Filipinos are focusing on building financial resilience through the current high-pressure economic environment: Even though a majority (80 percent) expect their income to increase in the next 12 months, more than half (51 percent) are saving more, and in excess of a third (34 percent) are accelerating their debt repayments.

This cautious attitude extends to how Filipinos are planning to calibrate their household budgets over the next three months.

While some foresee increased spending on bills and loans (43 percent) and retail purchases (35 percent), others intend to cut spending on non-essential items (48 percent), large purchases like cars and appliances (44 percent), and even digital services (21 percent).

This nuanced approach to managing finances reflects a population that is navigating economic uncertainties with caution.

These are among the findings of the Q4 Consumer Pulse Study into consumer behaviors and attitudes about current and future household budgets, spending and debt, published by TransUnion, a global information and insights company.

Important financial tool

Fewer Filipinos see credit as an important factor in achieving financial goals,

Fifty-eight percent of Filipinos consider it extremely or very important to use credit to achieve their financial goals, a decrease of six percentage points year-over-year, down from 64 percent. However, 63 percent of Gen Z (born 1995 – 2004) consumers believe that access to credit is important.

Survey findings also showed a noticeable drop in Filipinos' perception of having sufficient access to financial products.

Only 40 percent believed they have adequate access during the fourth quarter, down from 45 percent from a year ago.

Only 37 percent of Gen Z consumers are confident in their potential to access credit.

Despite the unmet demand, more than half (59 percent) of those that considered applying for new credit or refinancing existing credit, ultimately decided against it.

When asked about the reasons that led to their decision, the high cost of borrowing was the primary deterrent (39 percent), followed by  turning to an alternative funding source (32 percent) and income or employment status (29 percent). These challenges reveal opportunities for lenders to further enhance financial inclusion.

With fewer Filipinos recognizing the value of credit, survey findings also revealed a dip in the importance of credit monitoring.

Respondents who deemed the practice to be extremely important fell to 35 percent in final quarter, down from 44 percent a year ago.

Daily checks fell to 13 percent from 18 percent in the previous year, while 20 percent of respondents still do not monitor their credit reports at all, a slight increase from 18 percent in the last quarter of last year.

"Understanding one's credit health is an important step in financial management to safeguard a healthy financial future. It helps consumers stay on top of their creditworthiness and be ready for any immediate financing needs in an uncertain economic environment," Pia Arellano, president and CEO of TransUnion Philippines, said.

"As a provider of global information solutions, we know that these findings indicate a need to intensify consumer education efforts across the financial system about how access to credit information can affect or benefit an individual's financial health and enable them to make more informed financial decisions," she added,

Filipinos worry over data breach

Data from the final quarter showed Filipino experiences with digital fraud remain a leading concern.

A significant majority (64 percent) of survey respondents reported being targeted by fraudsters but did not fall victim to them, while 8 percent admitted to being defrauded.

In terms of fraudulent schemes, 50 percent of survey respondents were targeted by phishing attacks (when fraudulent emails, websites or social media platforms are used deceptively), followed by smishing (fraudulent text messages intended to trick recipients into divulging data) at 43 percent. Voice-call scams (vishing) and third-party seller scams on legitimate online retail platforms were also prevalent, indicating scammers' diverse array of tactics.

The prevalence of digital fraud is a possible reason that 90 percent of survey respondents express concern over sharing their personal information. This heightened vigilance reflects an increasing societal awareness of the risks associated with the digital world.

This overarching caution implies the need for better safeguards against digital fraud, especially with reports showing that local online scam victims lost over P155 million to various fraudulent schemes from January to August 2023.

"Data privacy safeguards personal identity and promotes trust in digital interactions in an increasingly data-driven world. With the need for increased cybersecurity and other safeguards against digital fraud, TransUnion Philippines continues to educate individuals and businesses alike about emerging fraud trends, providing a suite of identity proofing and fraud prevention solutions to help more people take better control of their online lives," according to Arellano.