Filipinos tend to favor cash (96) and e-wallets (93 percent) over credit products (66 percent) and credit cards (59 percent) in their purchases, results of the inaugural TransUnion Credit Perception Index (CPI) study.
The CPI for the Philippines – which measures how Filipinos see credit across multiple dimensions, including their current attitudes, knowledge, trust, favorability, and future receptivity – is 65 out of 100.
This indicates credit card penetration rates remain low despite longstanding presence in the Philippines, with only 25 percent of respondents owning a credit card.
This is in sharp contrast to the 85 percent who have an e-wallet, which have only become available recently in comparison to credit cards in the country.
“The fact that credit cards are a more widely held product in many markets around the world yet remain stagnant in the Philippines in terms of penetration, may indicate a prevailing conservative attitude surrounding credit among the Filipino public,” TransUnion said.
The study finds most Filipinos surveyed (69 percent) have a general understanding of the concept of credit but they tend to be most knowledgeable about credit card installment payments (83 percent), followed by personal loans (77 percent), credit cards (71 percent), and Buy Now Pay Later (69 percent). In contrast, they are far less familiar with mortgages (58 percent), auto loans (54 percent), and overdraft protection (25 percent).
There is still a high level of reliance on informal credit rather than on formal credit systems with 72 percent of Filipinos turning to family and friends to borrow money, and the percentage goes even higher to reach 78 percent among the unbanked population.
Most Filipinos learn about credit products from their family and friends (67 percent), followed by banks and financial institutions (61 percent) and financial advisors (42 percent).
