Financial account ownership among Filipinos at 50%

Half of Filipino adults had formal financial accounts in 2025, with gains recorded among the youth and women, a Bangko Sentral ng Pilipinas (BSP) survey showed.

According to the BSP’s 2025 Consumer Finance and Inclusion Survey (CFIS) released this week, 50% of Filipino adults owned bank, e-wallet, and other types of transaction accounts in 2025, down from 56% in 2021.

“This was partly driven by a decrease in transaction accounts linked to loans, particularly from microfinance institutions and cooperatives. This trend was consistent with the lower incidence of borrowing from these institutions,” the central bank said.

Adults with accounts with microfinance institutions and cooperatives went down to 5% and 2% last year, respectively, from 9% and 5% in 2021, the data showed.

“This decrease was aligned with lower loan incidence in these institutions: microfinance NGOs (nongovernment organizations) from 10% in 2021 to 6% in 2025, and cooperatives from 4% to 1% over the same period.”

Meanwhile, ownership of e-money and bank accounts remained steady at 36% and 23%, respectively.

At the household level, account ownership continued to grow, with 85% of households having at least one account in 2025, up from 74% in 2024, data from the BSP’s Consumer Expectations Survey (CES) showed. “While account ownership is uneven individually, household-level access is strong… This suggests that many families rely on shared financial access rather than individual account ownership.”

The BSP noted that women have surpassed men in ownership of more sophisticated accounts like bank accounts, which shows greater gender parity. Bank account ownership among Filipino women increased to 25% in 2025 from 20% in 2021, while men’s share stood at 22% last year versus 26% over the same period.

“Filipino women have consistently recorded higher account ownership than men since 2017, driven by the support of microfinance NGOs and in recent years, the expansion of e-money wallets and bank accounts,” it said.

“Beyond gender differences, disparities persist across income, education, and geography. Higher-income, better-educated adults are significantly more likely to own accounts. Regional differences remain pronounced, with urbanized regions showing higher ownership than predominantly rural areas.”

Account ownership among young adults aged 15 to 19 also rose to 34% in 2025 from 27% 2021, the central bank said, showing financial inclusion gains.

E-money was the main driver of account ownership at both the individual and household levels.

Digital finance also continues to grow as 62% of households said they used electronic devices for online financial transactions in 2025, rising from 53% in 2024, according to the CES.

This was driven by high levels of smartphone ownership, which rose to 86% in 2025 from 81% in 2021. The survey also showed that in 2025, 89% of Filipino adults said they use the internet, up from 77% in 2021, with over half (55%) doing so via mobile data.

“The BSP continues to work with government, private sector, and development partners under the National Strategy for Financial Inclusion 2022 to 2028 to broaden access to financial services. These efforts promote digitalization, financial literacy, consumer protection, and trust in the formal financial system, helping improve the financial health of all Filipinos.”

BORROWING, INVESTMENT

Meanwhile, the report also showed that formal borrowing is now more common than informal borrowing, showing progress toward “safer and more regulated” credit markets.

“While fewer Filipino adults are borrowing, at 25% in 2025 from 45% in 2021, the source of borrowing shifted from informal lending sources to safer and more regulated formal loans. In 2025, 16% of the total adult population borrow from formal channels such as banks, while only 10% relied on informal lenders. This marks a reversal from 2021, when informal borrowing was more common,” the BSP said.

Microfinance institutions remained the primary source of loans, but online lending platforms have also expanded their reach as more borrowers prioritize fast loan processing and approval. Other important borrowing considerations are repayment period, interest rate, and ease of application.

“Personal loans are the most common, followed by salary loans, multipurpose loans, and business loans. Many continue to rely on borrowing to meet basic needs such as food, education, and health expenses,” the BSP said.

“Most borrowers demonstrated sound repayment behavior, with a majority paying on time or ahead of schedule. However, a sizable minority reported difficulty in repayment.”

Meanwhile, overall insurance coverage and pension participation among Filipino adults continues to be largely driven by government-led schemes. Voluntary insurance uptake remains limited, especially among lower-income and less-educated groups, it said.

The data also showed that only 23% of adults reported having an investment in 2025, down from 36% in 2021.

“Overall investment participation declined compared with earlier years, and voluntary investment activity remains low, reflecting constrained disposable income and limited risk appetite among many adults,” the central bank said. “Investment participation is concentrated among higher-income, better-educated, and older adults, with motivations centered on achieving life goals and preparing for emergencies.”

Progress was also seen in several aspects of financial health, but it noted that low income and less educated individuals remained vulnerable in terms of stability. “Challenges persist in emergency preparedness and in maintaining adequate liquidity to manage potential income shocks.”

