MANILA, Philippines — More Filipinos continue to grow their savings as they cut back on discretionary spending amid high inflation and a possible global recession, according to a survey by TransUnion.
Based on the Consumer Pulse Study for the third quarter of 2022, 54 of Filipinos said they had cut back on discretionary spending, such as dining out, travel and entertainment over the last three months.
In addition, 76 percent of the Filipino respondents agreed that the economy is either already in a recession or will enter one by the end of 2023, while almost half or 44 percent cited inflation for everyday goods as their biggest concern affecting their household finances in the next six months.
Results of the survey also showed that inflation was the leading household financial concern over the next six months followed by a possible global recession.
“Additionally, in anticipation of a possible recession, 66 percent said they are building up savings,”TransUnion said.
According to the Philippine Statistics Authority (PSA), inflation increased to 6.9 percent in September from 6.3 percent in August, as food and energy costs continue to increase.
TransUnion said 72 percent of Baby Boomers and 58 percent of Gen X reduced their discretionary spending the most among age groups in the past three months, and Gen Z (69 percent) and millennials (62 percent) said they saved more in emergency funds in the last three months compared to other generations.
“When it comes to future spending, Filipinos said that their greatest spending increases in the next three months are likely to be on bills and loans, medical care/services, and retirement funds and investing. They said they are least likely to spend more on large purchases like cars or appliances,”TransUnion said.
Additionally, 47 percent of respondents who said they wouldn’t be able to pay at least one of their current bills and loans in full said they would pay a partial amount for these.
The survey also found that 58 percent of Gen Z and 55 percent of millennials who said they expect to be unable to pay at least one of their current bills and loans in full also said their leading choice of funding to pay these is by using their savings.
Meanwhile, nearly every respondent said they believe having access to credit and lending products is important in achieving financial goals, with 56 percent saying they are planning to apply for new credit or refinance existing credit within the next year.
In addition, more than half or 54 percent of Filipinos who said they plan to apply for new credit within the next year said they would apply for a new personal loan, while 41 percent said they would apply for a new credit card.
Across generations, 63 percent of millennials said they plan to apply for new credit or refinance existing credit within the next year, with 60 percent of Gen Z saying the same.
Moreover, more respondents or 83 percent believe that monitoring their credit is extremely important, up from 80 percent in the previous quarter.
A significant percentage, particularly among millennials (33 percent), said they conduct more than half of their transactions online.
Separately, a vast majority or 89 percent remained concerned over sharing their personal information. This may be connected to more consumers saying they were targeted by digital fraud in the last three months but did not become a victim of it.