UnaCash, an in-app and in-store installment solutions provider, expects the growth of point-of-sale loans (POS) in the Philippines to reach a value of P1.67 trillion by 2028.
This is validated by its recent survey which indicated that 91 percent of consumers in the local market are inclined to using this financing option.
As consumer behavior continues to evolve, the local market witnessed a substantial transformation in the spending habits of Filipino consumers. Household spending consists of approximately 72.8 percent of the country’s economic activity, according to data from the Bangko Sentral ng Pilipinas (BSP) and the Philippines Statistics Authority (PSA).
Consequently, consumer loans have a 16.4 percent increase from P1.968 trillion in March 2022 and P2.291 trillion in the same month in 2023, the most common purpose of securing extra credit was to purchase basic goods and services (52 percent), followed by business start-up or expansion (24 percent), and education (12 percent).
Additional 3 percent of personal consumption loans by households were taken out to purchase consumer goods. Overall, 55 percent of personal consumption is taken by local households through POS purchases to address the financial gap that is needed to maintain their way of living.
To gain better insights into the consumer behavior in the Philippines, UnaCash surveyed 137 respondents from its online community on the attitude of Filipino consumers to POS Financing. The financing option has gained significant traction in the local market, 70 percent of online shoppers stated the utilization of at least one POS financing solution.
Notably, 33 percent of offline shoppers and 22 percent of online shoppers cited the availability of POS financing as a crucial factor influencing their choice to shop either in physical or online stores. Several factors emerged as key drivers for choosing between online and offline shopping.
For in-store shoppers, the following reasons were highlighted; desire to physically inspect the products (41 percent), personalized customer experience (40 percent), and avoid shipping delays (34 percent). In contrast, online consumers prioritized the convenience and accessibility (50 percent) that e-commerce platforms provide. This is followed by the wide array of choices for purchases (40 percent), payment flexibility which includes POS-financing options, (37 percent), and the convenience of the door-to-door delivery of services (37 percent).
