A report from Singapore-based fintech firm Roshi Pte Ltd indicates that credit card debt in the Philippines has reached a “critical” risk level. According to their findings, the typical Filipino credit card borrower owes more than four times their average monthly income.
Roshi’s report on credit card borrowing patterns across Southeast Asia highlighted that Singaporeans had the highest average monthly income in the region, at approximately PHP 273,000.
In the Philippines, Roshi identified a different pattern where income does not always directly correlate with credit card debt. The report found the average credit card debt in the Philippines to be about PHP 92,800. This was alongside an average monthly income of around PHP 21,900.
This results in a 425% debt-to-income ratio, which Roshi identified as the highest in the region and indicative of “severe financial stress”. This ratio “far exceeds regional norms and suggests potential financial vulnerability among Filipino cardholders,” Roshi added.
This occurred despite the Philippines having low overall household leverage, with borrowings representing only 11.7% of its gross domestic product. Roshi suggested this indicates “a specific preference for card-based borrowing among those with access to formal financial services”.
Elsewhere in the region, Indonesia recorded the lowest debt-to-income ratio at 21%, a figure Roshi labelled as “low risk”. Such low risk was attributed to limited credit card penetration in a primarily cash-based economy
Vietnam had a 127% debt-to-income ratio, categorised as “high risk,” reflecting rapid financial modernisation and increased credit adoption.
Featured image by armmypicca on Freepik.
