UMVA has learned that many Filipino families are struggling to make ends meet as oil prices continue to soar, cutting into their already tight budgets. For Arlene L. Roberto, a 38-year-old housewife, managing her family's finances has become a daily challenge. She allocates her husband's wages to cover rent, utility bills, and other household expenses for their three children.
But when the oil prices surged, her husband's workplace, a plastic factory, scaled back operations, reducing his workdays and overtime hours. This sudden change put even more pressure on their already strained budget. "He used to never take days off, but now he's been given a day off, so he has fewer workdays. Our budget, which used to at least be enough, now falls short," Ms. Roberto explained.
Jacinto John Tan, Jr., a 34-year-old food delivery rider, also feels the pinch of rising fuel costs. Every spike in fuel prices directly affects his daily earnings, most of which is now spent on gasoline. "It is heavy in the pocket," he said.
The recent surge in global oil prices, triggered by the outbreak of war in the Middle East, has exposed import-dependent countries like the Philippines to heavy inflationary pressures. The Bangko Sentral ng Pilipinas (BSP) has taken steps to anchor inflation expectations, including raising borrowing costs by 25 basis points to 4.5%.
Inflation accelerated to 4.1% in March, mainly driven by the year-on-year increase in the transport index. The consumer price index further accelerated to a three-year high of 7.2% in April amid elevated oil prices.
To make ends meet, many Filipinos are turning to buy-now-pay-later (BNPL) services provided by digital finance platforms. Ms. Roberto uses Atome mainly for groceries, while Mr. Tan uses Atome, Shopee, and TikTok for various products. These services have become a common fallback for consumers like them, but they differ from traditional credit in structure, cost, and repayment terms.
BNPL services provide consumers with a clear repayment plan upfront, including the number of installments and payment dates. This structure helps users track spending easily and lessens uncertainty around repayment obligations. The services are also more embedded into digital commerce experiences, allowing consumers to access financing seamlessly during checkout.
For consumers like Ms. Roberto and Mr. Tan, BNPL services have become a vital tool for managing their finances. However, experts warn that the growing use of credit for everyday expenses exposes households to new financial pressures. When households begin using credit to fund basic consumption, it signals rising financial stress.
This type of borrowing does not generate income and can quickly erode household resilience. In a geopolitical shock, such as the Middle East conflict, these households become more vulnerable to defaults.
Economists stress that consumer protection measures are essential to mitigate the risks associated with BNPL services. These measures include standardized cost disclosure, mandatory reporting to credit bureaus, and affordability checks. Regulators must also impose limits on charges, strengthen financial literacy efforts, and closely monitor credit expansion.
Despite these risks, BNPL providers expect a strong outlook for the industry's growth in the Philippines. They anticipate stronger integration between BNPL, digital wallets, cards, and QR-based payment ecosystems, creating a more seamless consumer payment experience. However, the next phase of growth will likely be driven not only by customer acquisition but also by sustainable portfolio quality, responsible lending practices, and deeper consumer trust.
