What share of the financed capital gains are spent on consumer goods and services, thereby reducing the saving rate, is uncertain.3 Survey data suggest that approximately a fourth to a third of the value of home equity loans and cash-outs finances personal consumption expenditures directly.44 Another fourth funds repayment of nonmortgage debt that had been used, in effect, as bridge financing, predominantly of personal consumption expenditures.5 Home mortgage debt is thus the final source of funding of some consumer outlays originally financed by extensions of credit card and other consumer debt.
These measures are meant to aid the Philippines’ recovery in the short term and propel its transition toward becoming an upper-middle income and high-income economy over the medium- to long term.