine Airlines (PAL), which over the past few years has faced increasing competition from Cebu Pacific, mainly due to price promotions offered by Cebu Pacific throughout the year. However, PAL has acquired Air Philippines Express to battle with Cebu Pacific in terms of prices and flight routes. All these activities have made things more attractive to consumers, opening a wider range of air-travel options. In 2010, other cheaper airlines have appeared, such as Zest Air, providing consumers with an even greater chance of finding a cheap flight. Most large airports in the country are easily accessible, and they are well-equipped with many retail outlets to keep passengers occupied while waiting for flights. International airports in Manila, Cebu and Subic have good quality duty-free shops for passengers‟ enjoyment. Chart 26 Number of Scheduled Airline Passengers Carried, Kilometres Travelled by Air Compared Length of Public Railway Network Operated and Road Network and Consumer Expenditure on Transport Services

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Chart 27

Regional Ranking of Possession of Passenger Cars 2011

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VACATION HABITS Attitudes To Taking Holidays
Filipinos have always been a people of close family ties, and they enjoy travelling with friends and family. However, given that majority of the population has a low income, going away for holidays is largely limited to middle- to upper-income families. For the mass population who cannot afford to go on vacation, holidays translate instead to going to their hometowns and visiting loved ones. According to a discussion board on the website MyLot, the salary of the average employee is only enough to make ends meet, leaving little, if anything at all, for luxuries like vacations. However in recent years, middle- and upper-income Filipinos are taking more vacations due to their rising incomes, many more advertisements and promotions by travel companies and the increasing presence of low-cost airlines. This is reflected in the rising per capita spend on domestic as well as overseas holidays. Moreover, for those income groups experiencing rising incomes, the availability of affordable holiday packages has resulted in the trend for quick weekend getaways gaining ground. Typically, Filipinos get 20 to 30 days of annual leave. Many family holidays are timed along with school holiday periods. Holy week is a popular holiday-taking period, as is the last week of December leading up to the New Year. Visits to beaches and mountain areas are most popular, and people are increasingly scouting for new, offbeat holiday spots that are less crowded and offer a new experience.

Main Holiday-taking Trends
The majority of the Filipinos continue to holiday with their family. The trend for friends-only vacations has started to get popular, but its remains a niche market, mostly common among urban affluent consumers who lead a global lifestyle. Even today, it is still quite common for teenagers and youngsters in their early 20s to holiday with family. Over the past few years,

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however, it has gradually become fashionable for urban upper-income youngsters to have friends-only holidays. Families typically view Holy Week as a good time for outings as it coincides with children‟s school holidays. Beaches and mountain getaways continue to be the main way that families enjoy holidays, especially in terms of domestic destinations. This is especially true for families with relatively elderly members, as they believe the beach breeze is good for overall health. For single people, mountaineering and camping have become sports of their own, with young professionals increasingly enjoying mountain getaways with friends. Much of the appeal of this type of holiday is linked to the increasing affordability of airline tickets, which gives young professionals more destination options within an hour‟s flight away while also providing a sense of challenge and accomplishment. The continued presence of mountaineering clubs has contributed to the popularity of these types of holidays, albeit limited to the adventurous and physically-inclined traveller. With many Filipinos working around the world, many people have relatives in various parts of the world including southeast Asia, the Middle East, the U.S., the U.K. and Australia. Many Filipinos therefore take holidays to visit close friends and relatives who have migrated or are working overseas. As holidays to these destinations are usually undertaken for the first time, a considerable time is spent on sightseeing and visiting famous tourist attractions, shopping and buying gifts for family and friends back home. The increasing availability of low-cost airlines, especially for southeast Asia and Australia, have made these very sought-after destinations for affluent Filipinos.

