Filipino consumers tighten their belts amid inflation, job concerns

FILIPINO CONSUMERS are growing more cautious about their spending and finances due to inflation and job security concerns, even as the majority remain optimistic about their incomes, a study by TransUnion showed.

TransUnion’s Q2 2025 Consumer Pulse Study showed that 44% of Filipino respondents said�� they may struggle to fully pay at least one of their current bills and loans, with 47% also reducing their discretionary spending.

This comes even as 73% of consumers said they expect their incomes to increase over the next year.

“Positive income projections notwithstanding, Filipinos indicated clear financial pressure,” TransUnion said.

“Filipino households are approaching their finances with cautious optimism. While they’re aware of ongoing challenges like inflation and rising costs, many remain hopeful about their financial future. This mindset is reflected in their actions — cutting back on nonessential spending, saving consistently, and staying on top of debt. Our latest Consumer Pulse Study indicates that consumers are not just adapting to current conditions, but are also making thoughtful decisions to secure long-term financial well-being,” said Weihan Sun, principal of research and consulting for Asia-Pacific at TransUnion.

The study showed that Filipino consumers’ financial health was mostly steady in the period, with 41% of respondents saying their incomes rose over the past three months, while 17% said their incomes dropped.

However, 77% of respondents said they were optimistic about their household finances over the next 12 months, three percentage points lower than the year-ago level.

“Sources of caution were very familiar: worries about inflation predominated as 83% of respondents listed rising prices for daily commodities as their top concern — with job security (59%) coming in second followed by interest rates (40%),” TransUnion said.

This cautiousness was reflected in consumers’ spending patterns, it noted. The study showed that 47% cut back their discretionary expenses — including dining out, travel, and entertainment — in the last three months, with 24% also canceling or reducing their digital services and 23% stopping their subscriptions or memberships.

Still, consumers were “proactive” about boosting their safety nets, as 45% increased their emergency savings, 33% paid down their debt faster, and 25% saved more for retirement.

“Looking ahead, household budgets seem to be in a wary state. Over half (49%) of consumers expected their debt commitments and expenses to rise in the next three months, even while 42% of consumers intended to limit discretionary spending and 43% intended to scale down major purchases,” TransUnion said.

“These forecasts suggest even if most consumers were optimistic about their financial status, they were nevertheless cautious of economic headwinds (especially inflation) and were adjusting expenditures. The data indicates a financially active consumer base moving with the times to balance spending management with selective investment in their financial well-being.”

CREDIT ACCESS
The study also showed that 58% Filipinos see access to credit as a “major enabler” of their financial goals.

“Nearly half (44%) believe they have sufficient access to credit, up from 38% a year ago. Millennials remain the most confident (47%), while Baby Boomers showed a significant rise from 28% to 42%,” TransUnion said.

“This growing confidence is also reflected in borrowing intentions. Demand for credit remains strong — especially among Gen Z (58%) and Millennials (52%) who plan to apply for or refinance credit in the next 12 months. Among those who intended to borrow, personal loans were the most sought after product (45%), followed by buy now, pay later (38%), and new credit cards (31%).”

However, even as many consumers plan to borrow, 57% said they dropped an application or refinancing proposal due to fears of rejection resulting from income or work status (30%) and the high cost of new credit (29%).

“It is encouraging to see that more Filipinos now consider credit more accessible. However, the fact that over half of potential borrowers still walk away from their credit plans tells us there is still work to be done. Lenders have an opportunity to bridge this gap by offering more inclusive solutions — ones that not only meet practical needs but also build trust and address the emotional barriers that often come with borrowing,” Mr. Sun said.

Awareness about the importance of credit monitoring also declined to 68% from 72% last year, which TransUnion said is the lowest level recorded over the past five quarters. “This drop may reflect a possible shift toward complacency or a sense of familiarity.”

Only 27% of Filipino consumers said they check their credit reports monthly, while 20% said they do not check their credit at all, it added. “This implies even if credit participation was rising, a sizable portion of people still show disengagement from their credit profiles.”

The report also showed that 51% of respondents said they felt their credit scores would rise if lenders used more information beyond the conventional credit report, which TransUnion said shows opportunities to increase credit access through “more inclusive credit evaluation techniques and by promoting receptivity to alternative data.”

“In times of economic uncertainty, maintaining good credit health is more important than ever. A solid credit profile can provide access to critical financial opportunities when unexpected challenges arise. That is why it is vital for the financial industry to invest in better education and accessible tools that empower individuals to understand, manage and take charge of their credit journeys. Supporting consumers in building their financial resilience today lays the foundation for a more secure tomorrow,” Mr. Sun added.

TransUnion’s Q2 2025 Consumer Pulse Study was conducted on May 5 to 23 and had 943 adult Filipinos as respondents. — BVR