A deceleration in income and spending growth in Indonesia and the Philippines contributed to a drop in the FTCR Asean Consumer Index in the third quarter. Nevertheless, the tracker remains comfortably in positive territory for all five countries, pointing to continued growth in household consumption. 

The index — which is based on a survey of 5,000 consumers across Indonesia, Malaysia, the Philippines, Thailand and Vietnam — ticked down to 66.8 in the third quarter from 67.9 in the previous quarter. 

The largest contributor to the decline was a dip in the FTCR Household Income Index, which fell to 69.3 from 71.9 in the second quarter. Respondents in Indonesia, the Philippines, Malaysia, and Vietnam reported less robust income growth than in previous quarters. 

Similarly, the Discretionary Spending Index decreased to 66.9 from 68.7 previously. Sizeable drops in Indonesia and the Philippines outweighed small gains in the other countries. 

The largest decrease in both the Household Income and Discretionary Spending Indices came in the Philippines, where consumers are being squeezed by rising inflation and a weaker peso. The country has also been hit by a string of severe typhoons, disrupting the economy in affected regions. 

Indonesia is also facing pressure on its currency, which recently breached Rp15,000 per US dollar for the first time since the 1997 Asian financial crisis. A 3.9-point drop in our discretionary spending index for Indonesia reflects weaker exchange rates which depressed spending on imported goods. Indonesians also reported slower household income growth. 

On the other hand, the Consumer Borrowing Index rose one point to 64.1. Respondents in all five countries reported an uptick in borrowing versus a year earlier. While high household debt levels are a concern in Malaysia and Thailand, increased willingness to borrow reflects confidence in the economy and household finances. 

FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and south-east Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors.