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Gen X, millennials reel from COVID-19 financial impact

While two-thirds (66%) of Philippine consumers have reported a negative impact on their household income in the second quarter, Gen X and millennial respondents (also known as Gen Y) were the most affected.
Image credit: Konstantin Evdokimov on Unsplash

While two-thirds (66%) of Philippine consumers have reported a negative impact on their household income in the second quarter, Gen X and millennial (also known as Gen Y) respondents were the most affected. This is according to TransUnion’s Consumer Pulse study.

“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,” said TransUnion Philippines president and CEO Pia Arellano in a press statement.

Household income

“Despite this, many respondents are still hopeful that their finances will recover which is a good sign of their economic outlook. Our results show the provision and availability of credit is a big feature for Filipino finances and consumers’ ability to balance household finances in the coming months. Lenders need to make informed decisions so they can extend consumers the products best suited to their individual needs and circumstances, and help build a sustainable recovery whilst also managing risk effectively,” Arellano said.

According to the TransUnion study, the COVID-19 financial impact was most prominent for Gen X (69%) and millennials (68%).

Moreover, the findings showed the outlook is still uncertain, with 54% of respondents expecting their household income to be impacted in the future — an increase of five percentage points from the previous quarter. The majority of consumers (85%) continued to be concerned about being able to pay their bills and loans, with nearly half (49%) anticipating they’ll be unable to pay at least one of their current bills and loans in full.

Digital services

Among all the respondents, 74% expressed positive feelings about their financial outlook, with 61% classifying their financial situation as hopeful – where their household income has decreased, but they think their finances will recover. On the other hand, 8% said their financial situation was either stable or thriving – where their household income has not decreased and their finances in 2021 are as planned or better. Meanwhile, 5% said they were resilient as their household income has decreased during the pandemic (currently or in the past) but their finances have fully recovered.

Philippine consumers indicated they plan to increase or at least retain their household spending over the next three months. Seventy-two percent said they will increase or at least retain their spending on digital services and 61% on retail (clothing, electronics, etc.). 

However, everyday living priorities are still in order as 77% said they will also increase or at least retain spending on medical care/services, 74% on bills and loans, and 62% on retirement funds/investing.

Meanwhile, 57% expect their number of online transactions to increase over the next three months. However, alongside increased online activity levels is the rise in fraud activity, as reported in TransUnion’s most recent global fraud study.