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Philippines: Study shows 2/3 of consumer income affected by pandemic
MANILA, Philippines — Two-thirds of consumers saw their income negatively affected by the COVID-19 pandemic in the second quarter, with the impact more pronounced for Gen X and millennials, according to a survey by information and insights company TransUnion.
Conducted from June 1 to 16, TransUnion’s Consumer Pulse study covering 1,100 respondents showed 66 percent reported their household income was negatively impacted in the second quarter.
The study also showed the impact was more prominent in middle-aged consumers with 69 percent of Gen X, or those born in 1965 to 1979, and 68 percent of millennials, or those born in 1980 to 1994, affected.
The outlook remains uncertain with 54 percent of respondents expecting their household income to be impacted in the future, up five percentage points from the previous quarter.
A majority or 85 percent remain concerned about payment of bills and loans and nearly half or 49 percent expect they would be unable to pay at least one of their current bills and loans in full.
To pay for current bills or loans, 43 percent of consumers plan to use money from savings.
For millennials, those who will use savings to pay for bills or loans is at 47 percent, while the figure is at 42 percent for Gen X.
The study showed middle generations are still in need of credit as 52 percent of Gen X and 50 percent of millennials said they intend to apply for new credit or refinance existing credit within the next year.
“The second quarter started with stricter quarantine restrictions anew as the Philippines faced a surge in COVID-19 infections. The economic consequences of the pandemic remain prevalent across many aspects of our study data, and in some cases, we are seeing worsening results – from consumers’ inability to pay bills and loans to being targeted and falling victim to fraud schemes,” TransUnion president and chief executive officer Pia Arellano said.
Despite this, she said many respondents are still hopeful that their finances will improve.
The study showed 74 percent of respondents have positive feelings on their finances, with 61 percent considering their financial situation hopeful or they think their finances will recover even if their household income has decreased.
Meanwhile, eight percent said their financial situation was either stable or thriving, and five percent said they were resilient as their household income has decreased during the pandemic, but their finances have fully recovered.
Over the next three months, local consumers plan to increase or at least maintain the current household spending.
The study showed 72 percent would increase or at least retain their spending on digital services and 61 percent on retail such as clothing and electronics.
It also showed 77 percent plan to hike or keep spending on medical care, 74 percent would do the same for bills and loans, and 62 percent on retirement funds or investments.
The study likewise looked at financial inclusion and found that 86 percent of respondents believe access to credit is at least moderately important to achieve their financial goals, but only 32 percent have sufficient access to credit.
Majority or 77 percent of all respondents are of the view, monitoring credit is very important with 68 percent keeping track of their credit at least per month.
Of the total respondents, more than half or 57 percent expect their number of online transactions to increase over the next three months.
The study showed 42 percent have been targeted by a digital fraud scheme but did not become a victim of it.
Meanwhile, six percent acted on the scheme and became a victim.
Among the common COVID-19 related digital fraud schemes consumers experienced were phishing (40 percent), third-party seller scams on legitimate retail websites (29 percent), and shipping fraud (24 percent).
“We’ve seen in both the digital fraud attempts monitored by TransUnion’s fraud analytics solutions and the responses of consumers on ground that fraud remains a persistent global problem. As we continuously work to regain our economic progress, it is crucial that businesses, consumers, and the government approach recovery holistically. This entails creating programs and actions in response to insights similar to those we’ve shared, while at the same time maximizing the available digital solutions that can help fast-track results and accelerate growth in areas that it is needed most,” Arellano said.
Source: https://www.philstar.com/business/2021/08/05/2117617/study-shows-23-consumer-income-affected-pandemic