TransUnion anticipates continued momentum and growth in the consumer credit market in the Philippines. The company stated that a stable macroeconomic environment and strong household consumption support this outlook.

Easing inflation and increasing retail activity should create a more favourable environment for both lenders and borrowers. This particularly benefits those new to credit or underserved.

According to the Philippine Statistics Authority (PSA), the country’s Gross Domestic Product (GDP) grew by 5.4% year-on-year in the first quarter of 2025.

Wholesale and retail trade, motor vehicle repair, financial services, and manufacturing industries primarily drove this growth. Headline inflation also eased to 1.3% in May, marking its lowest level since 2019. This has contributed to restoring real purchasing power for Filipino households.

The retail sector continued to be a significant driver of consumption, with wholesale and retail trade expanding by 6.4% year-on-year in Q1 2025.

TransUnion’s Q1 2025 Consumer Pulse Study indicated that 37% of surveyed Filipinos planned to increase their retail purchases over the next three months. Meanwhile, 29% expected to increase their discretionary spending.

Peter Faulhaber, President and CEO of TransUnion Philippines, noted that lower inflation is fostering a more supportive environment for consumer credit market growth.

“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 continued.

Declining inflation is generally associated with improved credit repayment behaviour. TransUnion suggests that lenders with robust risk management strategies may observe marginal improvements in early-stage delinquency ratios over the next two quarters.

Rising retail sales are also likely to translate into increased credit card transactions, use of buy now, pay later (BNPL) services, and small-ticket instalment loans. The study also found that 65% of surveyed Filipinos had used BNPL, primarily citing its ease of application.

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