MANILA, Philippines — More than half of Filipinos are increasing the money they are alloting for emergency funds with the economy expected to slow down and the continued rise in prices of goods, according to a survey by global information and insights company TransUnion.
Conducted from May 26 to June 7, TransUnion’s Consumer Pulse Study for the Philippines for the second quarter covering 1,005 adults, showed 56 percent decided to save more for their emergency fund.
It also showed that 43 percent of the respondents cut back on discretionary spending like dining out, travel and entertainment, compared to the 22 percent that spent more on similar activities.
“This is highly attributed to the election season affecting spending and investment of both the government and private sectors,” TransUnion said.
The country’s inflation rate rose to 6.1 percent in June from 5.4 percent in May.
The study found that majority of Filipino consumers are looking to maintain the trend of saving more and spending less, with 61 percent expecting their large purchase spending to decrease or stay the same, and 48 percent looking to spend more on bills and loans.
When it comes to meeting financial obligations, 46 percent of respondents said they are unable to pay at least one of their current bills and loans in full.
The survey showed that 46 percent of those who were unable to pay at least one of their bills, intend to use money from savings.
To achieve financial goals, most or 96 percent of Filipinos believe it is important for them to have access to credit.
While this is the case, only 43 percent said they had access to credit and lending products, with baby boomers leading the pack at 55 percent, followed by millennials or those born in 1980 to 1994 and Gen Zs with 44 percent and 41 percent, respectively.
More than half or 55 percent of all respondents intend to apply for new credit or refinance existing credit within the next year.
Among those planning to get a new loan or to refinance existing credit in the next 12 months, 53 percent plan to apply for new personal loans, and 41 percent are considering new credit cards.
The study also showed 59 percent of the respondents who are looking to apply for new credit or refinance existing credit dropped the plan, with the high cost of new credit or refinancing (32 percent), and their application would be rejected because of their income or employment status (30 percent) cited as reasons.
Other reasons for abandoning applications for new credit are the long time spent waiting for a decision (29 percent), and finding an alternative funding source (27 percent).
“Credit can act as a catalyst for economic growth, but many consumers feel excluded or are rejected for credit because lenders can’t accurately assess their credit risk,” TransUnion Philippines president and CEO Pia Arellano said.
By using enhanced digital journeys and improved insights, she said lenders can come up with more accurately priced loans.
Citing the Consumer Pulse Study, Arellano said 54 percent of consumers believe their credit scores would improve if businesses used data other than what is available in a standard credit report.