MANILA, Philippines — Despite the recent wage hike in the Philippines where 42 percent of Filipinos reported an increased income, over 44 percent of Filipinos are still worried about their household finances, global insights firm TransUnion said.
This figure translates to four in 10 Filipinos in the country.
The TransUnion survey of 944 adult Filipinos conducted from May 1 to May 10 found that 44 percent of respondents were worried about not being able to pay one of their bills or debts, up from 41 percent last year.
“While more Filipinos have enjoyed increased household incomes and expect this trend to continue, their budgeting adjustments suggest a cautious approach to financial management,” said Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion.
The study found that 42 percent of respondents saw their income increase in the second quarter, up from 41 percent last year. Looking ahead, 78 percent of Filipinos expect their income to rise in the next year.
Sun also said that this mixed sentiment shows that while Filipinos are cautious about economic challenges, they remain hopeful as they manage their spending and finances carefully.
Overall, there are signs of financial pressure for households. About 44 percent of respondents worry they might not fully pay their bills and loans, up from 41 percent last year, the data showed.
As a result, TransUnion said that credit is becoming more important to consumers. The survey found that 54 percent of households planned to apply for a new loan or refinance existing credit in the second quarter, up from 45 percent last year.
More Filipinos (63 percent) think that having access to credit and loans is very important for reaching their financial goals, up from 56 percent last year. This belief is strongest among younger people, with 69 percent of Gen Z and 66 percent of Millennials valuing it highly, compared to only 40 percent of Baby Boomers, according to the report.
In a separate survey, as of March 2024, the Credit Card Association of the Philippines (CCAP) reported over 13.9 million active credit cards in the country, according to their first-quarter survey.
The latest data from the Bangko Sentral ng Pilipinas (BSP) revealed that consumer credit from major banks reached P1.4 trillion, making up 11.6 percent of total loans in June. Household lending has doubled compared to pre-pandemic levels.
Ivan Tan from S&P Global Ratings noted on Wednesday that Philippine banks have a “risk-on” attitude, which needs close monitoring due to the high number of bad consumer loans.
“We have been observing a risk-on behavior where the Philippine banks are maintaining the large corporate loans, but growing almost twice as fast in the higher-yielding and higher-risk consumer segment,” Tan said in a webinar.
