TransUnion (NYSE:TRU) has reported a significant 89% year-over-year growth in credit demand from the second quarter of 2022 to the same period in 2023, indicating a robust rebound in the Philippine credit market. The surge, occurring during the 'Ber' months, traditionally a peak spending season, suggests a shift in consumer behavior towards credit usage.
The company's latest Credit Perception Report highlights that despite this uptick in demand, a majority of Filipino consumers continue to rely on cash transactions, savings accounts, and e-wallets for managing daily expenses. This preference underscores the importance of financial literacy and the need for consumers to maintain a positive financial outlook.
TransUnion Philippines' CEO Pia L. Arellano emphasized that while the increase in credit demand is a positive sign of market recovery, surpassing pre-pandemic levels, there remains a prevalent negative perception of credit in the country. The firm is keen on transforming this perspective by educating consumers on credit responsibility and encouraging banks to cater more to 'credit virgins'—those new to borrowing—with the goal of achieving greater financial inclusion.
Chief Commercial Officer Yogesh Daware noted that the demand is not limited to credit cards but spans across various credit products including installment payments and personal loans, with no indication of slowing down. He identified the younger demographic as a potential future driver for credit demand growth.
The Credit Perception Index by TransUnion found that while 69% of Filipinos understand credit concepts, installment payments are most familiar among available options, followed by personal loans and "buy now, pay later" schemes. This insight into consumer preferences could guide banks and lenders as they develop strategies to meet evolving market needs.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.