Credit Scores as Catalysts for Financial Inclusion

In the Philippines’ journey toward becoming an upper middle income economy, access to formal credit remains both a challenge and an opportunity. Credit scores, often overlooked in the public discourse, are in fact one of the most powerful levers in enabling wider participation in the financial system.

The 2024 Credit Perception Index (CPI) by TransUnion underscores the urgency: only 54% of the unbanked population are familiar with formal credit products, a significant drop from last year and far below the 70% recorded among the general population. This deterioration in credit literacy comes at a time when the Bangko Sentral ng Pilipinas (BSP) has already surpassed its target of digitalizing 50 percent of retail payments, achieving 52.8%  in 2023.

Digital adoption is accelerating, but credit inclusion is lagging. Without a functioning credit profile, millions remain excluded from the most transformative financial products such as business loans, mortgages, and affordable credit lines that can drive long term economic mobility.