Filipinos Optimistic About Economy in 2022
TransUnion Consumer Pulse study reflects lessons learned from the global pandemic
Philippines, 07 April 2022 – Along with most of the world, the Philippines is emerging from the global pandemic with renewed optimism. According to the Q1 2022 Consumer Pulse Study conducted by information and insights company TransUnion (NYSE: TRU), more Filipinos expect their household income to increase in the next 12 months. This bodes well for the Philippine economy, which is projected by the National Economic and Development Authority (NEDA) to grow by up to 9% in 2022.
TransUnion surveyed 1,078 adults in the Philippines to measure changing consumer attitudes and behavior based on the dynamics of income, debt and identity theft. The company conducted the study from Feb. 8-23, 2022 with respondents from Gen Z (born 1995-2004), Millennials (born 1980-1994), Gen X (born 1965-1979), and Baby Boomers (born 1944-1964).
With 75% of those surveyed anticipating their household income will increase this year, the survey results reflect the lessons Filipinos learned following the COVID-19 pandemic. In particular, 51% of respondents said in the last three months they saved more in an emergency fund, 45% cut back on expenses for dining out, travel, and entertainment, and 28% added to or expanded digital services like wireless and internet. Over the next three months, consumers expect their spending on the following to increase: medical care/services (44%), retail shopping (37%), and retirement funds and investing (35%).
Credit is an important way to empower consumers and encourage them to participate actively in the economic recovery. In the next 12 months, most Filipinos (51%) expect that they will be able to pay at least one of their current bills and loans in full. However, the other 49% from the past quarter expect that they are unable to pay at least one of their current bills and loans in full, as there’s been no significant change in the ability to meet financial obligations. Lastly, 52% plan to apply for new personal loans. However, half of those surveyed (50%) abandoned plans to apply for new credit or refinance – with the top reasons being the high cost of new credit or refinancing (32%) or they found an alternative funding source (32%). So, though there is appetite for new credit applications, reforms need to be made to make follow-through a reality for more people.
Among consumers surveyed, it is apparent that all generations believe that it is important to have access to credit and lending products to achieve their financial goals. However, it is the younger Filipinos, Gen Z, who view credit as an essential part of their everyday lives. This is proven by the fact that from nearly half of the respondents who are planning to apply for credit in the next year (46%), half of them are younger generation Filipinos (50%), the Gen Z. Meanwhile, more than half (57%) of those with a credit score between 750 and 789 (considered a ‘very good’ score) said that they plan to apply for new credit.
Reflecting how the pandemic accelerated consumers going online, the survey found 57% of Filipinos said they conduct more than a quarter of their transactions online.
With so many transactions occurring online, fraudsters appear to have taken notice. Forty-five percent of respondents said they had been targeted by a digital fraud scheme in the last three months. Among those targeted, the most common digital fraud schemes that respondents said they encountered were: phishing (42%), money/gift card (38%), third-party seller scams on legitimate online retail websites (30%), fundraising (25%), identity theft (23%) and having their account taken over (22%).
While nearly half of all Filipinos said they believe their credit score would increase if businesses used information not on a standard credit report—e.g., rental payments and buy now, pay later loans—86% expressed considerable concerns about sharing personal information. The top reasons for this involve invasion of privacy (76%) and fear of identity theft (73%).
"From optimism about improved household incomes to anticipated increased spending in key areas, Filipinos are increasingly bullish about our recovery from the global pandemic," TransUnion Philippines president and chief executive officer Pia Arellano said.
"By conducting this study quarterly and making the results public, TransUnion Philippines harnesses information and insights to provide a comprehensive understanding of the changing attitudes and situation in the country. This can help better inform consumers, businesses, policy makers and other stakeholder decisions as the Philippines moves toward economic growth."
To discover more insights surrounding Filipino financial behavior, the latest TransUnion Consumer Pulse Study can be found here.
About TransUnion (NYSE:TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.