Income growing but so do debts — poll

Two in five Filipinos, or 42 percent, reported their income grew in the second quarter but their concern about financial stability is on the rise as a significant 44 percent of respondents fear they won’t be able to pay their bills and loans in full.

These were among the findings in the Consumer Pulse Study on shifting behaviors and attitudes about current and future household budgets, spending and debt, published by global information company TransUnion. Filipino households are financially cautious but hopeful for a more positive future based on the poll findings.

In the quarter, 42 percent of respondents reported an increase in income, slightly up from 41 percent in the same quarter last year. This optimism persists into the near future with most Filipinos (78 percent) also expecting an income increase in the next 12 months.

Strained sentiment

However, despite the positive income outlook, overall sentiment about household finances shows signs of financial strain.

A significant 44 percent 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 the same quarter last year, according to the outcome of the survey.

The concern over financial stability was also reflected in a four percentage point drop in respondents feeling optimistic about their household finances (80 percent) in the next 12 months.

Meanwhile, pessimism (8 percent) and neutrality (12 percent) edged up. The biggest concerns affecting household finances are inflation, job security and interest rates.

These concerns significantly influenced household spending. While only slightly more than one-fifth (22 percent) of the households surveyed increased discretionary spending such as dining out, travel and entertainment, almost half (47 percent) say they cut back in Q2 2024.

Looking forward, Filipinos have a more positive spending outlook. Even though more than half (52 percent) expect an increase in bills and loans, 39 percent 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 percent) and one-third expect more large purchases (29 percent) over the next three months.

“Although more Filipinos enjoyed increased household incomes in the second quarter 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,” Weihan Sun, principal of Research and Consulting for Asia Pacific at TransUnion, said.

“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.”