Philippines faces rising household debt as credit card use surges 30%
The ASEAN+3 Macroeconomic Research Office (AMRO) has urged Philippine regulators to tighten oversight of consumer lending. Concerns have grown over rising household debt, driven by a sharp increase in unsecured loans like credit cards and salary advances. The warning follows a surge in retail borrowing, which jumped by 23.5% in September alone.
Retail loans in the Philippines climbed to PHP 1.82 trillion in September, with credit card debt alone rising nearly 30% to PHP 1.09 trillion. This growth coincides with the Bangko Sentral ng Pilipinas (BSP) cutting key interest rates by 175 basis points to 4.75% since August last year.
AMRO’s recommendations focus on curbing risks from unchecked consumer credit growth. If adopted, measures like sectoral loan limits and fee caps could help stabilize household debt levels. The BSP has yet to announce specific policy changes in response to these suggestions.
