How Pinoys are redefining financial stability, credit use

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January 23, 2026 | 12:00am

From recovery to resilience

MANILA, Philippines —  Over the past few years, much of the conversation around Filipino household finances has understandably focused on restoring income, rebuilding confidence and regaining momentum after sustained economic disruption from the pandemic.

As 2025 came to a close, however, our data from the Q4 2025 Consumer Pulse Study highlights a shift from recovery toward sustaining resilience and flexibility. As the cost of everyday goods continues to shape how households plan, prioritize and make financial decisions, Filipino consumers are navigating uncertainty with greater financial control and that control is emerging as a clear indicator of financial stability.

Income trends provide the foundation for this resilience, with most households maintaining their footing rather than slipping backward. Data from the last quarter of 2025 showed that 42 percent of Filipinos reported an increase in household income over the past three months, while another 41 percent saw no change.

Looking ahead, optimism also remains strong. Three quarters (75 percent) of consumers expect their income to rise over the course of this year, and 80 percent describe themselves as optimistic about their household finances for the same time period. This confidence is particularly notable given that payment pressure has remained largely unchanged year-over-year, with 59 percent of Filipinos expecting to meet all bills and loan obligations in full — the highest level of confidence in 2025.

However, this confidence is not translating into higher consumption. Nearly half of Filipino households (47 percent) reported cutting back on discretionary spending such as dining out, travel and entertainment over the past few months. Half of consumers (50 percent) also expected to spend less last holiday season compared to the year before, even during a traditionally high-spending period at year-end.

On the surface, confidence paired with restraint may seem contradictory. In reality, the data tells a story of prioritization. With inflation for everyday goods cited by 81 percent of consumers as a top financial concern, restraint has become a practical form of financial discipline rather than a signal of pessimism.

Filipinos are not withdrawing from economic activity. They are choosing where and how to participate more carefully.

Today, financial stability is less about expansion and more about flexibility, as revealed by our data. Instead of disengaging, households are protecting essentials, managing obligations and limiting exposure where risks feel less predictable.

Nearly half of consumers (47 percent) expect bills and loan payments to rise in the first quarter of the year, while 42 percent anticipate higher medical costs and 36 percent  foresee increased retail spending. Yet among these essentials, only 27 percent plan to increase spending on large purchases such as appliances or vehicles. These spending expectations signal a cautious approach to long-term financial commitments.

That same sense of deliberateness is evident in how Filipinos now approach credit. While access to credit remains important, fewer consumers see it as essential for achieving their financial goals. In Q4 2025, 58 percent of Filipinos said access to credit was very important, down from 64 percent a year earlier.

At the same time, intent to apply for or refinance credit fell to 47 percent from 53 percent in 2024. Rather than pointing to reduced access, this shift reflects growing selectivity. A closer look at borrowing plans shows that when consumers do seek credit, they are gravitating toward smaller, more flexible products that offer greater predictability. Personal loans account for 49 percent of intended credit activity, while buy now, pay later (BNPL) options follow closely at 35 percent.

Most notably, fewer consumers are abandoning credit applications mid-process. Just over half (56 percent) reported abandoning plans this year, down from nearly two thirds (64 percent) last year. The decline in abandoned applications suggests that consumers are entering the credit process with clearer expectations and stronger self-assessment, aligning borrowing decisions more closely with readiness and their financial planning.

Taken together, these trends point to a maturing consumer credit environment. More deliberate spending reflects thoughtful household planning, while intentional borrowing highlights a growing emphasis on responsible credit use aligned with long-term financial goals.

Weihan Sun is principal of research and consulting for Asia Pacific at TransUnion, a global information and insights company with over 13,000 associates operating in more than 30 countries, including the Philippines.