Consumer-based companies may achieve core profit growth next year by as much as 11 percent on the trickle-down effects of election spending and further interest rate cuts by the central bank, Philippine stockbrokers said.
RCBC Securities Inc. forecasts an 11-percent increase in core net income by these consumer-based companies in 2025, while their shares of stock are seen climbing 6 percent.
“We remain optimistic for fiscal year 2025 with a core net income growth forecast of 11 percent as demand for consumer products is likely to recover amid the improvement in the macro environment, election spending until mid-2Q25 (second quarter), and the possible further interest rate cuts by the BSP (Bangko Sentral ng Pilipinas),” it said.
Stockbroker Unicapital Securities Corp. shared the view and said Filipino households “could be seeing a bit more cash in their pockets in 2025.”
Households may also enjoy a tailwind of a likely cooling off of inflation next year, Unicapital said, seeing inflation averaging 3.1 percent next year, driven by expectations of lower global oil prices.
Unicapital said companies will also benefit from the newly enacted Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) law.
“Businesses will also get (some) relief from the CREATE MORE law, which cuts the corporate income tax rate to 20 percent from 25 percent,” the note said.
“Export-oriented consumer companies are also positioned to gain from value-added tax zero-rating on local purchases and essential services. This reduction in tax burden is expected to create more jobs and fuel economic activities. All told, lower inflation and unemployment should support growth in household spending, which are key growth drivers of consumer companies,” Unicapital added.
SB Equities Inc. sees spending during the election period likely driving Philippine growth toward a 6.1 percent expansion next year.
Historically, growth tends to be faster during an election year compared with its prior period, SB Equities said in its note.
Among the sectors expected to benefit from the rosy outlook for next year are construction, finance, and retail trade, it added.
