Close to 50 percent of respondents in the Philippines currently have debts or loans amid rising prices, according to a study by consumer research and data analytics firm Milieu Insight.
The study, which looked at financial realities in Southeast Asia, found that 47 percent of the respondents in the Philippines have taken on debts or loans.
Conducted last June, the study covered 500 respondents each in Singapore, Thailand, Vietnam, Malaysia, Indonesia and the Philippines.
Across Southeast Asia, 62 percent of respondents currently have debts or loans.
“As Southeast Asia grapples with the compounding challenges of inflation reflected by rising energy bills, food prices, and interest rates, a distinct financial landscape is emerging. The impact of these economic factors has far-reaching consequences, particularly on debt vulnerabilities, impacting overall borrowing habits, and the financial well-being for individuals and businesses in the region,” Milieu Insight said.
Among the different financial obligations, the study showed money owed to individuals or money lenders was the most prevalent in the Philippines (18 percent), followed by Buy Now Pay Later services (11 percent), and credit cards (nine percent).
For respondents across Southeast Asia, credit cards topped the list at 22 percent, followed by debts to individuals or money lenders at 18 percent.
In the Philippines, the need for immediate funds was cited as the top reason for getting a loan at 41 percent, while covering unexpected expenses like medical bills and car repairs came in next at 35 percent.
Across the region, the same reason was cited as the primary driver for taking on loans at 37 percent, followed by covering unexpected expenses at 30 percent.
Indebtedness is a concern with 17 percent of Philippine respondents unable to save after deducting expenses and debt or loan repayment from their income. This is higher than the regional average of 14 percent.
In terms of comfort levels with loans, the study showed 52 percent of respondents in the Philippines are uncomfortable talking about their debts or loans with others, slightly lower than the regional average of 53 percent.
The study also revealed 28 percent of respondents in the Philippines lack personal financial education, higher than the regional average of 25 percent.
Milieu Insight said it is important for individuals to be able to understand the distinction between a good and bad loan through financial education.
“By fostering a culture of learning and financial awareness, we can equip our communities with the tools to make sound financial decisions and achieve financial security,” Milieu Insight said.