Gen Zs drive credit card market growth

CEBU, Philippines — Younger Filipino consumers, particularly the Gen Z, have driven the growth of the credit card market in the Philippines, comprising one-third of all New-to-Card borrowers, a study revealed.

TransUnion’s global information and insights company analysis uncovered that Gen Z made up one-third or 33 percent of all New-to-Card borrowers in 2023.

New-to-Card borrowers are those originating their first-ever credit card on file according to TransUnion Philippines’ data.

TransUnion’s most recent first quarter 2024, entitled the Philippines Consumer Pulse Study discovered that almost all surveyed Gen Z Filipinos (98 percent) see access to credit and lending products as important to achieving their financial goals.

This segment of consumers is among the most frequent credit monitors in the country, consistently keeping an eye on their credit status to find the best available credit offers.

“The credit card market in the Philippines will continue to experience growth as demand remains high, especially amongst younger consumers. Data from TransUnion clearly shows that the younger generation of Filipinos, particularly Gen Z, are quickly emerging as a cornerstone for future market growth. This generation places a higher importance on accessing credit and lending products to achieve their financial goals. As more Gen Z consumers reach adulthood, we expect their share of the credit market to continue increasing,” said Weihan Sun, Principal of Research and Consulting for Asia Pacific at TransUnion.

Generation Z or Gen Z is the name given to the generation of people born between 1997 and 2012.

TransUnion insights showed that Gen Z  Filipinos are emerging as significant contributors to the increase in credit card originations.

The percentage share of overall originations among Gen Z Filipinos has more than doubled over the past five years – up from just under one in ten (nine percent ) in the third quarter of 2019 to more than one in five (22 percent) in the third quarter of 2023.

According to TransUnion, this share will likely increase as more Gen Z consumers reach adulthood.

Gen Z Filipinos emerged as a significant consumer group driving credit originations and comprised one-third of all New-to-Card borrowers.

Total outstanding credit card volumes increased year-over-year (YoY) from 9.3 million cards in the fourth quarter of 2022 to 11.2 million cards in the fourth quarter of 2023.

Over the same period, the credit card penetration rate, meaning a percentage of adults holding at least one credit card, reached over 15 percent of Filipino adults. Together, these trends represent a growth of around 20 percent in overall volume and penetration rate in the last year.

Additional data from the Credit Card Association of the Philippines (CCAP) was consistent with the trends observed by TransUnion. Its data showed credit card spending increased by 39 percent to reach P853 billion in the first half of 2023 – a jump from the 29 percent increase in the previous year.

The trends in card originations, total volume, penetration, and spending all indicate a promising growth trajectory for the credit card market in the Philippines.

TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries, including the Philippines. It is the first comprehensive private credit reference agency (CRA) in the Philippines.