Filipino Credit Confidence Stable, But Concerns About Risk and Access Persist
Despite growing financial literacy, many Filipinos remain hesitant about taking on credit, viewing products like credit cards and personal loans as perhaps risky, according to a recent report from TransUnion Philippines. While trust in credit has improved consumers are prioritizing security and supportive lending environments.
TransUnion’s Credit Perception Index (CPI) registered at 73 points in September, a slight dip from 74 the previous year, indicating a stable but cautious sentiment. However, trust levels have increased by six points since 2024, according to Peter Faulhaber, President and CEO of TransUnion Philippines. Security and trust are now the second most importent factors for borrowers when choosing a lender, surpassed only by convenience.
The CPI also revealed a nine-point decrease in receptivity to credit messaging, suggesting fewer Filipinos are inclined to explore credit options even after being informed of their benefits. This hesitancy is fueled by concerns about fraud and high borrowing costs.
“Whilst Filipinos are more knowledgeable and they do trust credit more than they did last year, consumers really want stronger assurances through safer and more supportive credit environments,” Faulhaber stated. New measures like the anti-financial scamming law and restrictions on lending related to gambling are addressing some of these concerns, but transparency and clear dialog from lenders remain crucial.
Expanding access to credit remains a meaningful hurdle, particularly for older generations and individuals with limited traditional credit histories. Many “boomers” willing to utilize credit may be denied access due to a lack of established credit scores. To address this, lenders are increasingly turning to choice data sources – such as consistent utility and telecommunications bill payments – to build a more extensive picture of a borrower’s financial responsibility.
transunion has been developing a system as 2017 to convert this alternative data into a credit score, allowing banks and lenders to evaluate customers beyond traditional credit bureau information. Faulhaber reports significant industry adoption of this approach, which aims to responsibly extend credit access to a wider range of Filipinos. Sharing data and insights,like the CPI,also contributes to building borrower confidence.
