Downward interest rates and sustained economic growth, supported by election-related spending, boosted a still weak private consumption in the Philippines in the second quarter of 2025, according to global financial giant Visa.

According to Visa Business and Economic Insights’ Asia-Pacific spending momentum index (SMI) for July 2025, “Vietnam and the Philippines registered notable gains, supported by strong economic growth and accommodative policy environments” during the April-to-June period.

It was in the second quarter when the Philippines held its May midterm elections, which economists have regarded as a perennial growth booster despite waning contributions to gross domestic product (GDP).

Also, since the start of its monetary easing cycle in August last year, the Bangko Sentral ng Pilipinas (BSP) has already lowered key interest rates by a total of 125 basis points (bps) to date. In June, the BSP’s policy-setting Monetary Board further cut the policy rate by 25 bps to the current 5.25 percent.

The increases in SMIs in the Philippines and Vietnam by 3.2 points and 4.1 points, respectively, bucked the trend in emerging Asia, which also includes India, Indonesia, Malaysia, and Thailand, where “consumer spending momentum remained subdued” during the second quarter, said Visa principal Asia-Pacific economist Simon Baptist and Asia-Pacific economist Minakshi Barman.

Visa’s SMI, which compares the quarter to the same quarter in the previous year, measures on year-on-year changes in consumer spending with Visa bankcards, it explained.

Emerging Asia’s second-quarter SMI shrank by 0.3 point to 98.5.

However, Visa’s SMIs for the Philippines both showed tempered discretionary and non-discretionary private spending, on the back of “weakening” momentum during the months of May and June after April shrank.

At the end of the first half of 2025, the Philippines’ discretionary spending momentum stood at 97.2, while that for non-discretionary spending was at 90.3—both below the 100 level, which indicates contraction.

The “weakening” SMIs in May and June 2025 were nonetheless an improvement from the “contracting” scores for the entire second quarter as well as the five previous quarters starting with the first quarter of 2024.

In the fourth quarter of 2023, the Philippines’ SMI was “weakening” following a “steady state” in the third quarter of 2023, and a “strengthening” SMI in the second quarter of 2023.

In the third and fourth quarters of 2022 as well as the first quarter of 2023, the Philippines posted “expanding” SMIs.

“The Visa SMI measures the breadth of year-over-year change in household spending within an economy, including the share of households with increased spending compared with those where spending was stable or declined. The index is generated using proprietary techniques that extract economic signals from business-related noise inherent in VisaNet transaction data, such as portfolio flips, routing changes, or evolving acceptance across geographies or merchant segments,” it said.

“The resulting sample data is then aggregated using a diffusion index framework in which index values are scored from zero to 200. Values above 100 indicate broad-based net acceleration in economic momentum. Values below 100 indicate contraction on an annual basis,” it added.

Baptist said in a LinkedIn post last week that the quarterly Asia-Pacific SMI for the second quarter of 2025 is the first time that Visa’s real-time measure of spending momentum covered 11 regional markets.