Domestic Versus Foreign Holidays
Domestic holidays continue to dominate the share of holidays taken by Filipinos, but since around 2005, the share of foreign holidays has started to increase due to more affordable air fares from low-cost carriers, promotional hotel rates and various other discount holiday packages available from tour operators and online travel sites. For example, Cebu Pacific‟s Piso-Fare is a strongly-awaited promotion among travel enthusiasts, with many young professionals waiting until midnight for the sale to be announced and then to be the first to take advantage of the huge discounts that are typically offered in such promotions. Older Filipinos are still not too comfortable with such new trends and online booking, as they fear security issues linked to online payments, but increasingly, most young and tech savvy Filipinos are taking advantage of the huge price discounts available for booking holidays online. Favourite domestic destinations include beaches and mountain resorts. Among the different tourist destinations in the country, Cebu has become a top choice, even topping the white sand beaches of Boracay Island, Aklan, which were the traditional favourites until a few years ago. According to E-Turbonews.com, the special appeal of Cebu is its rich mix of historical heritage, modern infrastructure and a variety of destinations. Cebu also boasts many great beaches. Next to Cebu, the white-sand paradise of Boracay remains another favourite destination for locals and foreigners alike. However, many Filipinos feel that the island has fast become a commercialised spot without the rugged appeal of the old times, and hotel rooms have become increasingly expensive. Despite these hurdles, according to Edwin Trompeta, Director of Tourism, Western Visayas, Boracay continues to thrive due to the great natural beauty it offers. According to a study conducted by Yahoo! Philippines, Boracay is ranked as the most-searched summer travel destination. According to the same Yahoo! study, other top holiday destinations include Palawan, Batangas, Puerto Galera, and Bohol. These places have special attractions other than their beaches, including nature tourism, diving and bird watching. Interestingly, since around the mid-2000s, with the rise of promotional airfare, it has sometimes been more affordable to buy airfare tickets to foreign destinations instead of

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domestic ones, particularly for people who live in Manila. Promotions often range as high as 90% off, making some overseas destinations more affordable than domestic destinations. Singapore and Hong Kong remain favourite destinations for many middle- to upper-income families. Singapore is popular mainly due to its age-wide appeal, with something for all ages in the family and more recently due to the opening of Universal Studios in 2008, the only such venue in Asia. Foreign holidays are typically taken by affluent families, richer retirees and increasingly by younger consumers who have seen a rise in their incomes due to many more job opportunities that have opened up over the past few years.

Preferred Travel Methods
Although travelling by land is by far the easiest and cheapest, the limited access by land to many well-marketed domestic destinations in the country has resulted in more Filipinos travelling by air. Increasing availability of low cost airlines has added to the ease of using air as a rapidly growing mode of travel. However for popular domestic destinations that can be accessed by land, bus/coaches and personal cars remains a more cost effective mode of travel (for example trips to Batangas from Manila can be easily and cost-effectively done by bus/coach or personal cars). The quality and service of buses has been improving thanks to the rising competition from low-cost airlines. Many travellers continue to use multimodal transport, as these are well organised and cost effective. Families in the region of Panay, for example, when planning a trip to Boracay, would take the bus to Caticlan, and then take the onward ferry to Boracay. Affordable airfares have also driven the trend for overseas vacations. With a wide range of promotional holiday packages from low-cost airlines, full-service carriers have also started offering competitive air fares and attractively priced holiday packages (hotel-air-car rental), making it convenient for Filipinos to enjoy the luxury of a full-service airline at attractive prices, this being especially appealing for long-haul travel to foreign countries.

Popularity of Different Types of Holiday Activities
In 2011, holidays to the beach and mountains continued to dominate but many new trends and niche holiday activities have emerged. These include adventure tourism, which is getting especially popular among young, affluent travellers; eco-tourism; and spa/health wellness tourism, which has a high appeal among women as well as older richer consumers. Adventure holidays have emerged as one of the fastest growing trends, and according to specialist online adventure tourism website adventuresportsholidays.com, Philippines is an adventure travellers delight, featuring options ranging from climbing volcanic peaks, river rafting in the rapids in North Luzon, eco-tourism in the mountainous rainforest on Luzon island and wind surfing in Boracay. According to report on Yahoo!, the Spa Association has predicted that the recent strong growth in spa tourism will get even stronger in 2012. Due to the combined effort of government and travel operators in promoting holiday packages, consumers increasingly have a wide range of choice, depending on their budgets. Chart 28 Domestic and Outgoing Tourist Expenditure by Sector 2006-2011

