Credit solutions company warns public, cites importance of being money ready
With the anticipated spike in Christmas spending, credit solutions firm The Golden Legacy Financing Corporation (TGLFC) emphasized on the importance of being money-ready and advised the public to be responsible in their holiday spending. Not to resort to high-risk loans to finance their holiday splurges.
The Golden Legacy Financing Corporation Chief Marketing Officer Jonathan Cuyegkeng said that with the Philippines having the longest Christmas celebration globally, strong consumer spending has been the norm during holiday season for Filipinos who have a penchant for gift-giving and holding multiple Christmas celebrations. The “revenge spending” that has come after the pandemic has added to mounting expenditures among Filipinos.
A November 2024 Nielsen study showed that 83% of Filipinos prioritize spending on gifts for family members during the Christmas season. This is consistent with the 2021 Statista report that during the holiday season, the Philippines experienced a 40% surge in e-commerce transactions, showcasing the growing reliance on digital platforms. In their commissioned survey, TikTok revealed that they have become the central hub for holiday celebrations with a significant 77% of users using TikTok for their Christmas shopping needs.
“For lower-income families, the Christmas festivities bring a difficult and emotional toll. Because they want to provide a memorable celebration for their families but they struggle with limitations on their resources. There are researches that show that many families from the lower income household run to informal lenders with exorbitant interest rates to fund their Christmas celebrations bringing them deeper in debt after the holidays,” Cuyegkeng said.
Cuyegkeng added that aside from the increase in consumer spending due to the Christmas season, the revenge spending that has come after the pandemic continues to hamper efforts of Filipinos to be more financially prepared for emergency expenses.
In fact, the July 2024 analysis of FitchSolutions company BMI painted a positive outlook for consumer spending among Filipinos that is projected to continue until 2025 as inflation remains manageable despite a spike. The risks to this outlook, it said, would be prolonged inflation, lower remittances and weakening of the domestic economy that adversely affects the purchasing power of the household.
A huge segment of the population, however, is said to be growing pessimistic due to inflation that that jacks up the prices of basic commodities, thus, preventing them from saving and adversely affecting their investment decisions. These uncertainties hit heaviest on the most vulnerable members of the society.
“There is also a 2022 Consumer Pulse Study of TransUnion that showed that while more Filipinos now choose to save more money into emergency funds, there is still a huge 46% who are unable to pay at least one of their current bills and credit in full. In order to pay off these obligations, they use up their emergency savings, leaving them with no resources when unexpected expenses strike. With the expected Christmas expenses, maintaining stable finances becomes even more challenging,” Cuyegkeng said.
Cuyegkeng advised the public that turning to high-risk or non-SEC-registered loan providers to fund Christmas celebrations is highly discouraged as it of leads to unclear terms and conditions that can trap individuals in a serious cycle of debt.
He explained, however, that lending is not always bad provided that it is used for the right intentions and not for splurges.
A high 96% of Filipinos believe in the importance of having access to credit and lending products for them to achieve their financial goals, the Consumer Pulse Study also showed.
“There used to be a stigma when you hear the word loans but that is not always the case. There are easy and accessible credit solutions that are financially empowering which could help and enable people to move forward with their goals,” Cuyegkeng said.
Credit solutions, he adds, not only help people to be financially ready when emergencies or unexpected expenses strike but these could also help them build their dreams like having capitalization to start their businesses, pursue further studies, and quickly address costs on medical and other emergencies.
However, Cuyegkeng pointed out that most borrowers are disappointed with the length of time waiting for decisions on their credit applications while an even bigger number are automatically rejected because of inaccurate assessment on their credit risk. He explained that most lending companies have an age cap with their loan products, thus depriving the senior borrowers from having access to credit. Similarly, a huge chunk of lending companies exclude workers from so-called “high risk industries” from borrowing.
“Thus, these borrowers run to informal lenders with onerous interest rates that further jeopardize their financial position,” he said.
“This is the reason why The Golden Legacy focuses on creating credit solution products to help and address this huge problem among borrowers at the same time guiding them to become responsible borrowers. The Golden Legacy was built anchored on the commitment to support Filipinos who struggle with managing day-to-day finances and would need immediate financial assistance that is accessible, flexible, and are designed to help them navigate unforeseen expenses and secure their financial well-being,” Cuyegkeng explained.
With TGLFC’s Credit Model, customers who gets to pay at least half of their loan amount, can easily qualify for a re-loan, offering a more credit-like experience compared to traditional loans.
He adds that the impact of TGLFC’s credit solutions extend beyond immediate financial relief but contributes to a broader sense of empowerment and confidence among its customers. TGLFC’s database of borrowers continues to grow, trusting on the reputation of the company which is registered with the Securities and Exchange Commission (SEC).
“Studies have shown that most individuals feel more in control of their finances when they have access to flexible borrowing options. This sense of financial empowerment not only reduces stress and anxiety but also fosters a positive attitude towards money management and planning for the future. We provide them with a sense of being financially ready through TGLFC,” Cuyegkeng said.
A huge chunk of TGLFC borrowers are AFP and SSS pensioners who do not have easy access to traditional lending platforms because of age restrictions.
“At TGLFC, we honor and celebrate these pensioners and empower them to celebrate every moment through our easy and accessible credit solution products. We want our AFP pensioners to be able to live their legacy and stay ready when unforeseen expenses hit them. For SSS pensioners, TGLFC helps them to embrace their sunset years by still being financially empowered,” Cuyegkeng said.
TGLFC also provides financial solution products for employees so that they will be able to hurdle unexpected finances with financial readiness. TGLFC also partners with companies to provide their employees with legitimate salary loan products, allowing them to be financially-ready in times of emergency or when they need extra funds for their family.
Cuyegkeng added that they take pride in being the trusted financial partners of many pensioners and employees for many years. TGLFC currently operates nationwide through its branches in Manila, Dagupan, Tarlac, Lipa, Naga, Iloilo and Cebu to service their customers. With the continued demand for their services, TGLFC hopes to expand to other locations soon.
The Golden Legacy Financing Corporation has been providing financial solutions for more than three decades, primarily catering to pensioners but has since expanded to employees who are not normally given access to credit.
ADVT.
This article is brought to you by The Golden Legacy Financing Corporation.
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