Filipinos are caught in a financial trap, increasingly forced to borrow money for food and basic needs despite their deep cultural dislike of debt, according to the latest Bangko Sentral ng Pilipinas (BSP) report that highlighted growing strain on household finances.

The 2025 Consumer Finance and Inclusion Survey released by the central bank found that while seven in 10 adults believe taking out a loan is a “bad idea,” many are forced to do so anyway.

The BSP report, which surveyed the financial conditions of 75.6 million Filipino adults, showed that payments for food and other basic necessities now account for 32 percent of all loan utilization across the country.

“Many continue to rely on borrowing to meet basic needs such as food, education, and health expenses,” the survey report stated.

The BSP data also revealed the widening gap between those who manage debt effectively and those spiraling into a cycle of insolvency.

The central bank reported that 56 percent of borrowers can easily settle their obligations, and 77 percent maintain disciplined payment schedules, either meeting deadlines or paying ahead of time.

However, the BSP noted that a “sizable minority” is struggling to keep up. Approximately 34 percent of respondents indicated frequent difficulty in making payments, while eight percent admitted to borrowing from new sources just to settle existing debts—a practice the BSP identified as a dangerous debt trap.

The survey also showed concerning regression in financial inclusion as the share of Filipino adults with a formal financial account dropped to 50 percent in 2025 from 56 percent in 2021.

The central bank attributed the decline to decrease in transaction accounts linked to loans from microfinance institutions and cooperatives, noting a lower incidence of borrowing from these specific formal lenders.

Moreover, financial resilience among households appears thin, with only about one-third of adults reported that their current savings or finances would last if their income were interrupted.

While nearly half of the population said they could cover living expenses for at least one month without borrowing if they lost their primary source of income, the reliance on credit for basic health, education, and food suggests that many remain just one financial shock away from distress.