1 in 5 households have borrowed to buy basic goods – BSP survey


ONE in five households in the country have used loans in the past 12 months, mostly to buy basic necessities, a recent survey by Bangko Sentral ng Pilipinas (BSP) showed.

The central bank’s third-quarter consumer expectations survey showed that 22.6% of households surveyed had used a loan in the past year.

Survey data also showed that surveyed households used their loan proceeds in the past 12 months primarily to purchase basic commodities, with 56.5% of households stating that this was their goal for the loan. .

Meanwhile, around 24% of households that took out a loan said the proceeds would be used for starting or expanding a business and 12.8% of respondents said it was the payment. of their other debts.

At the same time, 9.2 percent of households reported having taken out a loan for health-related expenses and 7.6 percent for the purchase of motor vehicles.

Households that took out loans during the period were mostly in the middle income group.

BSP data showed that 40.4 percent of households that received loans were in the middle-income group, while 33 percent were in the low-income group and 26.6 percent in the high-income group.

By geographic area, the percentage of households that used a loan in the past 12 months was highest in regions outside of the National Capital Region (NCR).

Banks are not the best lenders

While a significant portion of households took out loans during the year, BSP data also showed that banks were not the choice of Filipino households for borrowing money.

In particular, relatives and friends remained the main providers of loans during the third quarter survey period, with 30.7% of all borrowing households borrowing from their close circle. Next come credit companies at 16.9%, individual lenders at 13.7% and cooperatives at 9.2%.

Only 7.9% of borrowers surveyed said they took loans from banks while 7.6% said they took loans from government institutions.

The majority of loans made by households, at 79.2%, were unsecured.

Meanwhile, households that received a secured loan used the following assets as collateral: ATM account at 5.9%; real estate at 1.8 percent; land at 1.6 percent; and, stock certificates or 1.5 percent post-dated checks.

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