Pinoys cutting back on non-essential spending

Amid rising costs

MANILA, Philippines — Filipinos are expected to adjust their spending habits by cutting back on the non-essentials in the second half amid lingering concerns about inflationary pressures.

Based on the latest consumer pulse study of TransUnion Philippines, Filipinos are entering the second semester with a mix of financial optimism and caution, with the outlook tempered by ongoing economic challenges such as inflation and job security.

As such, consumers are adjusting their spending habits and seeking access to credit.

According to the study, nearly half of Filipinos are cutting back on discretionary expenses, while almost a quarter scaled down on digital services.

Headline inflation continued its downtrend in May, easing to an almost six-year low of 1.3 percent. For the five-month period, inflation settled at 1.9 percent, below the government’s two to four percent target.

However, the past month saw price pressures coming from more expensive meat and vegetables, elevated global oil prices and a weaker peso.

More than 40 percent of consumers indicated they may be unable to fully repay at least one of their current bills or loans, the study found.

Apart from inflation, job security and interest rates continue to be the leading concerns.

The study revealed that access to credit continues to be seen as vital, with demand remaining strongest among Gen Zs and millennials who plan to apply for or refinance credit in the next 12 months.

Personal loans were the most sought-after product, followed by buy now, pay later and new credit cards, it said.

“In times of economic uncertainty, maintaining good credit health is more important than ever. A solid credit profile can provide access to critical financial opportunities when unexpected challenges arise,” Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion said.

On the upside, Filipinos also took proactive steps to improve their financial standing, with 45 percent boosting their emergency savings and 33 percent accelerating debt repayments.

Sun said consumers are not just adapting to current conditions but are also making thoughtful decisions to secure long-term financial well-being.