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Chart 29

Regional Ranking of Holiday Departures 2011

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FINANCIAL HABITS Attitudes Toward Payment Methods
For the majority of payments in the Philippines, cash rules. Over the past decade, despite the rapid rise of newer payment instruments such as credit /debit cards, cheques, electronic transfer, internet banking and mobile payments; cash makes up the huge majority of all payment transaction among Filipinos. The main reason for the popularity of cash is its convenience and wide acceptability. Most credit and debit cards require card-payment machines and readers, and these are often lacking in most small towns and provinces as well as in small shops and restaurants in larger cities like Manila. Filipinos also worry about credit-card scams and the safety of leaving card details on the internet, as some perceive that many domestic as well as international sites still lack adequate payment security features. Although there has been a rapid growth of tech-savvy young consumers, other Filipinos are still not comfortable with newer financial payment modes using technology. However, credit card ownership is still considered to be a status symbol, so many Filipinos may own one. The amount of cards in circulation increased from 68 million in 2006 to 108 million in 2011. Actual usage as a percentage of total payment transactions, however, is still very low. Moreover, with the economic slowdown in 2008-2009 and the rise in credit-card defaults, credit-card companies too have somewhat discouraged consumers from using credit, encouraging debit payment instead. In 2011, per capita volume transactions of credit cards were 0.5 versus 2 for debit cards. Although cash payment still dominates, in line with the Central Bank of Philippine‟s goal of moving to an cashless society, payment policies for non-cash instruments are being strengthened. Key focus areas being the widening of infrastructure for non-cash products, improving payment security features and having awareness programmes for consumers that encourage use of these instruments. As a reflection of this, the number of point-of-sale terminals has increased from 208,100 in 2006 to 274,100 in 2011.

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Cheque payment is still perceived by most as an instrument used mainly among the corporate and government sectors. For consumer payments, cheques are mainly used to make large payments such as annual school fees, rents, purchase of big ticket items and down payments for mortgage loans. It is rather uncommon for small shops or enterprises to accept cheques. This is because these are not instantly settled: cheque clearance takes two to five days, thus delaying earnings. The chances of a cheque being dishonoured also exist, so for routine smallpayment transactions, cheques are not generally accepted. Electronic payment is an emerging trend but still niche, more common among educated upper-income tech savvy consumers. Some areas of electronic payments include utilities, rents and annual fees. Although currently small, the area has scope to rapidly increase, as it offers convenience to busy urban Filipinos.

Savings
The Philippines has modest household/consumer savings as a percentage of national income, making Filipinos vulnerable to macroeconomic instability. Savings as a percentage of disposable incomes fell from 4.2% in 2006 to 3.5% in 2011. The economic slowdown in 20082009 and the high inflation since 2010 were added woes contributing to an already modest savings ratio. The Philippines lags behind counterparts like India and China with regard to savings. An article from the IMF quarterly publication Finance and Development states that not only do these Asian neighbours have a higher current savings to GNP ratio but that future trends also show higher growth rates for them compared to the Philippines. Traditionally, reasons for the lower savings ratios among Filipinos were lack of adequate awareness of savings and investment instruments, unaffordability of many savings products and difficulty in accessing them. However, increasingly, Filipinos across income levels have started saving higher amounts in a variety of savings instruments. Key savings instruments include savings accounts and deposits in banks. Consumers also save using unit trusts, mutual funds, equities and corporate bonds, insurance and pension plans. Savings deposits offer low interest rates, with cooperatives offering better rates than commercial banks. According to reports by the Central Bank of the Philippines, top savings/commercial banks include Philippine Savings Bank, BPI Family Savings Bank, and Planters Development Bank. The Central Bank of the Philippines is urging beneficiaries of remittances to channel this money for more productive uses such as savings and investments. The bank‟s governor, Amando Tetangco Jr, urged consumers to convert remittances into productive savings in order to boost the country‟s buffer fund to fend off the impact of global shocks. According to Imelda Nicolas, chairperson of the Commission on Filipinos Overseas, “such pooled investments should be used productively through savings instruments of cooperatives, microfinance, investments programs, and social enterprise to transform underdeveloped and poor rural areas into vibrant communities.”

