Against the backdrop of rising prices of basic goods, Filipinos are still optimistic about their household income, according to the latest Consumer Pulse Study of TransUnion.
The majority of Filipinos surveyed (80%) expect their income to increase in 2023, and almost three-fifths (57%) say they will be able to repay bills and loans. TransUnion, a global information and insights company, said these findings are buoyed by stronger-than-expected GDP growth and rising employment after the country lifted nearly all COVID-19 restrictions.
However, the optimism is hampered by economic woes with 42% expecting the country to go into a recession in 2023, up by a significant 15 points from the previous quarter.
“Consumers’ mixed sentiments reflect the complex dynamics facing the Philippines along with many other nations, as the world continues to recover from more than two years of disruptions”, said Amrita Mitra, chief operating officer of TransUnion Philippines.
TransUnion’s Consumer Pulse Study surveyed 1,005 consumers in the Philippines during Nov. 3-15, 2022.
For the fourth straight quarter, Filipinos expressed concern about inflation, which affects prices of basic necessities. The study found that 82% were very or extremely concerned about the inflation rate, 3 points higher than last quarter. When asked about how they plan to deal with a potential economic slowdown, around three-quarters of Filipinos plan to cut back on spending (72%) and build up savings (69%).
Across generations, the youngest group, Gen Z, appears to have the highest appetite for savings (74%) but the lowest desire for reducing spending (65%). In contrast, Baby Boomers are least keen on savings (49%), and Gen X are the most open to reducing spending (78%).
The study showed that 96% of respondents believe access to credit is important to achieve their life goals. However, only 45% of the respondents say they have sufficient access to credit and lending products.
TransUnion said the percentage of consumers seeking new credit has increased steadily for four quarters in a row, reaching 57% at the yearend, up from 46% at the beginning of 2022.
Among those seeking new credit, personal loans (53%) and credit cards (39%) continue to top consumer credit products. However, rising interest rates appear to be a key factor affecting Filipinos’ decisions on seeking new credit. Close to half the respondents (46%) say that rising interest rates highly impact whether they would apply for new credit, up 8 points from a year ago.