The personal loan market is experiencing a decline in consumer interest, attributed to the prevailing high-interest rate environment but younger Filipinos are more eager to explore credit services.

Based on the latest consumer survey of TransUnion Philippines, the general sentiment among Filipinos in terms of their financial situation is leaning on the upside as the economy recovers.

However, there was a 46 percent decrease in consumers planning to apply for a personal loan in the second quarter compared to 52 percent in the previous quarter.

The survey showed that rising interest rates was one of the reasons for consumers' hesitance to apply for credit next year.

According to the survey, 84 percent noted that high interest rates will moderately or highly likely impact their decision to apply for credit, up two percentage points from the previous quarter.

Nonetheless, there is a growing percentage of Gen Z consumers who see credit as an important financial tool.

Among Gen Z consumers, 68 percent said that access to credit and lending products is important to be able to achieve their financial goals, inching up by three-percentage points the previous survey.

Based on the survey, more Gen Z consumers are planning to apply for a new credit card, a new personal loan, and a new Buy Now Pay Later (BNPL) product.

The TransUnion study also showed that more consumers recognized the importance of monitoring credit reports, noting that credit understanding and effective management are key elements of financial health.

TransUnion Philippines president and CEO Pia Arellano said younger consumers are increasingly engaging with the value of credit monitoring services.

'This is a positive sign that Filipinos are looking to take better control of their finances, ultimately enabling them to gain greater access to and responsibly use credit to unlock increased economic opportunities,' Arellano said.

On the other hand, the percentage of respondents reporting worse than planned household financial situations increased to 27 percent from 25 percent while those who saw higher income declined to 41 percent.

Still, there is a positive consumer sentiment for next year amid an improving economy that would drive spending up.

Copyright © 2022 PhilSTAR Daily, Inc Provided by SyndiGate Media Inc. (Syndigate.info).