More than half or 56% of Filipinos reported setting aside their money as an emergency fund, according to the TransUnion Consumer Pulse Study for the second quarter of 2022.
With rising prices, reports of the economy slowing down, and inflation, Filipinos chose to scrimp a little bit and pour the savings into their contingency fund. Respondents said they decreased spending on dining out and traveling.
TransUnion conducted a survey of more than 1,000 Filipino adults from May 26 to June 7.
Among generations, Gen X (born 1965-1979) and Baby Boomers (born 1944-1964) reported cutting back the most at 49% and 47%, respectively.
According to the report, 42% of Filipinos are planning to maintain this trend in the next months. In terms of large purchases such as appliances or cars, 61% of respondents expected their spending to decrease or stay the same. On the other hand, most respondents (48%) expected to spend more on bills and loans over the same timeframe, the category with the highest reported spending increase.
In terms of the ability to meet financial obligations, 46% of respondents reported being unable to pay at least one of their current bills and loans in full. To maintain the payment of bills and loans among those who said they’ll be unable to pay at least one bill or loan, 46% of respondents intend to use money from savings. At almost half (49%), Gen Z respondents (born 1995-2004) reported preferring this method the most among all generations.
Most Filipinos (96%) believe in the importance of having access to credit and lending products to achieve financial goals. Almost half of all respondents (43%) surveyed believe they have sufficient access to credit and lending products. Baby Boomers led the pack at 55% while Millennials (born 1980-1994) and Gen Z followed at 44% and 41%, respectively.
Over half (55%) of all respondents reported planning to apply for new credit or refinance existing credit within the next year. Baby Boomers led generations with 62% of respondents reporting credit application plans, with Millennials second most likely at 57%.
Among respondents with plans to apply for new or refinance existing credit in the next 12 months, most expect to apply for new personal loans (53%), and new credit cards (41%). In comparison, over a third (35%) plan to apply for a new mortgage or home loan and almost a quarter (24%) for new car loans. Conversely, over half (59%) of respondents considering applying for new credit or refinancing existing credit ultimately decide against it. Some cite the high cost of new credit or refinancing (32%), while others believe that income or employment status would serve as a reason for their rejection (30%).
Additional findings on the reasons for abandoning applications for new credit show that the lengthy amount of time spent awaiting a decision was the third highest factor for Filipinos (29%), and finding an alternative funding source was the fourth highest (27%).