While more than two in five Filipinos (42%) say their income grew in the second quarter of 2024, concerns about financial stability were on the rise as a significant 44% of respondents fear they won’t be able to pay their bills and loans in full.
These were among the findings from the Q2 2024 Consumer Pulse Study on consumers’ shifting behaviors and attitudes about current and future household budgets, spending and debt, published by TransUnion, a global information and insights company.
Filipino households are financially cautious but hopeful for a more positive future
In Q2 2024, 42% of respondents reported an increase in income, slightly up from 41% in the same quarter last year. This optimism persists into the near future with most Filipinos (78%) also expecting an income increase in the next 12 months.
However, despite the positive income outlook, overall sentiment about household finances shows signs of financial strain. A significant 44% of respondents fear they won’t be able to pay their current bills and loans in full, which represents a three percentage point increase from thesame quarter last year. The concern over financial stability was also reflected in a four percentage point drop of respondents feeling optimistic about their household finances (80%) in the next 12 months. Meanwhile, pessimism (8%) and neutrality (12%) edged up. The biggestconcerns affecting household finances are inflation, job security and interest rates.
These concerns significantly influenced household spending. While only slightly more than one fifth (22%) of the households surveyed increased discretionary spending such as dining out, travel and entertainment, almost half (47%) say they cut back in Q2 2024.
Looking forward, Filipinos have a more positive spending outlook. Even though more than half (52%) expect an increase in bills and loans, 39% foresee increased retail shopping – reflecting notable jumps of seven and six percentage points respectively from the same quarter in 2023.
Moreover, nearly half of Filipinos also expect additional medical spending (43%) and one third expect more large purchases (29%) over next three months.
“Although more Filipinos enjoyed increased household incomes in Q2 2024 and expect this trend to persist in the next 12 months, the adjustments they made to household budgets suggest a cautious approach to financial management,” said Weihan Sun, Principal of Research and Consulting for Asia Pacific at TransUnion. “This seemingly contradicting sentiment suggests a vigilant yet hopeful outlook as Filipinos continue to acclimate to economic challenges,
navigating between necessary expenditures and financial prudence.”
Credit continues to be seen as important, but access remains an issue
In a time of economic uncertainties, the flexibility offered by credit is an important opportunity to support financial resilience. More Filipinos (63%) consider access to credit and lending products to be extremely or very important to achieve their financial goals – a jump of seven percentage
points from Q2 2023. This sentiment is particularly strong among younger generations, with 69% of Gen Z 1 and 66% of Millennials stressing its importance, compared to only 40% of Baby Boomers.
However, credit access remains an issue. Only 38% of respondents feel that they have sufficient access to credit and lending products, a slight drop from 39% during the same quarter in 2023. This decline is more pronounced among Gen Z consumers (33%) – falling from 38% in Q2 2023. Millennials are the only cohort that feels they have improved access (41%), up from 39% last year.
Gen Z consumers also share the lowest confidence in obtaining approval for the credit or lending products they need. The group shows a decrease in confidence to 51% believing that they will be approved for such products in Q2 2024, down from 53% in the same quarter lastyear. Millennials are the only group with increased confidence among all generations, growing significantly from 47% to 57% over the same period.
Aligning with the increasing importance given to credit access, the intention to apply for new credit or refinance existing credit is also rising, with 54% of consumers saying that they plan to do so in Q2 2024, up from 45% in Q2 2023. Gen Z (63%) and Millennials (60%) are leading the trend.
The types of credit sought vary, with personal loans being the most popular among all generations (53%). Notably, 37% of Gen Z plan to apply for a credit card, while 41% of Millennials show a stronger interest in buy now, pay later services. This data underscores evolving credit needs and preferences across different age groups, reflecting broader economic and technological trends.
Smishing on the rise as consumers keep abreast of fraudulent schemes
Although nearly one third (30%) of Filipinos are unaware of being targeted by any fraud schemes, fraud attempts remained a significant concern among Filipinos, with a consistent 60% indicating that they had been targeted by a fraud scheme but did not fall victim. Another 10% admitted to being targeted and becoming victims, slightly up from 9% the previous year.
In terms of fraud schemes, phishing (fraudulent emails, websites, social posts, QR codes meant to steal data) remains the most common with 51% of respondents in Q2 2024 reporting being targeted. However, smashing (fraudulent text messages meant to trick people into revealing data) saw an increase with 44% of respondents noting it in Q2 2024, up from 40% the previous year. Both money/gift card scams (36%) and third-party seller scams on legitimate online retail websites (31%) remain steady. These findings highlight the diverse and evolving nature of fraud schemes through various channels and methods.
“Although the number of respondents unaware of fraud and those victimized remains relatively stable, smishing attempts have increased, indicating that fraudsters are diversifying tactics to target unsuspecting consumers. With a slight increase in successful attempts to defraud consumers, robust consumer education efforts on fraud prevention must continue to further build consumer awareness. Consumers are also encouraged to take more protective measures
in closely monitoring their credit and finances to secure against the growing threats not only in the Philippines but across the world,” added Sun.
TransUnion’s Consumer Pulse Study surveyed 944 adult Filipino consumers from May 1 to 10, 2024.
This quarterly survey examines shifting consumer attitudes and behaviors based on the dynamics of income, debt, and identity theft.