ANALYSIS: Borrowing is helping Filipinos make ends meet, but it could come at a cost

TransUnion data shows more Filipinos are turning to credit as emergency, personal, and family expenses put pressure on household finances.

There is something curious happening in the way Filipinos are managing their money.

For an increasing number of Filipinos, credit is becoming a way to get through the month when the paycheck falls short. It can help cover an emergency or an unexpected family expense, but relying on that cushion too often could mean carrying today’s financial pressure into tomorrow.

A new study from TransUnion found that only 64% of respondents expect their finances to improve over the next three months, while 73% expect improvement over the next 12 months, according to its 2026 Credit Perception Index. Both figures fell 3 percentage points from 2025 and were the weakest since 2023.

At the same time, Filipinos are becoming more comfortable with formal credit. The overall Credit Perception Index rose to 75 from 73, while credit card use climbed 7 percentage points to 38% and ‘buy now, pay later’ (BNPL) adoption jumped 8 points to 26%. Personal loan use also edged higher. 

That means more Filipinos are becoming willing to use formal financial products when they need access to money, giving households more options when cash falls short. But it also means credit is becoming more deeply woven into how Filipinos manage everyday financial pressure.

Reasons for borrowing

But the bigger story may be why Filipinos are borrowing. Emergency expenses topped the list at 59%, followed by personal expenses at 50% and family needs at 45%.

That points to credit doing more than helping consumers pay for things they want. It is increasingly being used when something needs to be paid and the money simply isn’t there yet.

There is also a notable change in where Filipinos are turning for that financial cushion. Intent to borrow from family and friends fell to its lowest level since 2023, while future borrowing intent increased most for digital banks, traditional banks and credit cards.

That can be a positive development for financial inclusion. Formal financial products can give households more options when unexpected expenses come up, while reducing their dependence on informal borrowing.

The concern comes when the cushion becomes something households need repeatedly.

A credit card, personal loan or BNPL facility can provide breathing room when money is tight. But if borrowing becomes a regular way to cover household expenses, the underlying pressure remains even after the bill is paid. The expense has simply moved forward.

That is particularly worth watching when inflation and fuel prices are already weighing heavily on consumers.

Credit can give Filipino households room to breathe, but the danger is when that breathing room becomes something they need every month.

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