TransUnion Flags Credit Perception Gap Outside GCR

Leading information and insights company TransUnion Philippines says that despite improved attitudes towards credit among general Filipinos, significant credit perception gaps persist, particularly for those living outside the Greater Capital Region (GCR)[1].

According to Weihan Sun, TransUnion’s Principal of Research and Consulting for Asia Pacific, its 2024 Credit Perception Index (CPI) study highlights a growth in the overall Filipino CPI score to 69. However, a deeper dive into the study found that GCR residents scored 77 compared to 58 among non-GCR residents[2].

The CPI score is a value from 1-100 which reflects a person’s knowledge, trust and favorability towards credit products.

Findings also revealed that credit perceptions differ across urban[3], suburban[4] and rural[5] communities – in general, the more urban the area a person lives in, the higher their credit perception score.

In terms of possible factors affecting those different perceptions, urban residents’ most favored sources for credit information include social media (65%) and banks/ financial institutions (59%). On the other hand, suburban and rural residents depend most heavily on family and friends (63% and 60%, respectively).

This reliance on personal networks among suburban and rural residents correlates with a lower credit perception, as the information passed along is often based on individual experiences rather than professional financial insights and information.

As a result, these individuals are more likely to have limited understanding and knowledge of credit products, in some cases, reinforcing misinformation and contributing to lower trust and favorability towards credit.

To promote greater financial literacy and financial inclusion, Sun identified vital efforts such as the Bangko Sentral ng Pilipinas’ (BSP) ongoing leadership in financial inclusion and education, as well as active collaborations between rural banks and FinTech providers to accelerate digital transformation to improve access, which is essential to facilitate understanding in financial and credit products.

For TransUnion, financial inclusion is a key priority for the company in the Philippines. “Addressing to the needs of the rural population, we actively support rural banks through a proactive engagement strategy, offering the latest market updates, data-driven insights and creating information campaigns to expand economic opportunities for Filipinos outside urban areas,” added Sun.

“While much has been achieved in recent years to enable greater financial inclusion, there remains more to be done to educate Filipinos, especially those outside urban areas. A holistic, comprehensive effort is needed to drive equitable access to financial services – which is the foundation for growing the Philippines into a more financially resilient nation,concluded Sun.