Seven in 10 Filipinos expect their income to increase next year despite ongoing concerns over job security and inflation, according to data from TransUnion.

According to TransUnion’s latest consumer study conducted in the second quarter of the year, 73 percent of Filipinos have expectations that their income will “increase in the next year.” This optimism is based on the most recent report, which indicates a 41 percent increase in income, affecting two in five Filipinos over the past three months.

Income decline also improved during the period, with 17 percent experiencing a decrease in income, from 19 percent in the same period in 2024.

“While many expressed confidence towards their income prospects over the next year, their outlook is tempered by ongoing economic challenges such as inflation and job security,” TransUnion said.

Based on the study, the three biggest concerns for the Filipino consumers are inflation at 83 percent, job security at 59 percent, and interest rates at 40 percent. Available data from the Philippine Statistics Authority (PSA) showed that inflation was the slowest in nearly six years in May—the month when the study was conducted. Data on June inflation will be released on Friday, July 4.

To recall, the country's unemployment and underemployment rates saw slight increases in April this year. According to the latest Labor Force Survey, the national jobless rate climbed to 4.1 percent, up from 3.9 percent in March and 3.8 percent in February, though still lower than January’s 4.3 percent.

Additionally, the Bangko Sentral ng Pilipinas (BSP) has so far reduced the key borrowing costs to 5.25 percent from 5.5 previously. To date, the BSP has slashed a total of 125 basis points (bps) since it started its easing cycle in August last year to curb inflation.

Given the perceived economic challenges, “consumers are actively adjusting their spending habits and seeking access to credit as they work towards greater financial resilience.”

“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 non-essential spending, saving consistently, and staying on top of debt,” said Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion.

Nearly five in 10 Filipinos reduced discretionary spending, while 24 percent cut back on digital services. Meanwhile, 45 percent increased emergency savings and 33 percent paid off debts faster—continuing trends observed in the second quarter of 2024.

More than four in 10 Filipinos (44 percent) admitted that they may “still struggle to settle their bills and loan payments in full.” Fifty-seven percent of Filipinos were afraid of being rejected by creditors and of higher borrowing costs, causing them to abandon their borrowing plans.

Meanwhile, the number of people who believe they have sufficient access to credit improved to 44 percent from 38 percent in 2024.

Credit demand “remains strong,” particularly among Gen Z (58 percent) and Millennials (52 percent) who plan to apply for or refinance credit within the next year. Personal loans were the top choice for 45 percent of potential borrowers, followed by buy-now-pay-later options (38 percent) and new credit cards (31 percent).

“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,” Sun said.