Along with most of the world, the Philippines is emerging from the global pandemic with renewed optimism and Filipinos learning lessons from the prolonged pandemic, according to a survey.
The Q1 2022 Consumer Pulse Study conducted by information and insights company TransUnion (NYSE: TRU), showed more Filipinos expect their household income to increase in the next 12 months. The National Economic and Development Authority (NEDA) is projecting the domestic economy to grow between 7 and 9 in 2022.
TransUnion surveyed 1,078 adults in the Philippines to measure changing consumer attitudes and behavior based on the dynamics of income, debt and identity theft. The study was conducted from Feb. 8-23,2022 with respondents from Gen Z (born 1995-2004), Millennials (born 1980-1994), Gen X (born 1965-1979), and Baby Boomers (born 1944-1964).
According to the survey, optimism among Filipinos was manifested in the fact that 75 percent of those surveyed anticipate their household income will increase this year, with the survey results also reflecting the lessons Filipinos learned following the COVID-19 pandemic.
In particular, 51 percent of respondents said in the last three months they saved more in an emergency fund, 45 percent cut back on expenses for dining out, travel, and entertainment, and 28 percent added to or expanded digital services like wireless and internet. Over the next three months, consumers expect their spending on the following to increase: medical care/services (44%), retail shopping (37%), and retirement funds and investing (35%).
Credit is an important way to empower consumers and encourage them to participate actively in the economic recovery. In the next 12 months, most Filipinos (51%) expect that they will be able to pay at least one of their current bills and loans in full. However, the other 49 percent from the past quarter expect that they are unable to pay at least one of their current bills and loans in full, as there’s been no significant change in the ability to meet financial obligations.
Lastly, Filipinos also showed high expectations with 52 percent planning to apply for new personal loans. However, the survey also showed that half of those surveyed (50%) abandoned plans to apply for new credit or refinance – with the top reasons being the high cost of new credit or refinancing (32%) or they found an alternative funding source (32%).
Among consumers surveyed, it is apparent that all generations believe that it is important to have access to credit and lending products to achieve their financial goals.
However, it is the younger Filipinos, Gen Z, who view credit as an essential part of their everyday lives. This is proven by the fact that from nearly half of the respondents who are planning to apply for credit in the next year (46%), half of them are younger generation Filipinos (50%), the Gen Z. Meanwhile, more than half (57%) of those with a credit score between 750 and 789 (considered a ‘very good’ score) said that they plan to apply for new credit.
Reflecting how the pandemic accelerated consumers going online, the survey found 57% of Filipinos said they conduct more than a quarter of their transactions online.
With so many transactions occurring online, fraudsters appear to have taken notice. Forty-fivepercent of respondents said they had been targeted by a digital fraud scheme in the last three months. Among those targeted, the most common digital fraud schemes that respondents said they encountered were: phishing (42%), money/gift card (38%), third-party seller scams on legitimate online retail websites (30%), fundraising (25%), identity theft (23%) and having their account taken over (22%).
While nearly half of all Filipinos said they believe their credit score would increase if businesses used information not on a standard credit report—e.g., rental payments and buy now, pay later loans—86% expressed considerable concerns about sharing personal information. The top reasons for this involve invasion of privacy (76%) and fear of identity theft (73%).
"From optimism about improved household incomes to anticipated increased spending in key areas, Filipinos are increasingly bullish about our recovery from the global pandemic," TransUnion Philippines President and CEO Pia Arellano said.