In the face of an economic landscape marked by a 7.2% inflation rate and a depreciating peso, businesses in the Philippines must rethink their strategies to retain customers. A recent study by Organic Intelligence highlights the importance of consumer loyalty during these challenging times.
Consumer Preferences in a Tight Economy
A price freeze could be highly effective in building customer loyalty with value-conscious customers.
Organic Intelligence Study
The findings reflect a significant shift in consumer behavior, revealing that many are feeling financially strained. With the peso closing at a record low of P64.17 to the dollar on October 27, businesses face mounting pressure to balance operational costs with consumer affordability.
Inflation's Impact on Business Strategies
Many companies are now confronted with the dilemma of how much of their rising costs can be passed on to consumers. Import-dependent sectors—like retail and manufacturing—are especially vulnerable to the effects of the weak peso, while exporters may find opportunities in the current exchange rate.
Former Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo notes that the peso’s decline stems from deeper economic issues, including a $9.1 billion balance of payments deficit recorded in the first nine months of 2026.
Looking Ahead
As inflation continues to rise, the Bangko Sentral ng Pilipinas has revised its inflation forecast for 2027 from 5.4% to 6%. This signals that businesses will need to navigate these economic challenges carefully, especially as household consumption makes up about 70% of the economy.
In this environment, strategies like price freezes and smaller product sizes could be effective methods for businesses to maintain customer loyalty and ensure sustained sales.