BUSINESS
Credit-savvy Pinoys still rising — TransUnion
Demand for credit increased significantly by 89 percent in the first half of the current year
US-based credit reporting agency TransUnion believes that Filipinos who borrow from banks and other financial institutions will continue to soar in the coming years, amid the headwinds hitting the economy.
Citing data from TransUnion, it said that the demand for credit increased significantly by 89 percent in the first half of the current year.
"We are not seeing the uncertainty. We are seeing market recovery as the demand has increased, so much so that it is even higher than pre-pandemic. The lenders are utilizing the data and insights they get from TransUnion to support the growth. We are seeing this further improving in the coming years," Pia Arellano, president, and CEO of TransUnion Philippines, said in a press briefing.
In April 2023, data and analytics company, GlobalData, said card payments in the Philippines are set to grow by 10.1 percent this year to reach P2.5 trillion in 2023.
GlobalData's Payment Cards Analytics reveal that the card payments market in the Philippines registered a growth of 12.3 percent in 2022 to reach a value of P2.3 trillion, supported by the economic rebound and rise in post-pandemic consumer spending.
Financial inclusion supported
Meanwhile, Arellano said although Filipinos without a credit history are not at a disadvantage, it is still best for them to have one, or citizens should at least try getting small credits, just like loans offered by virtual wallets GCash and Maya.
"Getting these soft loans may make citizens to be financially included and earn credit rating, and eventually, credit history. These will serve as their training grounds. At TransUnion, what we really advocate for is financial inclusion," she said.
Credit stigma
She said Filipinos continue to have a very negative perception of credit, "as it is synonymous with utang.
"And when you say utang, it is also tantamount to financial irresponsibility. That is the general perception of the public. So, what we want to do is to change that perception. Ultimately, credit is not bad, if you are responsible with the credit that has been given to you.
Credit can open a lot of doors—it can improve your lifestyle; it can even allow you to set up your own business and increase consumption which increases jobs and productivity. Credit indeed triggers a virtual cycle in the economy," Arellano explained.
According to TransUnion the Q3 Consumer Pulse Study, more Filipinos' household finances have improved in the last quarter.