THE Philippines’ steady economic expansion and easing inflation are setting the stage for faster credit growth, according to TransUnion, a private credit reference agency.
Gross domestic product rose 5.5 percent year-on-year in the second quarter of 2025, lifted by resilient household spending, a 5.7 percent rebound in agriculture, and cooling inflation, which eased to 1.4 percent in June.
The Bangko Sentral ng Pilipinas (BSP) cut policy rates to 5.25 percent by end-June and further lowered them to five percent in August, creating more favorable borrowing conditions for consumers and lenders.
Against this backdrop, TransUnion’s latest Credit Perception Index (CPI) showed stability in sentiment, with Filipinos scoring 73 out of 100, just one point lower than in 2024. Trust in credit products improved, and more consumers signaled willingness to borrow from formal channels such as traditional banks, digital banks and credit cards.
Despite this growing openness, hesitations remain. High interest rates (cited by 59 percent of respondents) and fraud concerns (52 percent) continue to weigh on consumer confidence.
“Filipinos are increasingly open to using credit as a tool for progress, but they want the assurance that borrowing is safe and responsible,” said TransUnion Philippines president and chief executive officer Peter Faulhaber. He added that turning consumer interest into meaningful action will require stronger safeguards and continued financial education.
Credit demand is already picking up.
TransUnion data showed formal credit inquiries surged 49 percent in the first half of 2025, led by personal loans (+75 percent year-on-year) and credit cards (+50 percent). Card balances continue to rise, while delinquency rates remain stable, suggesting borrowers are keeping up with payments despite higher activity.
Faulhaber said the convergence of economic growth, rising openness to credit, and healthy repayment behavior presents lenders with a “unique opportunity” to expand portfolios responsibly.
“With easing rates and improving conditions, lenders must act quickly to capture growth while maintaining vigilance through trust and sound risk management,” he said. / KOC