FILIPINOS remain concerned about their household finances despite seeing increased incomes, a study by TransUnion showed.
“Although more Filipinos enjoyed increased household incomes in Q2 2024 and expect this trend to persist in the next 12 months, the adjustments they made to household budgets suggest a cautious approach to financial management,” TransUnion Principal of Research and Consulting for Asia Pacific Weihan Sun said.
“This seemingly contradicting sentiment suggests a vigilant yet hopeful outlook as Filipinos continue to acclimate to economic challenges, navigating between necessary expenditures and financial prudence,” he added.
According to the TransUnion’s second-quarter Consumer Pulse Study, which surveyed 944 Filipino adults, 44% of respondents said they are concerned about their household finances, up from 41% a year ago.
This came despite 42% saying their income grew in the second quarter, higher than the 41% seen in the same period last year.
Optimism about respondents’ outlook on household finances in the next 12 months went down to 80% from 84% last year. On the other hand, pessimistic (8%) and neutral (12%) outlooks edged up.
“The biggest concerns affecting household finances are inflation, job security, and interest rates,” TransUnion said.
In the second quarter, nearly half or 47% of households cut back on unnecessary spending such as dining out, travel, and entertainment, while 22% increased their expenses for these.
Spending on digital services was mixed, with 24% canceling or reducing services, while 26% added or expanded services. Meanwhile, 21% canceled memberships and 15% added new ones.
“These adjustments reflected a cautious approach to managing household budgets amid economic uncertainties, highlighting the delicate balance households strive to maintain between necessary expenditures and discretionary spending,” TransUnion said.
This quarter, Filipinos expect an increase in discretionary spending, with more than half or 52% of respondents saying they expect more bills and loans, while 39% said they foresee increased retail shopping.
Medical spending (43%) and large purchases (29%) are also expected to rise in the coming months, the survey showed.
“These projections indicate a cautious but hopeful outlook as households navigate the balance between necessary expenditures and financial prudence,” TransUnion said. “The data underscore a resilient consumer base adapting to economic challenges while maintaining a forward-looking financial health and spending perspective.”
CREDIT ACCESS STILL AN ISSUEMeanwhile, Filipinos were unsatisfied with the level of credit access in the second quarter, with only 38% saying it was sufficient for their needs.
The report showed that 63% of respondents said credit access was extremely or very important, up from 56% in the second quarter last year.
Consumers’ intention to apply for new or refinance existing credit rose to 54% in the second quarter from 45% a year ago. Meanwhile, confidence in approval for credit or lending products saw a modest increase to 53% from 51%.
The frequency of credit report checks among Filipinos was stable, as 25% said they checked monthly, 27% weekly, and 15% daily, indicating consistent engagement with monitoring, TransUnion said.
However, respondents gave mixed answers on the importance of credit monitoring, with 34% saying it was extremely important, 38% saying it was very important, and 14% saying it was moderately important.
Meanwhile, 15% said they thought their credit scores would improve significantly in the future, while 38% said it would increase somewhat, and 24% expected no change.
“Consumers’ perceptions of how their credit scores would change if businesses leveraged non-standard credit information also shifted,” TransUnion said.
On the other hand, online transactions in the second quarter were stable from the previous year, with only 8% (up from 7%) saying did they not make any transactions.
Those who said they transacted around 1%-25% of the time online decreased to 34% from 36%, while those who transacted around 25%-50% online went up to 34% from 33%.
Respondents who said they transacted 51%-75% online rose to 19% from 18%. Lastly, those who transacted digitally 76%-100% were steady at 5%.
RISING FRAUD ATTEMPTSWhile Filipinos who were unaware about or victimized by fraud attempts decreased, smishing attempts picked up as bad actors find new ways to attack consumers, TransUnion added.
“Although the number of respondents unaware of fraud and those victimized remains relatively stable, smishing attempts have increased, indicating that fraudsters are diversifying tactics to target unsuspecting consumers. With a slight increase in successful attempts to defraud consumers, robust consumer education efforts on fraud prevention must continue to further build consumer awareness. Consumers are also encouraged to take more protective measures in closely monitoring their credit and finances to secure against the growing threats not only in the Philippines but across the world,” Mr. Sun said.
Some 30% of respondents said they were unaware of being targeted by any fraud schemes, steady from 31% in the previous year.
Meanwhile, 60% said they were targeted but did not fall victim to fraud, while 10% admitted to being targeted and becoming victims, up slightly from 9% the previous year.
Phishing was the most common form of fraud attempts seen by respondents at 51%. Smishing, which are text messages that aim to acquire sensitive data from targets, rose to 44% in the second quarter from 40% last year. Money or gift card scams (36%) and third-party seller scams on legitimate online retail websites (31%) were steady during the period.
“These findings highlight the diverse and evolving nature of fraud schemes through various channels and methods,” TransUnion said.
Meanwhile, there was a slight increase in respondents who expressed concern about sharing their personal information at 89% from 88% previously.
“Some responses were neutral (8%, up from 9%) while fewer (3%) said they were not concerned,” TransUnion said.
In terms of reasons for concern, respondents cited identity theft as the top cause of fear at 73%, followed by unsolicited marketing communications (42%), government surveillance (23%), and personal invasion of privacy (78%).
“While the overall level of concern remained high, there was a small but notable shift in the specific reasons behind these concerns. The data underscore the importance of robust identity protection measures and consumer education on fraud prevention. As fraud schemes evolve, consumers must remain vigilant and proactive in protecting their personal information,” TransUnion added. — A.M.C. Sy
