A growing number of Filipinos have embraced credit products in their financial planning but remain wary of high interest payments given the sharp increase in consumer costs.
The latest Consumer Pulse Survey from US credit reporting firm TransUnion showed that 96 percent of survey respondents “see access to credit and lending products as an important way to achieve financial goals.”
The survey was carried out in the middle of July this year while the country’s inflation rate stood at 4.7 percent, which was above the government’s target range.
According to TransUnion, Filipinos (41 percent versus 35 percent in the previous quarter) were also more comfortable with having loans and credit cards.
“Credit can be a powerful tool that helps people improve their lives. It is a very encouraging sign to see more Filipinos growing comfortable with credit and using it to unlock better economic opportunities,” Pia Arellano, president and CEO of TransUnion Philippines, said in a statement.
Arellano said Filipinos were also open to the entry of digital banks and other financial technology firms as sources of credit.
According to the survey, 32 percent of respondents said they have existing credit cards or loans from a digital bank while 26 percent have tapped loans from a fintech firm.
However, 42 percent of respondents said they would choose institutions that offer the lowest interest rate for loans.
“While digital banks and fintech companies have emerged as viable options, these findings are indicative of a discerning consumer base that actively seeks credit products that offer the best terms and conditions,” TransUnion said.
Meanwhile, 52 percent of survey respondents reported better household finances during the third quarter—an improvement of three percentage points compared to the second quarter.
This as 44 percent of respondents said their income had increased during the same period. INQ