By Monsi A. Serrano
By all indications, the Philippine economy is moving firmly onto a recovery path: Inflation has eased, consumer spending is rising, and investor confidence is rebounding after the previous administration’s China-centric policies and corruption scandals dampened foreign interest.
In its Q1 2025 Consumer Pulse Study, TransUnion found that headline inflation slipped to 1.3 percent in May—the lowest since 2019—thereby “restoring the real purchasing power of Filipino consumers,” the firm noted.
One clear sign of resurgent spending is the popularity of buy now, pay later (BNPL) plans: 65 percent of Filipinos surveyed said they have used BNPL to purchase items they want or need.
“Lower inflation is creating a more supportive environment for consumer credit growth. We expect to see stronger repayment capacity among existing borrowers and higher demand among new-to-credit consumers, particularly in the small-ticket and revolving-credit segments,” said Peter Faulhaber, president and CEO of TransUnion Philippines.
Retail sector poised for faster expansion
Retail already accounts for roughly 20 percent of the economy—including both e-commerce and brick-and-mortar outlets—and analysts expect the sector to accelerate as credit becomes more accessible.
When lenders reach previously unserved or underserved borrowers, “this will drive up the micro-economy in retail and, we hope, attract more foreign investors to expand in the Philippines,” Faulhaber added.
Government data back the optimism. According to the Philippine Statistics Authority, gross domestic product grew 5.4 percent year-on-year (YoY) in the first quarter, buoyed by wholesale and retail trade, financial services, and manufacturing. The wholesale-and-retail segment alone expanded 6.4 percent YoY.
TransUnion’s survey shows that 37 percent of Filipinos plan to increase retail purchases such as clothing, electronics, and durable goods over the next three months, while 29 percent expect to boost discretionary spending on dining out, travel, and entertainment.
Credit outlook brightens
As real incomes rise, TransUnion projects marginal improvements in early-stage delinquencies over the next two quarters. The firm urges lenders to deploy data-driven risk models so they can safely widen credit access.
“At TransUnion, we’re deeply committed to fostering a more inclusive and resilient credit ecosystem,” Faulhaber said. “By equipping lenders with advanced analytics and empowering consumers—especially those new to credit—we help ensure that more Filipinos can access the financial tools they need to thrive.”
