Credit knowledge in the Philippines improved in the second quarter of 2024, according to TransUnion, a credit reporting agency.
This was based on the second annual Credit Perception Index (CPI), which examines Filipino perceptions towards credit, factors contributing to those perceptions and broader implications for the nation as a whole.
The CPI in the Philippines stands at 69 out of 100, an increase of four points from last year.
“The improved 2024 CPI score of the Filipino population is a product of collective efforts to foster greater financial literacy and inclusion. Despite financial uncertainties, we are delighted to see Filipinos proactively seeking ways to better manage their finances and unlock economic opportunities through responsible credit use,” said Weihan Su, principal of research and consulting for Asia Pacific at TransUnion.
“However, disparities in credit knowledge still exist. Continued efforts are needed to further expand access and services to unbanked Filipinos, enabling them to realize the benefits of being financially included,” he said.
About 70 percent of Filipinos have a general understanding of the concept of credit. Across the credit products, Filipinos are most knowledgeable about installment payments (82 percent), followed by credit cards (76 percent), and buy now pay later (BNPL) services (74 percent).
TransUnion reported a 5-percentage-point increase in knowledge in both credit cards and BNPL. The two products also recorded a jump of six and three percentage points from last year in terms of trustworthiness, standing at 76 percent and 74 percent, respectively. Only installment payments stand at 80 percent.
BNPL and credit cards, which are at 72 percent, are also growing in favor among the general population, rising five and nine percentage points from 2023.
Despite the said improvements, the knowledge gap still exists in the unbanked population. Only 54 percent of unbanked Filipinos are knowledgeable about credit, a 16-percentage-point deficit compared to the general population, and a 29-percentage-point gap versus professionals from the financial technology (FinTech) sector.
Transunion also reported that financial sentiment among Filipinos appears to be less optimistic this year. Thirty-eight percent of the general population estimates their total wealth to be at P250,000 and below, and 75 percent of the surveyed Filipinos also consider themselves to be at best lower middle class or below.
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