Metro Manila’s middle class Gen Zs and millennials have saved less or none at all in the second quarter of 2023 due to rising inflation, findings of a survey conducted by Nomura Research Institute (NRI) Singapore-Manila branch.
The survey, which was conducted from May to June, showed 94 percent of respondents felt the effects of inflation during the quarter, forcing these young adults to make cuts in their non-essential spending, including leisure and entertainment expenses while focusing on essentials such as food, transportation, fuel, and utilities.
Six in 10 reported price increases had the greatest impact on their food and beverage expenses, followed by transportation and fuel costs at 15 percent, and utilities, such as electricity, water, and internet bills, at 14 percent. An overwhelming 83 percent of participants stated that they had reduced their spending on non-essential goods, while 79 percent found it necessary to cut back on leisure and entertainment expenses.
A. third of respondents (32 percent) reported being unable to save over the past 6 to 12 months. For those who managed to save, 44 percent saved a lower percentage of their income. The persistent inflationary pressures have led 38 percent of respondents to adjust their savings goals by either reducing the target amount or delaying their timelines. Similarly, 47 percent of participants had to make similar adjustments to their savings plans.
To cope with the financial strain, a significant number of respondents have turned to loans.
Of the surveyed individuals, 71 percent reported having outstanding loans.
The survey also revealed that 41 percent of respondents possessed credit cards. Personal loans were the most prevalent type of loan, accounting for 30 percent of respondents, followed by alternative installment loans and salary loans, each representing 19 percent respectively.
A notable 94 percent expressed concerns that continuous price increases would persist over the next 6 to 12 months. Consequently, 91 percent of participants felt the need to explore additional income streams.
To adjust to the current economic situation, 86 percent of respondents planned to continue cutting back on expenses, while 73 percent intended to reduce their spending on entertainment and leisure activities.
In terms of savings, 34 percent of participants expressed plans to increase their savings allocations to better prepare for the future, while 33 percent aimed to maintain their current savings pattern. However, 16 percent of respondents planned to reduce their monthly savings allocation due to inflationary pressures.
