56% of Filipinos plan to apply for credit in 2023

A CREDIT scoring and reporting agency has revealed that Filipinos still consider credit as an option to cope with inflationary pressures.

According to the latest Consumer Pulse Survey conducted by TransUnion, nearly every respondent said they believe having access to credit and lending products is important in achieving financial goals, with 56 percent saying they were planning to apply for new credit or refinance existing credit within the next year.

The survey also revealed that more than half or 54 percent of Filipinos are planning to apply for new credit within the next year and 41 percent will apply for new credit to cope with the inflationary pressure.

Across generations, 63 percent of millennials and 60 percent of Gen Z said they plan to apply for new credit or refinance existing credit within next year.

Additionally, as Filipinos cite stagnant income growth, more consumers said they used a payday loan in the past 12 months (18 percent in the first quarter compared to 14 percent in the second quarter of 2022).

Pia Arellano, president and chief executive officer of TransUnion Philippines, said, “As more Filipinos’ financial literacy improves, TransUnion is optimistic that more people will have the knowledge and tools they need to make responsible financial decisions, particularly at a time when economic indicators reveal a stressed environment.”

In the same survey, TransUnion said Filipinos are building up their savings and are cutting their expenses in anticipation of a possible global recession.

Most Filipinos (76 percent) agreed the economy is either already in a recession or will enter one by the end of 2023, while almost half (44 percent) cited inflation for everyday goods as their biggest concern affecting their household finances for the next six months.

Meanwhile, more respondents (83 percent) believed that monitoring their credit is extremely or very important, up from 80 percent in the previous quarter.

A significant percentage, particularly among millennials (33 percent), said they conduct more than half of their transactions online.

Separately, a vast majority (89 percent) remained concerned about sharing their personal information. This may be connected to more consumers saying they were targeted by digital fraud in the last three months but did not become a victim of it.