Almost four in every five Filipinos anticipate their income to grow over the next year, but almost half of those anticipate further financial strain in the coming months.
These were among the findings from the Q4 2024 Consumer Pulse Study on Filipino consumers’ shifting behaviors and attitudes to current and future household budgets, spending and debt, published by global information and insights company TransUnion.
“In the face of sustained financial pressure, consumers in the Philippines have increasingly adjusted spending and saving behaviors. While more are shifting away from long-term savings, reliance on credit rose as almost one in five (17 percent) increased credit usage in Q4 during the holiday season,” said Weihan Sun, Principal of Research and Consulting for Asia Pacific at TransUnion.
In Q4 2024, nuanced shifts were observed in both household financial health and consumer outlook. A total of 84 percent of households experienced either income growth in the past three months or maintained their income levels, highlighting stable income trends.
However, debt repayment remained a pressing challenge as over two in every five Filipinos reported difficulty paying bills and loans in full. This consistent trend underscores a sustained financial strain across many of the population.
Most consumers (80 percent) viewed inflation for everyday goods as the most pressing concern affecting their household finances in the next six months, followed by worries over job security (59 percent) and interest rates (41 percent).
These findings underscored the caution of Filipino consumers regarding financial resilience – possibly suggesting broader implications for household spending and debt management in the coming year.
“These behaviors reflect a tendency to prioritize immediate financial flexibility over long-term security as households attempt to bridge short-term financial needs in a high-cost environment. This might elevate default risks in certain debt categories which lenders should be cautious of. Additionally, these financial behaviors highlight the need for further credit education among a population where most consumers are relatively new to credit,” Sun said.
The study also showed more Filipinos are recognizing the importance of credit. Over three in every five Filipinos (64 percent) said that access to credit is highly important to achieving their financial goals – up from 58 percent last year. This trend was led by Gen Z Filipinos with 68 percent seeing credit access as crucial.
However, Filipinos believe that access to credit remained limited as only 42 percent of consumers felt adequately served and one-quarter (25 percent) of all respondents reported insufficient access. Gen Z (34 percent) felt the most underserved.
Despite this, overall interest in new credit was strong with 53 percent planning applications for new credit or refinancing existing credit in the next year, largely for personal loans, buy now, pay later and credit cards. These findings signal opportunities for lenders to meet the demand for accessible products especially among younger Filipinos eager to leverage credit for better financial flexibility.
Alongside holding more favorable perceptions about credit, Filipinos are monitoring their credit reports more frequently as well. More than seven in ten (71 percent) now checks their credit report at least once a month, a slight increase from last year’s 67 percent.
A significant 74 percent also viewed credit monitoring as highly important. This shift towards proactive monitoring suggests consumers are becoming more mindful of their credit health and responsibilities.
However, despite this positivity, 16 percent of consumers did not monitor their credit at all, which indicates that further education is needed in a rapidly growing credit market.
Fraud remains a significant concern of Filipino consumers, and more than half of Filipinos (55 percent) reported encountering fraud attempts without falling victim.
