Filipinos’ credit trust grows, but fraud fears remain

Filipinos are becoming more open to using credit, but concerns over interest rates and digital fraud continue to limit widespread adoption, according to TransUnion’s 2025 Credit Perception Index (CPI).

The Philippines’ overall CPI score stands at 73 out of 100, reflecting relatively stable sentiment toward credit, with a significant six-point gain in trust toward credit products compared to 2024.

“We are glad to see the CPI score holding largely steady in 2025, supported by growing trust in credit products,” said Peter Faulhaber, President and CEO of TransUnion Philippines.

“More encouragingly, this year’s CPI results also tell us that Filipinos are eager to learn more about financial options that are relevant, accessible, and suited to their needs,” he added.

Launched in 2023, the CPI study is part of TransUnion’s initiative to deepen financial literacy and promote responsible borrowing in support of national inclusion efforts.

While credit trust increased, the report noted a nine-point drop in credit messaging receptivity, indicating hesitancy in acting on financial education—largely due to external factors.

High interest rates and fraud fears emerged as the top two deterrents to credit use across all consumer segments, cited by 59% of the general population, 52% of unbanked Filipinos, and 61% of FinTech users.

These findings underscore a key challenge: even as trust improves, Filipino consumers still seek stronger safeguards before fully engaging with credit products.

Notably, the unbanked population’s CPI score rose from 65 to 67, narrowing the gap with the general population from nine points to six.

Among the unbanked, trust in credit products jumped nine points, while product knowledge grew eight points, with the most significant gains in familiarity with mobile loans (+16pp), payday loans (+15pp), and micro loans (+12pp).

Despite these improvements, major external obstacles remain.

High interest rates were cited by 59% of the general population, 52% of the unbanked, and 61% of FinTech users as the top deterrent to applying for credit.

Concerns about scams and fraud were nearly as high, affecting over half of all respondents across groups.

“Consumers still require stronger assurances through safer and more supportive credit environments,” the report stated.

Security and trust were cited by 58% of respondents as a top consideration when choosing a financial provider, just behind convenience (60%).

The 2025 CPI also introduced a new segment: FinTech users, who posted the highest CPI score at 74 and led all other groups in general credit knowledge at 71%.

Among Filipinos, 91% reported using at least one FinTech product, with eWallets (77%), online banks (51%), and digital payment apps (47%) being the most popular.

Notably, for Gen Z and Millennials, eWallets were more likely to be their first financial product than bank accounts.

While interest in credit is rising, optimism about personal finances is waning.

Despite 73% expecting their income to increase in the next three months, more Filipinos also anticipate financial difficulty, with confidence in short- and long-term outlooks dropping 7–8 percentage points from 2024.

Still, 84% said they plan to save more, and 68% are looking to improve their financial literacy.

Intent to borrow from formal institutions is growing. More consumers plan to use traditional banks (+15pp), virtual banks (+9pp), and credit cards (+5pp) for future credit, while borrowing from family or friends declined by 9pp.

Stigmas around credit use persist, especially regarding the number of application requirements and the perceived risks of products like credit cards (24%), personal loans (22%), and home loans (22%).

At the same time, more Filipinos see Buy Now, Pay Later (BNPL) services (51%) and overdraft protection (28%) as helpful credit options.

The report also highlighted a shift in how Filipinos access financial information.

Social media remains the leading source across all groups, while trust in banks and financial institutions as sources of knowledge declined by seven points in the general population.

“We must continue addressing persistent barriers—especially concerns around fraud and security that still deter many Filipinos from engaging with credit,” Faulhaber said.

“By fostering trust and enhancing financial education, we can empower more Filipinos to participate confidently in the credit economy,” he added.