Filipinos Brace for Further Financial Strain While Staying Optimistic About Household Income
- Despite 79% of Filipinos being optimistic about their income growth next year, 42% expect difficulty in paying their bills and loans in full, indicating a cautious financial outlook
- Over three in every five Filipinos (64%) see credit as important in achieving financial goals, but one-quarter (25%) of all respondents report insufficient access to credit products, highlighting opportunities for lenders to meet evolving demand
- Knowledge gaps exist about cybersecurity and appropriate responses to threats, with 55% of those inactive on cybersecurity concerns expressing uncertainty about necessary actions
Manila, Philippines, December 10, 2024 – While almost four in every five Filipinos (79%) anticipate their income to grow over the next year, rising bill and loan payment expectations (49%, up from 43% for the same time last year) suggest that many households anticipate further financial strain in the coming months.
These were among 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 (NYSE: TRU).
Sustained financial strain affected future household spending and debt management
In Q4 2024, nuanced shifts were observed in both household financial health and consumer outlook. A total of 84% of households experienced either income growth (44%) in the past three months or maintained their income levels (40%), highlighting stable income trends.
However, debt repayment remained a pressing challenge as over two in every five Filipinos (42%) reported difficulty paying bills and loans in full, maintaining a stable figure from Q4 2023 at 43%. This consistent trend underscores a sustained financial strain across many of the population.
Most consumers (80%) 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%) and interest rates (41%). 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.
“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%) increased credit usage in Q4 during the holiday season,” said Weihan Sun, Principal of Research and Consulting for Asia Pacific at TransUnion. “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.”
Credit is more favorably viewed among younger generations despite limited access
More Filipinos are recognizing the importance of credit. Over three in every five Filipinos (64%) said that access to credit is highly important to achieving their financial goals – up from 58% last year. This trend was led by Gen Z Filipinos with 68% seeing credit access as crucial.
However, Filipinos believe that access to credit remained limited as only 42% of consumers felt adequately served and one-quarter (25%) of all respondents reported insufficient access. Gen Z (34%) felt the most underserved. Despite this, overall interest in new credit was strong with 53% 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%) now checks their credit report at least once a month, a slight increase from last year’s 67%. A significant 74% 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% of consumers did not monitor their credit at all, which indicates that further education is needed in a rapidly growing credit market.
Growing knowledge gaps seen in Filipinos’ inactivity to respond to cybersecurity threats
Fraud remains a significant concern of Filipino consumers, and more than half of Filipinos (55%) reported encountering fraud attempts without falling victim. Meanwhile, those unaware of fraud attempts increased from 28% last year to 35% in Q4 2024, while the percentage of consumers who fell victim grew slightly from 8% last year to 10%. These findings highlight a need for enhanced protective measures, as phishing (45%), smishing (41%) and gift card scams (36%) were the most frequent fraud schemes experienced among those Filipino consumers who reported being targeted.
Growing cybersecurity challenges are also evident as 35% of Filipinos reported being notified that their personal data was exposed in a data breach in Q4 2024. While more than one in three (35%) experienced data breach incidents this quarter, 12% of the consumers reported that they have taken no action in the last 60 days due to cybersecurity concerns. Among them, 55% said they were unsure of what steps to take to better protect themselves from these threats. This reveals an ongoing knowledge gap that needs to be addressed urgently.
“The threat of digital fraud continues to impact the online experiences of Filipino consumers. As these threats evolve, empowering consumers through clear guidance and accessible security tools could help alleviate their uncertainty and prevent breaches more effectively. By working collectively to foster a culture of awareness and provide necessary resources, we can build a safer digital environment for all Filipino consumers and businesses,” added Sun.
TransUnion’s Consumer Pulse Study surveyed 938 adult Filipino consumers from September 25 to October 17, 2024. This quarterly survey examines shifting consumer attitudes and behaviors based on the dynamics of income, debt, and identity theft, with respondents ranging from Gen Z, 18–26 years old; Millennials, 27–42 years old; Gen X, 43–58 years old; and Baby Boomers, age 59 and above.
For more information, please view the full report of the TransUnion Q4 2024 Consumer Pulse Study.
