The Philippine economy is gaining momentum as robust growth and record-low inflation in Q2 2025 create favorable conditions for credit expansion, according to research from global insights firm and credit reference agency TransUnion.
The economy grew 5.5 percent year-over-year in the second quarter, driven by strong household spending, a rebound in agriculture, and easing inflation, which fell to just 1.4 percent in June—a multi-year low. Concurrently, the Bangko Sentral ng Pilipinas (BSP) lowered policy rates to 5.25 percent by the end of Q2 and further to 5 percent by August, easing borrowing conditions for consumers and businesses.
TransUnion reports that formal credit demand surged 49 percent in the first half of 2025, led by personal loans (+75 percent YoY) and credit cards (+50 percent YoY). Despite increased credit activity, delinquency rates remain stable, suggesting responsible borrowing behavior among Filipinos.
The latest TransUnion Credit Perception Index (CPI) shows a stable credit sentiment score of 73, with rising trust in credit products and growing intent to borrow from formal sources like traditional and virtual banks. However, barriers such as high interest rates (59 percent) and fraud concerns (52 percent) continue to temper consumer confidence.
Peter Faulhaber, president and CEO of TransUnion Philippines, emphasized the importance of fostering trust and responsible lending: “By ensuring that borrowing is both responsible and empowering, we can help turn openness into meaningful action that benefits households and the economy alike.”
With positive economic fundamentals and improving credit sentiment, TransUnion sees strong potential for lenders to grow their portfolios—provided they prioritize risk management and consumer education. The agency will share further insights during its 2025 Financial Services Summit in September, focusing on strategies for deeper financial inclusion.
