COVID-19 has had a strong influence on consumer lending in the Philippines. The negative economic impact of the pandemic, and the economic uncertainty that has emerged in its wake and in the light of more recent global events, have put pressure on the household finances of much of the country’s population.
Awareness of credit and its advantages remains relatively low in the Philippines in 2022, leaving considerable room for growth improvement. In particular, many Filipinos would benefit from information and education regarding access to credit via different financial institutions.
PAG-IBIG fund, the government-owned and controlled corporation responsible for the administration of the national savings programme and affordable shelter financing for Filipinos, hit record-high numbers of mortgages/housing loans in Jan-Apr 2021. The market of PAG-IBIG differs from that of private banks in that it grants socialised home loans to low-income and minimum-wage workers in need of credit to purchase their own house.
With its extensive card portfolio, BDO Unibank Inc remained the leading issuer of credit cards in the Philippines in 2021, closely followed by Bank of the Philippine Islands (BPI) and Metropolitan Bank & Trust Co – Metrobank (MBTC). Leading providers continue to focus on their digitalisation strategies with one eye on the future.
As interest rates rise in response to inflation, consumer gross lending in the Philippines may see something of a slowdown in growth over the forecast period. If rates continue to go up then the appeal of consumer loans may go down and become accessible primarily to a minority of higher-income consumers who will still be able to make repayments.
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Consumer Lending
Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.
See All of Our DefinitionsThis report originates from Passport, our Consumer Lending research and analysis database.
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