Despite the negative impact on their incomes of the pandemic, Filipinos remain hopeful their finances will recover.
Meanwhile, an insurer has seen a behavioral shift in its clients as the ongoing health crisis has increased their awareness and interest on protection products.
TransUnion’s ConsumerPulse survey conducted in the second quarter of the year showed two-thirds (66 percent) of Philippine consumers reported their household incomes were negatively impacted by the effects of the new coronavirus disease pandemic, up one percentage point from the previous quarter.
The impact was more prominent for middle-aged respondents — 69 percent of Gen Xers (born 1965 to 1979) and 68 percent of Millennials (born 1980 to 1994).
The survey showed the outlook is still uncertain, with 54 percent of respondents expecting their household income to be impacted in the future — an increase of five percentage points from the previous quarter. The majority of consumers (85 percent) continued to be concerned about being able to pay their bills and loans, with nearly half (49 percent) anticipating they’ll be unable to pay at least one of their current bills and loans in full.
They opt to use money from savings, to refinance/renegotiate payments/rates and take out a personal loan to meet such obligations.
Pia Arellano, TransUnion Philippines president and chief executive officer said despite this, many respondents are still hopeful that their finances will recover which is a good sign of their economic outlook.
Among all the respondents, 74 percent expressed positive feelings about their financial outlook, with 61 percent classifying their financial situation as hopeful — where their household income has decreased, but they think their finances will recover.
Only 8 percent said their financial situation was either stable or thriving — where their household income has not decreased and their finances in 2021 are as planned or better.
Meanwhile, 5 percent said they were resilient as their household income has decreased during the pandemic (currently or in the past) but their finances have fully recovered.
Philippine consumers indicated plans to increase or at least retain their household spending over the next three months. Seventy-two percent said they will increase or at least retain their spending on digital services and 61 percent on retail (clothing, electronics, etc.).
However, everyday living priorities are still in order as 77 percent said they will also increase or at least retain spending on medical care/services, 74 percent on bills and loans, and 62 percent on retirement funds/investing.
Meanwhile in a virtual briefing, Leo Tan, AIA Philam Life chief marketing officer, said the company has observed heightened awareness for protection products: medical, critical illness, even life, insurance products that provide something for the family in case someone passes away.
Tan said while there are still products that focus on long-term savings, which are still selling quite well, the company has observed product shifts.
Tan said pandemic-related claims from March last year to July 2021 has reached around P375 million. The amount includes releases by the company, its bancassurance partnership with the Bank of the Philippine Islands (BPI), BPI-Philam, and with Citi.
Tan said these releases cover hospitalization and death claims. Irma Isip and Angela Celis