Loans and Mortgages
The soaring per capita consumer lending outstanding is evidence of the rising popularity of taking out loans. In 2011, in terms of outstanding balances per capita, the top loans made to consumers were credit card loans (Ps1,762), followed by automobile loans (Ps1,526), other personal lending (Ps184), home improvement loans (Ps161) and education loans (Ps105). This trend has been aided by market-enabling economic policies of the Central Bank of the Philippines, the increasing number of lenders as well as a reduction in retail interest rates. Also, importantly, changing consumer attitudes – an increased ease rising with debt - has driven the growth in loans. Compared to about 20 years ago, when most Filipinos waited and saved before

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purchasing products, the current generation, supported by rising incomes and influenced by global attitudes, prefers to opt for loans and enjoy goods and services rather than save and wait. Mortgage lending and auto lending became the major drivers of consumer loans in the Philippines during 2011, with auto lending registering the fastest expansion in terms of outstanding balance. For mortgages, consumers prefer either the large commercial banks such as Banco de Oro and Bank of the Philippine Islands or government-owned corporations such as PAG-IBG, GSIS and SSS. There is an increasing range of financing options for consumers for loans for home appliances, furnishings and improvements. Lenders have come up with innovative strategies, including the alliances between banks and retailers to provide loans for home appliances. An example of this is the tie-up up of Bank of the Philippine Islands and Ayala Malls, part of the Ayala Group. Personal loans are another new loan product that has put easy finance into the hands of Filipinos for a wide variety of activities. These include weddings, vacations and home renovations. Education loans are also seeing rapid growth. Although personal and education loans have higher interest rates than auto or mortgage loans because they come from large banks and finance companies, Filipinos prefer these lenders rather than private individual lenders, as private lenders charge much higher interest rates and often have burdensome collateral terms. Looking into the next few years, growth in consumer loans is expected to see steady growth, aided by rising demand from consumers and increasing competition among key lenders launching new products and reaching out to smaller towns. According to a 2011 report by financial research firm Asian Banker, key consumer lenders such as BDO, Metrobank, BPI and HSBC are all working to expand their consumer lending operations to take advantage of rising consumer incomes and consumers‟ growing comfort with debt. Strongly growing aspirations for personal vehicles will likely make auto lending one of the highest loans categories during the forecast period. Similarly mortgages/housing lending will also remain a big loan area due to the expected increase in home ownership among the rising number of professionals in the Philippines and investment by overseas Filipino workers in homes. These workers see homes as an asset with one the highest returns on capital as well as a good hedge against inflation. However, future growth in consumer lending is not without challenges. According to the 2011 report by Asian Banker, consumer loans remain a smaller share of the total portfolio of key lending banks compared to more profitable businesses such as investment banking and corporate lending. The report comments that the key risks of consumer lending include the high cost of administering small loans to consumers; non-performing loans, especially in unsecured consumer loan products such as credit cards; and inadequate risk management policies: there is an absence of credit rating bureau and inadequate credit checking of consumers. The report states that although internet and mobile banking have emerged to offer a low-cost method of lending, the fact that even by 2011 these constitute a very small share of overall consumer lending reflects that such lending is overrated, risky and not yet a cost effective way of consumer lending. Big credit card players such as BDO, BPI, Metrobank, Citibank and HSBC have cooperated to tackle credit risk through better risk frameworks, improved safety through internet lending, better consumer credit tracking and the establishment of a credit bureau. With many more similar initiatives, a wider variety of consumer loans at more attractive terms are expected to be available in the future. Chart 30 Consumer Lending Compared with Savings and Savings Ratio 2006-2011

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Chart 31

Regional Ranking of Financial Cards in Circulation 2011

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