Consumer companies in the Philippines to benefit from inflation easing

Sales will continue to grow strongly on the back of a more favorable consumer sentiment, says Maybank ATR Kim Eng.

Maybank ATR Kim Eng noted:

Fuel prices in the Philippines have been going down, as benchmark global crude oil prices dropped 18.5% YTD to USD83.77/barrel. As a result, inflation eased MoM in May to 2.9% YoY.

We likewise revised down our inflation forecast this year to 3.1% from 4.3%. We believe that consumer companies will be the main beneficiary, as sales will continue to grow strongly on the back of a more favorable consumer sentiment.

Lower fuel costs should also help improve margins of the food and beverage companies due to lower packaging and freight costs.