15 Apr 2021 – 93% of Pinoys suffer income loss due to COVID-19

by Louella Desiderio (The Philippine Star), 15 Apr 2021

MANILA, Philippines — Majority or 93 percent of Filipinos saw their household income negatively affected by the COVID-19 pandemic, according to a survey by global and information insights company TransUnion.

TransUnion’s Consumer Pulse Survey conducted from March 5 to 22 covered 865 adults to assess the financial impact of COVID-19 on consumers.

TransUnion’s survey showed that 65 percent of consumers saw their household income currently being negatively impacted by the pandemic, while 28 percent said they have been negatively affected but not at present.

The survey also showed 49 percent of the respondents expect a reduction in their household income in the future.

Among the respondents whose household income is currently negatively impacted by the pandemic, 45 percent said a member of the family had lost their job.

Meanwhile, while 42 percent said they or someone in the household reduced work hours, and 24 percent said a business owned by a member of the household either had to close shop or saw a reduction in orders.

As a result, it has become more challenging to manage household budgets.

The survey showed 88 percent are concerned about their ability to pay their current bills and loans in full, with 48 percent reporting they will not be able to pay their bills in less than four weeks.

Consumers whose household income is currently negatively impacted have also made changes when it comes to savings or paying debts with 47 percent reducing discretionary spending and 31 percent canceling or reducing digital services.

Around 48 percent said they saved more in emergency funds, while 26 percent paid their debt faster, and 19 percent put more savings for retirement.

TransUnion’s research also found that fraudsters are adding to the pressure and taking advantage of consumers’ move to the digital space during the pandemic with 44 percent of respondents saying they were recently targeted by digital fraud related to COVID-19 and four percent becoming victims.

Gen X respondents or those born from 1965 to 1979 have been the most susceptible to falling for digital fraud related to COVID-19, with nine percent indicating they had acted on attempts and become a victim.

The top pandemic-themed digital scam for those targeted with COVID-19-related digital fraud is phishing at 40 percent, followed by third-party seller scams on legitimate retail websites at 31 percent.

To address obligations, 49 percent of those who reported their household income to be currently negatively impacted said they planned to use their savings to pay current bills.

Around 44 percent said they would borrow money from a friend or family member, and 45 percent would pay a partial amount.

The survey showed more than a quarter or 28 percent have received financial accommodation such as deferral, forbearance, payment holiday or eviction prevention in the past year.

“Financial hardship due to the pandemic is broadly felt across all markets that TransUnion surveyed. At this time of prolonged uncertainty, it is important that there is a dialogue between credit institutions and their customers. To help consumers, lenders are now incorporating alternative and trended data into their lending strategies. Leveraging such information can result in more informed decisions and trustworthy relationships between consumers and lenders, which is especially important as uncertainty has reigned over the credit landscape during much of last year,” TransUnion president and chief executive officer Pia Arellano said.