The digital lending market in the Philippines is poised for explosive growth, projected to surpass US$1 billion by the second half of 2025. This surge comes even as the International Monetary Fund (IMF) slightly downgraded the country’s economic outlook for 2024 and 2025, citing high food prices.
A recent study by Digido, a leading online lending platform, revealed this promising trend. Their analysis predicts non-bank digital lenders will dominate the market, capturing a 55.2% share or US$556.5 million.
Digital banks are also expected to see significant growth, holding a projected 44.8% share, equivalent to US$451 million.
“Our latest findings affirm the majority of Filipinos’ growing pivot towards digital sources of credit as part of their personal finance management,” said Rose Arreco, Digido’s business development manager.
“We are optimistic that these lending segments will be able to maintain their high growth rates in view of its accessibility for the financially underserved, progressive government support and various projects promoting further digitalization,” she added.
Lending boom fueled by preference for online financial services
During the ten months of 2024, both non-bank digital lenders and digital banks generated 58.9 million app downloads. Should dynamics improve or maintain, Digido expects the total number of downloads for both non-bank digital lenders and digital banks to have reached approximately 73.5 million in 2024.
On the other hand, from 2013 to 2023, the Philippines’ digital lending market has been growing at an average of 28% (or US$68 million) per year.
This digital lending boom is fueled by Filipinos’ growing preference for convenient online financial services. Digido’s report also highlights the role of Generation Z, a tech-savvy demographic comprising a third of the population, who are particularly receptive to mobile-based financial technology solutions.
The IMF’s economic downgrade, however, cautions of potential headwinds. While the downgrade is minor, with growth still expected at a respectable 6.1% in 2025, high food prices have tempered private consumption.
Lending industry outlook remains bright
Despite these challenges, the outlook for the Philippines’ digital lending market remains bright.
The digital lending sector’s ability to thrive amidst a broader economic slowdown, according to the Digido study, underscores its resilience and potential to be a key driver of financial inclusion in the Philippines.
Easing inflation, gradual monetary policy reduction, and an uptick in foreign direct investments (FDI) are seen as positive signs.
Digido is a digital lending platform and the first and only fully automated online service in the country that grants loans at any time of the day. Services under the Digido platform are financed by Digido Finance Corp. with SEC Registration No. 202003056 and Certificate of Authority No. 1272.
Digido’s trusted services have been lauded by the Global Retail Banking Innovation Awards, International Finance Awards, World Business Outlook Awards, International Business Magazine Awards, Pan Finance Awards, The Global Economics Awards, the Global Banking & Finance Review and the Global Financial Market Review.