Consumption in the Philippines: In the Course of Unemployment and Loan Acquisition

Unemployment is one of the problems of Filipinos, which affects their consumption of goods and services since they have no income, worsened by the increasing prices in the market. Here, they tend to acquire consumer loans to support their means in obtaining their needs and wants, but due to the acquisition of previous loans and obligations to pay, they tend to adjust their consumption. Embedded from the Life-Cycle Hypothesis, Permanent Income Hypothesis and Keynesian Consumption Theory, the main objective of the research was to identify the relationship of unemployment, consumer loans per capita, real gross domestic product per capita, and inflation rate with the real household final consumption expenditure per capita in the Philippines using Ordinary Least Squares (OLS) in multiple regression analysis, and diagnostic tests in Eviews software using empirical time-series quarterly data from 2009 to 2019. This research found that unemployment and consumer loans per capita have an indirect relationship with the consumption of Filipinos. On the other hand, the gross domestic product per capita has a direct relationship. This claimed that all variables are significantly related to consumption except the inflation rate, although it showed an indirect trend. The findings exposed that Filipinos adjust their consumption to cope with no income due to unemployment, acquisition of consumer loans, and inflation rate to attain their needs and wants while having income increases their consumption. This research recommended that the Philippine government support the unemployed Filipinos by providing insurance or benefits, lessening the lending interest rate of loans, and overseeing the market prices to aid their consumption.