More than half of Filipinos are saving more for emergency funds, even as majority are expecting income growth within the next year, according to a report released yesterday.
The TransUnion’s Consumer Pulse Study showed that 51 percent of Filipinos are saving more into their emergency funds, while 34 percent are paying debts faster in the face of economic pressures.
This, even as 80 percent expect their income to increase in the next 12 months.
According to the report, this cautious attitude extends to how Filipinos are planning to calibrate their household budgets over the next three months.
While some foresee increased spending on bills and loans (43 percent) and retail purchases (35 percent), others intend to cut spending on non-essential items (48 percent), large purchases like cars and appliances (44 percent) and even digital services (21 percent).
This approach to managing finances reflects a population that is navigating economic uncertainties with caution, TransUnion said.
The study surveyed 907 adult Filipino consumers from September 27 to October 10, 2023.
It examined shifting consumer attitudes and behaviors based on the dynamics of income, debt and identity theft, with respondents ranging from Gen Z (born 1995-2004), Millennials (born 1980-1994), Gen X (born 1965-1979) and Baby Boomers (born 1944-1964).
Meanwhile, the study showed that more than half or 59 percent of those that considered applying for new credit or refinancing existing credit, ultimately decided against it.
When asked about the reasons that led to their decision, the high cost of borrowing was the primary deterrent (39 percent), followed by turning to an alternative funding source (32 percent) and income or employment status (29 percent).
The report said these challenges reveal opportunities for lenders to further enhance financial inclusion.
Survey findings also revealed a dip in the importance of credit monitoring.
Respondents who deemed the practice to be extremely important fell to 35 percent in the fourth quarter of 2023, down from 44 percent in same period in 2022.
“Understanding one’s credit health is an important step in financial management to safeguard a healthy financial future. It helps consumers stay on top of their creditworthiness and be ready for any immediate financing needs in an uncertain economic environment,” said Pia Arellano, president and chief executive officer of TransUnion Philippines.
“As a provider of global information solutions, we know that these findings indicate a need to intensify consumer education efforts across the financial system about how access to credit information can affect or benefit an individual’s financial health and enable them to make more informed financial decisions,” she added.
