Read the Bangko Sentral ng Pilipinas’ 2025 Financial Inclusion Survey quickly and you get a story of progress. Seventy-four per cent of adults answered at least half of the survey’s six financial literacy questions correctly, up from 69 per cent in 2021. Smartphone ownership reached 86 per cent, internet use 89 per cent. The share of households transacting financially online climbed to 62 per cent from 53 per cent a year earlier. Household-level account ownership rose to 85 per cent from 74 per cent.
Read it slowly and the picture complicates. Account ownership among individual adults fell — to 50 per cent in 2025 from 56 per cent in 2021. Microfinance accounts dropped to 5 per cent from 9 per cent. And borrowing collapsed: 25 per cent of adults borrowed in 2025, against 45 per cent in 2021. Of those who did, only 16 per cent used a formal lender. Ten per cent used an informal one.
So Filipinos understand money better, transact digitally more, and engage with formal credit less. That combination is worth sitting with, because the usual explanations do not fit.
It is not a literacy problem
The comfortable assumption in financial education is that people avoid formal credit because they do not understand it. The survey undercuts that directly: literacy rose while formal borrowing fell. Whatever is keeping people out, it is not ignorance of how interest works.
Nor is it access in the physical sense. A person with a smartphone, an internet connection and an e-wallet is, technically, one download away from a dozen lenders. Distribution has been solved.
It is a documentation problem, and a memory problem
What has not been solved is proof. Formal lending in this country still runs on a specific evidentiary chain: a payslip, a certificate of employment, sometimes a bank statement showing salary credits. Each is a proxy for stable income, and each assumes an employer who issues paperwork.
That assumption excludes a large and growing share of people who are earning perfectly well — commission-based sellers, contract professionals, online sellers, freelancers billing foreign clients, drivers on platforms, small business owners who pay themselves irregularly. They have income. They cannot document it in the form the process expects.
The second factor is reputational. From 2021 onward, the online lending sector in the Philippines was defined publicly by its collection practices — the messages to contacts, the calls to employers, the pressure applied through a borrower’s social circle. The Securities and Exchange Commission froze registration of new online lending platforms in November 2021 largely in response. It is reasonable to think a share of the drop in formal borrowing is people who decided the formal option was not worth the exposure.
What the new rules changed
On 1 August 2026, the SEC lifted that moratorium under Memorandum Circular No. 20, Series of 2026 — but rewrote the terms of entry. Lenders must now show the full breakdown of principal, interest, fees, penalties and schedule before a loan is approved. Borrowers must actively confirm they understand it; automatic release of funds is prohibited. And lenders may not harvest a borrower’s contact list or contact third parties without written consent, consistent with the Data Privacy Act.
For anyone comparing options, that gives you three checkable things rather than a general impression:
First, does the total cost appear on screen before you accept? Not the daily rate — the total repayable amount. Second, does the app request access to your contacts? Under the new rules it has no reason to, and the permissions list on the app store page tells you before you install. Third, is the operating company’s legal name and Certificate of Authority number published somewhere you can verify?
Where the market is adjusting
Some lenders have started designing around the documentation gap rather than around the collection shortcut. A handful of licensed platforms now assess on a single government-issued ID plus basic employment details — PeraSure, operated by Sulit Lending Corporation, is one of them, and sets terms at three to six months rather than a matter of weeks, which spreads repayment across more than one payday.
That tenor point deserves attention when you are comparing offers, because it is where short-term credit usually goes wrong. A loan due in seven days assumes you will have the entire principal plus charges within the week. If you are paid twice a month, or your client settles in 30 days, that assumption fails, and what follows is a rollover — at which point the effective cost has nothing to do with the rate you were quoted.
The number to compute
Whatever you borrow and from whom, compute the total repayable amount and divide it by the number of paydays it spans. Then ask whether that figure survives contact with your actual budget against a backdrop in which electricity costs have risen 12 per cent year on year and core inflation has reached a 31-month high.
The survey suggests Filipinos are increasingly capable of doing that arithmetic. The market is only now being required to give them the inputs.