LITERACY GAINS

Despite this, Filipinos’ financial literacy and capability have improved, the report showed.

In 2025, 74% of the surveyed adults were able to correctly answer at least half of the six financial literacy questions, improving from 69% in 2021. “Understanding of risk and diversification is relatively strong, while knowledge of interest rates — particularly compound interest — continues to lag,” the BSP said.

Meanwhile, 86% said they have a personal budget, but financial confidence remains limited, with only 43% of adults feeling satisfied with their current situation.

“This shows that financial control does not always translate into financial confidence or resilience. When given extra funds, households prioritize emergency savings and family support, reflecting strong social values but also highlighting limited capacity for formal saving and investment.”

Awareness of financial products and services is also high, with increased interest seen for virtual assets. “Filipinos also demonstrate strong financial security awareness. Around 78% avoid sharing personal information online, while 64% verify if financial institutions are regulated before transacting,” the BSP added.

Most are also aware of their consumer rights, it said.

The 2025 CFIS has 8,784 completed interviews of adult respondents aged 15 years old and above across all regions of the Philippines, The survey was conducted from Feb. 16 to July 24, 2025.

“The 2025 CFIS highlights that financial inclusion in the Philippines has achieved broad reach, particularly through digital channels and household-level access. However, the findings also make clear that access alone is insufficient,” the BSP said.

“Sustained efforts are needed to deepen usage of financial products and services beyond transaction accounts, improve financial capability, and enhance consumer protection.”

Source: Business World

Over 60% of Filipinos targeted by financial scams

Over 60% of Filipino adults experience financial scams each year, with attempts happening nearly every other day and average losses per person amounting to nearly P12,000, according to a survey.

The State of Scams in the Philippines 2025 Report, which is based on a survey conducted by the Global Anti-Scam Alliance (GASA) in collaboration with Mastercard and Whoscall, said 65% of the 1,000 respondents claimed to have been scammed from February 2024 to February 2025, with each victim experiencing an average of 2.3 scams.

Meanwhile, 77% said they encountered a scam in the period for an average of 239 scam attempts per year.

Some 31% of the respondents said they lost an average of P11,896.30 per person to scams, with a total of P280.5 billion stolen for the period.

The GASA said that e-wallets (74%) are typically used by fraudsters to receive illicit proceeds of fraudulent activities, followed by wire or bank transfers (14%).

“When nearly one in three Filipinos loses money to a scam, it’s not just a digital safety issue. It’s a household stability issue. People are cutting back on daily needs, doubting the tools they rely on, and carrying the emotional weight long after the scam is over.

Solving this requires partners working together instead of fighting the problem in silos,” GASA Asia-Pacific Director Brian D. Hanley said in a statement.

The report showed that scams involving investments (65%), unexpected money (64%), and shopping (58%) were the most prevalent type of attacks experienced by Filipino adults.

The GASA said 85% of scam attempts in the Philippines in the period occurred on platforms that have a direct message function, with the top channels being used by scammers being text/SMS message (75%), instant messaging apps (50%), and social media (50%).

“Facebook and Telegram were identified as the top platforms where scams occur, while TikTok and Instagram were the hardest places for victims to immediately recognize fraudulent activity,” it added.

“The study also highlighted who is most vulnerable. Gen Z consumers were found to be the least confident in spotting scams, while Millennials lost the most money on average, at over P14,000 each. Seniors in the Silent Generation (76%) and residents in suburban areas (72%) reported the highest prevalence of scam exposure.”

However, even as they encountered several scams, only 73% of victims said they report these attempts, with 59% of these people saying that either no action was taken (40%) or they aren’t sure what the outcome was (19%).

“No loss of money is the main reason scam encounters don’t get reported,” the GASA said. “Being unsure whom to report scams to was the main reason for not reporting encounters.”

“Almost three quarters reported their scam to the payment service, and one tenth said their money was at least partially recovered,” it added.

Almost half of those scammed said it impacted their well-being (48%), and the majority said it made them feel stressed (88%).

While this resulted in increased vigilance for about half (57%), others had to reduce normal spending behavior (23%) or take on additional debt or loans (20%).

In a sign of improving financial literacy, the survey found that 98% of Filipinos said they take at least one step to check if an offer is real or a scam by checking a brand or seller’s social media page, reading online reviews, or confirming activity on official accounts.

“However, experts warn that these surface-level checks can only go so far, as scammers are increasingly able to clone profiles, fabricate engagement metrics, and mimic verified pages to appear credible. Hence, combatting scammers is not an issue that should fall on consumers alone, but should be supported by the ecosystem at large,” the GASA said. “This calls for an effort among banks, digital platforms, telecom operators, and regulators to improve protections for ordinary consumers.”

