Robust economic growth and record-low inflation in the second quarter are creating a favorable environment for accelerated credit expansion in the Philippines, according to a report from global information and insights firm TransUnion.

The report, citing the TransUnion Credit Perception Index (CPI) for 2025, noted that Filipino consumers are becoming more open to using credit, though some hesitation remains. The general population recorded a CPI score of 73 out of 100, reflecting stable credit sentiment, supported by a six-point increase in trust in credit products.

TransUnion also said a growing number of consumers expressed the intention to borrow from formal credit channels such as traditional banks, virtual banks, and credit cards. However, the firm noted that external factors, including high interest rates (59 percent) and fraud concerns (52 percent), continue to hold Filipinos back from actively using credit.

“We are seeing a growing willingness among Filipinos to embrace credit as a tool for progress, but they want to know they can do so with confidence,” said Peter Faulhaber, President and CEO of TransUnion Philippines. "By ensuring that borrowing is both responsible and empowering, we can help turn openness into meaningful action that benefits households and the economy alike."

TransUnion attributed the growing credit acceptance to the Philippines’ strong economy, which expanded by 5.5 percent year-over-year in the second quarter of 2025, driven by strong household spending and a rebound in agriculture.

The report also noted that headline inflation dropped to 1.4 percent in June and that the Bangko Sentral ng Pilipinas (BSP) reduced policy rates to 5.25 percent by the end of the second quarter, making borrowing conditions more supportive for consumers and lenders.

Per TransUnion’s bureau data, formal credit demand in the Philippines, measured by credit inquiries, surged by 49 percent in the first half of 2025. This was led by personal loans and credit cards, which increased by 75 percent and 50 percent, respectively. Card balances have continued to grow, while delinquency rates have remained stable.

The combination of economic expansion, improving openness to credit, and responsible repayment behavior presents an opportunity for lenders to grow their portfolios. However, consumer hesitation highlights the importance of trust, education, and tailored engagement strategies.

"At TransUnion, our mission is to equip both consumers and lenders with the data, tools and insights they need to thrive in today’s evolving credit landscape,” Faulhaber said.

He added, “As external conditions improve, it is essential for lenders to capitalize on growth opportunities, act swiftly amid easing rates and maintain vigilance through trust and sound risk management—ultimately enabling deeper, more confident engagement with increasingly credit-ready consumers.”