THE Philippine credit market is expected to grow as inflation goes down, a consultancy firm said Tuesday.
TransUnion noted that inflation eased to 1.3 percent in May, restoring real purchasing power to Filipinos.
The firm also noted that a survey conducted in the first quarter of the year showed that 37 percent of Filipinos said they planned to spend more on retail purchases for items like clothing and electronics over the next three months.
Another 29 percent, meanwhile, said they expect to boost their discretionary spending or spending on things like dining out, travel, and entertainment.
“Rising retail sales are likely to translate into more credit card transactions, buy-now-pay-later usage, and small-ticket installment loans,” TransUnion said.
The company also noted that 65 percent of Filipinos they surveyed in the first quarter said they have used buy-now-pay-later, saying they used the service as it was easy to apply for it.
“Lower inflation is creating a more supportive environment for consumer credit growth,” said TransUnion Philippines president and chief executive officer Peter Faulhaber.
“We expect to see stronger repayment capacity among existing borrowers and higher demand among new-to-credit consumers, particularly in the small-ticket and revolving credit segments,” he said.
TransUnion also noted that lenders must also use data-driven strategies to manage risk while growing their credit portfolio.
“By equipping lenders with advanced analytics and empowering consumers — especially those that are new to credit — we help ensure that more Filipinos can access the financial tools they need to thrive and participate confidently in the economy,” Faulhaber said. (ABS-CBN News)