It said that to empower consumers, authorities should launch permanent national campaigns to raise scam awareness, establish national helplines for scam victims, and create integrated victim support systems offering financial, legal, and psychological help.

They should also take steps to create a safer digital world by building infrastructural protections with telecoms and tech providers to block scams before they reach consumers and  improving fraud traceability across borders by requiring transparency from sellers, platforms, and payment providers.

“As scams grow more sophisticated, they are no longer isolated incidents — they are a perpetual digital threat, inflicting both financial loss and social trauma. Protecting Filipinos requires systemic cooperation between industries and government to restore trust in the digital economy,” Mastercard Philippines Country Manager Jason Crasto said.

Source: Business World

Why the psychology of ‘utang’ matters for the economy

Debt or “utang” is not just a financial tool anymore. It is the lifeline that keeps many Filipino families afloat. With consumer spending making up about 70 percent of the economy, every peso that is spent keeps the economy moving.

When households keep buying, businesses do well but when they cut back, growth slows down. The tougher reality is that a lot of this spending is sustained by utang, drawn from savings, credit cards or loans simply to keep everyday life moving.

Behavioral finance explains that this behavior is rooted in a concept called present bias, which is the tendency to put more weight on immediate rewards than on future costs.

In the late 1990s, psychologists David Laibson of Harvard University and Ted O’Donoghue of Cornell University published an influential study that revealed how people often choose short-term satisfaction, such as spending or borrowing today, even when it leads to bigger problems later.

This bias explains why households continue to spend, even when incomes fall short, interest rates rise or debt levels grow. The pleasure of maintaining a lifestyle today feels more tangible than the burden of repaying loans tomorrow.

Extension of income

Combined with easy access to credit cards, installment plans and digital lending apps, present bias makes utang feel less like a burden and more like a convenient extension of income.

Recent data on the marginal propensity to consume (MPC) highlight this behavior. Before the pandemic, Filipino households typically spent 58.6 percent of their income in the first quarter, then pulled back midyear, before a sharp surge to nearly 70 percent during the Christmas season. Spending followed a familiar rhythm: spend, save, then splurge at year-end.

Since 2022, however, the pattern has changed dramatically. The first quarter spending rate has dropped to 54.4 percent, while the second and third quarters turned negative at -16 percent and -141.2 percent, respectively.

This means households are not only cutting back but also financing spending by dipping into savings or accumulating debt. Even the usual year-end rebound is weaker, with spending in the fourth quarter at just 61 percent, below prepandemic highs.

A negative MPC is a red flag. It signals that many households are keeping up their spending not with income, but with credit. This is present bias at work. Rather than cutting back, families choose to borrow so they can maintain the same lifestyle, even if it means pushing the real cost further into the future.

When incomes stagnate…

There is only so much households can borrow to keep spending at the same pace. Families stretch themselves to maintain their lifestyles, even when incomes stagnate and inflation eats into budgets. When borrowing fills the gap, the economy may still look steady but once the financial pressure builds, momentum may eventually weaken.

This slowdown is already showing in the data. In the first quarter of 2024, household spending grew by 8.3 percent compared to 2023, but in the first quarter of 2025 the pace slowed to 7.7 percent.

The second quarter tells the same story. Spending grew by 8.9 percent in 2024, but slipped to 6.8 percent in 2025. Taken together, total household spending in the first half of 2025 grew by 7.2 percent, down from 8.6 percent in the same period of 2024. The trend is clear. Growth is losing steam, and with much of consumption propped up by debt, the risks of a sharper slowdown ahead are rising.

Why does borrowing feel so normal? Because it has become part of everyday life. Taking on debt is seen as a practical choice. Credit cards, “buy now, pay later” apps and installment plans make it easy, while social pressures make it hard to say no.

Present bias then blinds households to the consequences. A family that borrows P20,000 at 3-percent monthly interest may end up repaying almost P30,000 in a year.

That money could have gone into savings or investments, but instead it locks them into repayment cycles.

Break the bad cycle

Breaking free from the psychology of utang takes both awareness and discipline.

Families need to recognize that spending habits are not just cultural but also behavioral.

One way to break the cycle is to reframe the question. Instead of asking, “Can I afford the monthly payment?” ask, “What will this really cost me a year from now?” That small shift can turn the focus from short-term comfort to long-term impact.

Debt can keep the economy afloat for a while, but over time it leaves households and businesses weaker. Real resilience comes when families move away from utang-driven spending and focus instead on saving and sustainable consumption.

In the end, stability doesn’t come from borrowing just to look secure, but from building financial strength that lasts.

Source: Inquirer