The burgeoning middle class in the Philippines is set to exceed the spending power of Italy’s middle class by 2030, in a sign of the Southeast Asian nation’s growing economic might.
Along with many of its neighbours, the Philippines has a growing tech-savvy population, an exploding digital economy and an increasingly integrated regional trading network, all of which is helping to fuel the emergence of this new wealthy demographic.
Digital, social and mobile uptake in Southeast Asia - 2018
Digital penetration has reached well over half of the nation’s population with 67 million internet users and the same number of social media users. This rapidly expanding digital culture is facilitating online businesses both domestically and throughout the region.
The country’s growing affluence is attracting attention from global businesses keen to invest in dynamic emerging economies.
For example, IKEA is bringing its flat-packed world of self-assembly furniture to Manila. Covering 65,000 square metres in the prestigious SM Mall of Asia, the new outlet will be the world’s largest IKEA outlet. The Swedish retailer also aims to appeal to online shoppers with an ecommerce facility.
Business is burgeoning on the homegrown front too. Just last year, the country had its first unicorn in Revolution Precrafted, which was valued at more than $1 billion. The company makes homes that snap together like Lego blocks, which is helping to address Asia’s population boom.
The rise of the middle class in the Philippines is indicative of wider global demographic changes.
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Rising out of poverty
For the first time, more people around the world are now living in middle-class or rich households rather than in households deemed to be poor or vulnerable to poverty. The global middle class is forecast to expand to more than 5 billion by 2030, and most of that growth will take place in Asia. .
Consumption by the middle class accounts for more than one-third of global demand, according to think-tank Brookings.
At current growth rates, Asia will command more than 50% of global middle class consumption by 2030.
No wonder then that global businesses are starting to pay attention to this rapidly expanding market.