The Philippine credit market is poised for expansion in the coming quarters as robust economic growth and easing inflation create more favorable borrowing conditions, according to TransUnion Philippines.

The economy grew 5.5 percent year-on-year in the second quarter of 2025, lifted by household consumption, a rebound in agriculture, and slowing price increases. Inflation dropped to 1.4 percent in June, while the Bangko Sentral ng Pilipinas (BSP) cut policy rates to 5.25 percent by the end of the quarter and further reduced them to 5 percent in August.

Lower rates and a more stable economic backdrop are expected to support both lenders and consumers in tapping credit, TransUnion said.

CPI data

Data from the firm’s Credit Perception Index (CPI) showed sentiment toward credit remained steady with a score of 73 out of 100, only slightly lower than last year.

Trust in credit products improved, with more Filipinos expressing intent to borrow from traditional banks, virtual banks, and credit cards.

Still, hesitations persist, with high borrowing costs and fraud concerns cited as key deterrents.

Growing willingness to embrace credit

“We are seeing a growing willingness among Filipinos to embrace credit as a tool for progress, but they want to know they can do so with confidence,” said Peter Faulhaber, president and CEO of TransUnion Philippines.

“By ensuring that borrowing is both responsible and empowering, we can help turn openness into meaningful action that benefits households and the economy alike.”

Formal credit demand

Formal credit demand rose sharply in the first half of 2025, with credit inquiries up 49 percent year-on-year, driven by personal loans and credit cards.

Despite increased borrowing, delinquency rates have remained stable, indicating that most consumers are managing their debt responsibly.

Faulhaber said lenders now face an opportunity to expand portfolios, but warned that trust, education, and tailored engagement remain critical in translating consumer openness into sustained borrowing.

The company will present deeper insights into consumer credit behavior at its inaugural 2025 Philippines Financial Services Summit later this month.