The continued hike in the prices of goods and services set back consumer spending in the third quarter of 2005. The upsurge in remittances of the country’s OFWs stirred up consumer spending during the period but at a slower pace, with PCE growing at 4.8 percent from 5.5 percent in the previous year.

Cutbacks in expenditure were noted in Beverages, which declined by 2.6 percent from a growth of 4.1 percent; Clothing and footwear, down by 1.1 percent from a growth of 3.1 percent; and Household furnishings, down by 3.3 percent from a growth of 2.7 percent.

Other expenditure items posted decelerated growths as a result of higher prices: Food expenditure, which comprises the bulk of total PCE, slowed down to 5.2 percent from 5.5 percent in the previous year; Fuel, light and water was reduced to 0.3 percent from 2.2 percent; Transportation/Communication grew by 12.9 percent relative to 13.8 percent; and Miscellaneous expenditures by 5.0 percent from 5.9 percent.