MANILA, Philippines - "New wealth builders" (NWBs) are seen as the fastest growing segment of the global economy, a report by Economist Intelligence Unit (EIU) showed.
The EIU report, sponsored by Citi, cited the emergence of a new wealth class called new wealth builders in 32 countries around the world.
NWBs are defined as households with financial assets of $100,000 (around P4.5 million) to $2 million (around P90 million). They are typically self-made professionals, corporate executives and entrepreneurs.
The report stated that NWBs currently have an estimated $88 trillion in global assets. This segment is expected to grow at a compound annual growth rate (CAGR) of 7.1 percent, to hit $145 trillion by 2020.
NWBs have grown faster than any other wealth sector, including high net worth or mass market segments.
"As self-made professionals and entrepreneurs, New Wealth Builders defy stereotypes. They make progress through hard work and philanthropy; they embody the positive aspects of globalization and travel regularly,” said Erica Klein, editorial director at The Economist Group.
Klein noted NWBs' wealth is largely self-made, with nearly eight in 10 NWBs acquiring their wealth in the last 10 years.
"NWBs represent an increasingly important phenomenon in the world economy driving growth in savings and economic activity more generally. They are typically self-made, socially conscious and sharply focused on growth,” said Jonathan Larsen, Citi global head of retail banking and head of consumer banking in Asia Pacific.
More Pinoy NWBs
The EIU report cited the Philippines as one of five countries in Asia-Pacific that will experience high growth rates in NWB households from 2014 to 2020.
"As Asian consumers spend, large populations spur regional economic growth. At present, the number of NWB households in emerging markets is overshadowed by the NWB cohort in developed markets (97 million versus 171 million, respectively). But after 2020, emerging market NWBs will outnumber their peers in mature markets," the report stated.
The number of NWB households in India is expected to jump 47.4 percent, followed by Indonesia with 41.2 percent, Vietnam with 34.9 percent and Thailand with 23.6 percent.
EIU expects the number of NWB households in the Philippines to jump 22.8 percent in 2014 through 2020.
The report cited the Philippines as a particular area of potential growth due to rapidly expanding affluent and emerging affluent customer segments, relatively low consumer leverage and accelerating urbanization.
"Starting 2015, the Philippines will have an ideal demographic window. Coupled with being a largely consumption-led economy, which the report acknowledged as a key driver of growth, we are not surprised to see the country rank among the top five to experience accelerated growth for the New Wealth Builders segment,” said Citi Philippines CEO Batara Sianturi.
The EIU global survey, which was carried out in February 2014, reached 1,552 individuals who meet NWB criteria in 30 countries across 18 industries.