The blind spot in Philippine credit and the case for full picture credit

A quiet contradiction sits at the heart of financial inclusion in the Philippines.

More Filipinos today are inside the financial system than ever before. Accounts have expanded rapidly, driven mainly by digital wallets and mobile connectivity. On paper, this is progress.

But access is not the same as recognition.

Millions of Filipinos transact every single day by paying bills, sending remittances, topping up mobile credits, earning through platforms, managing small businesses, among many other financial transactions. These are not marginal ac-tivities. They are the economy in motion. Yet when these same individuals apply for credit, much of this behavior is not reflected.

The system, quite simply, does not see them.

THE LIMITS OF TRADITIONAL CREDIT
Credit markets rely on information. But in the Philippines, that information remains narrowly defined and limited to formal financial histories such as loan records, credit cards, and deposit relationships. For many Filipinos, es-pecially those in the informal or semi-formal economy, these records are thin or nonexistent.

The result is predictable. Credit decisions are made with partial data. Risk is assessed conservatively. Borrowers without traditional histories are either excluded or priced unfavorably.

This is not a failure of discipline on the part of borrowers. Rather, it is a failure of visibility. A person who pays rent and utilities on time, keeps up with digital subscriptions, manages e-wallet spending, and even accumulates merchant rewards through consistent transactions is demonstrating financial discipline and a capacity to pay. But if these signals remain outside the credit system, that discipline goes unrecognized and unrewarded.

A DIFFERENT STARTING POINT
The conversation, then, should not begin with banking products. It should begin with how Filipinos actually manage money.

Financial responsibility today is no longer confined to banks, but is dispersed across digital channels that Filipinos use every day. In 2024, more than half of all retail payments (57.4%) were already digital, driven by e-wallets, QR payments, and online transactions. An estimated 58 million Filipinos now use e-wallets, generating a constant stream of transaction data from subscriptions and remittances to merchant purchases and platform income. These signals are measurable and verifiable. The issue is not their absence, but that they remain largely excluded from formal credit evaluation. Yet they remain largely disconnected from formal credit assessment.

This gap between economic activity and institutional recognition is now one of the central barriers to meaningful financial inclusion.

FROM ACCESS TO ADVANTAGE
If the first phase of inclusion was about opening accounts, the next phase must be about making those accounts (and the behaviors around them) count.

This is where the idea of full picture credit becomes relevant. Full picture credit is not a new product. It is a shift in perspective. It asks straightforward questions: what if creditworthiness reflected the full range of a person’s financial be-havior, not just their interaction with banks? What if, when assessing a person’s credit, lenders can actually see the full picture?

Under this model, individuals could, with their consent, allow lenders to access a broader set of financial utility payments, digital transaction histories, remittances, rewards points, and other indicators of financial disci-pline. This would be made possible through secure, standardized data-sharing mechanisms already being developed under the country’s open finance initiatives.

The effect is immediate. More data reduce uncertainty. Less uncertainty allows for more precise risk assessment. And more precise risk assessment leads to better outcomes: higher approval rates, more appropriate loan sizes, and fairer pricing.

WHY THIS MATTERS NOW
The urgency is not theoretical.

While account ownership has increased significantly, a substantial portion of Filipinos remain unbanked. Even among those with accounts, many use them primarily for payments rather than savings or credit-building. This cre-ates a paradox: a financially active population that remains credit invisible.

Small entrepreneurs, freelancers, and gig workers generate steady income streams. Households manage recurring expenses with discipline. But without recognized data, these patterns do not translate into formal financial opportunity.

Bridging this gap requires more than expanding access. It requires expanding recognition.

LESSONS FROM ELSEWHERE
As the case in many other advancements in law or policy, we have the benefit of hindsight and international successes to look to.

In the United Kingdom, open banking has enabled consumers to share transaction data securely with lenders, supporting cashflow-based credit models that evaluate real-time affordability. Brazil has gone further, building a na-tionwide open finance infrastructure that integrates multiple financial sectors. Early results point to improved credit allocation and more competitive pricing for borrowers with clearer data profiles.

India’s Account Aggregator framework demonstrates how consent-driven data sharing can operate at scale, enabling faster loan approvals and broader access for individuals and small businesses outside traditional credit sys-tems. Even in emerging systems like Cambodia’s Bakong, the digitization of everyday payments is laying the groundwork for future credit innovation.

Across these examples, the pattern is consistent: when systems evolve to capture real economic behavior, credit markets become more inclusive and more efficient.

THE PHILIPPINE ADVANTAGE
The Philippines does not need to start from scratch. Regulators have already established the foundations. The Bangko Sentral ng Pilipinas has adopted an Open Finance Framework centered on interoperability and consent. Pilot programs are underway. Regulatory sandboxes are active. The legal framework for data rights is firmly in place.

At the same time, Philippine digital ecosystem is unusually well-suited for this transition. Mobile usage is pervasive and e-wallet penetration is high. Digital payments are embedded in daily life.

Filipinos are already generating the data needed for full picture credit. The question is whether the system will use it.

MAKING DATA WORK FOR PEOPLE
There is a tendency to frame data sharing as a risk. It usually is, but only when control is absent.

The Philippines’ Data Privacy Act provides a strong counterbalance. It expressly provides that individuals own their data, and that its use depends on informed consent.

Full Picture Credit operates within this framework. It does not compel disclosure, rather, it enables choice. For example, a borrower who wants to demonstrate a fuller financial profile can approach any personal information controller and invoke the right of data portability, but instead of giving the data to the subject, it can be sent through secure Application Programming Interfaces (APIs) to the individual’s lender of choice. That way, the lender now has more of the person’s financial data to make a more informed decision on credit worthiness.

Data, in this sense, becomes an economic tool.

WHAT COMES NEXT
The next step is not conceptual. It is operational.

Policymakers, regulators, and industry participants must work toward expanding the range of data that can be securely and responsibly used in credit assessment. Standards must be clear, consent mechanisms must be robust, and consumer understanding must be strengthened.

Most importantly, the system must align with reality. Filipinos are already participating in the digital economy. They are already demonstrating financial discipline in ways that matter. What remains is to ensure that these be-haviors are recognized and rewarded.

Because what credit cannot see, it cannot value. And what it cannot value, it cannot unlock.

The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX.

Ira Paulo Pozon is senior partner at Pozon Recto Petrache and Laiz Law Offices. He has an MBA (DLSU), JD (FEU), LLM (U. of Nottingham) and has been a fellow at the Asia Global Institute (U. of HK) and the Lee Kuan Yew School of Public Policy (Natl. U. of SG).

irapaulopozon@gmail.com