High living costs are forcing Filipino households to cut discretionary spending and rely more heavily on credit, even as most remain optimistic about their financial prospects, a study by credit bureau TransUnion showed.
According to TransUnion’s Q2 2026 Consumer Pulse Study, 74% of respondents expect their household finances to improve over the next year despite mounting affordability pressures.
Inflation remains the dominant concern, with 84% of consumers identifying rising prices as one of the biggest threats to their finances over the next six months.
Data from the Philippine Statistics Authority showed inflation eased to 6.8% in May from 7.2% in April, but the rate remained among the highest recorded for the month since 2021.
Against that backdrop, 45% of consumers expect to miss payments on at least one current bill or loan in the next three months, up from 44% a year earlier.
“Filipino households are entering the second half of the year optimistic but clear-eyed,” Weihan Sun, TransUnion’s senior director of research and consulting for Asia Pacific, said in a statement.
“They expect their incomes to stay resilient, which keeps confidence broadly intact – yet they feel the weight of inflation on everyday costs, such as rice prices, and uncertainty over upcoming financial commitments amid broader global economic headwinds.”
Consumers are adjusting their spending habits to cope with higher costs. Some 55% reduced spending on dining out, travel and entertainment over the past quarter, up from 47% in the second quarter of 2025.
At the same time, 49% increased their emergency savings, while active use of available credit rose to 17% from 15% a year earlier.
“Filipino households are not simply responding to pressure, but prioritizing what matters and being deliberate with every peso, using credit with intention to smooth day-to-day cash flow and bridge spending gaps,” Sun said.
Despite tighter budgets, demand for financing remained strong. Nearly half of respondents, or 48%, said they planned to apply for new credit or refinance existing debt over the next year.
Interest in personal loans climbed to 52% from 45% a year earlier, while intended credit card applications rose to 35% from 31%. Mortgage demand, however, fell to 12% from 17%.
The study also pointed to growing barriers to borrowing, with 60% of consumers abandoning their credit applications before completion, up from 57% a year ago.
High borrowing costs were the biggest deterrent, cited by 35% of respondents, followed by access to alternative funding sources at 32% and employment-related restrictions at 28%.
“When six in ten of those who considered borrowing walk away from a credit application, the issue is more friction than intent,” Sun said.
“The opportunity for lenders is to make credit more inclusive, so responsible borrowers are not lost to cost, complexity or eligibility barriers.”
The TransUnion study surveyed 961 adults in the Philippines between April 29 and May 19, 2026.
