The Philippines auto finance market refers to the financial services provided by banks, non-banking financial institutions (NBFIs), and other financial institutions in the Philippines for the purchase of automobiles. The Philippines' auto finance market has grown steadily over the years as a result of factors such as rising car demand, the availability of simple financing options, and the country's growing middle class. Customers can select from a wide range of financial products offered by several local and international market participants.
The most common types of auto financing in the Philippines are installment loans and leasing. Installment loans are loans that are repaid in regular installments over a predetermined time period, whereas leasing allows customers to use a vehicle for a predetermined period in exchange for regular payments. Furthermore, some banks provide balloon payments, which allow customers to make lower monthly payments while making a larger final payment at the end of the loan term.
Major players in the Philippines auto finance market include banks such as BDO, BPI, Metrobank, and Security Bank, as well as non-bank financial institutions (NBFIs) such as BPI Family Savings Bank, PSBank, and EastWest Bank. Car manufacturers and dealerships offer auto financing as well, and they frequently work with banks and NBFIs to provide financing options to their customers.
In recent years, the Philippines government has taken steps to support the auto industry and promote the use of electric vehicles through policies such as tax breaks and subsidies. This has increased interest in electric and alternative fuel vehicles, which could fuel further growth in the auto finance market in the coming years.
The Philippine government imposed strict lockdown measures during the early stages of the pandemic, resulting in the closure of car dealerships and a reduction in consumer mobility. As a result, new car sales fell significantly, reducing demand for auto financing. Many consumers were hesitant to take out new loans or leases due to the uncertain economic environment.
However, as restrictions were gradually lifted and the economy reopened, the auto industry and auto finance market began to recover. As many consumers avoided public transportation in favour of private vehicles, the demand for personal mobility increased. This increased the demand for used vehicles, which are typically less expensive than new vehicles.
As a result, Philippine banks and non-bank financial institutions (NBFIs) have adapted their financing strategies to meet changing market conditions. They have introduced new loan products with flexible repayment terms, lowered interest rates, and relaxed their credit requirements in order to attract customers. Furthermore, some banks have developed digital platforms to assist customers in applying for loans and completing the financing process online.
Philippines Auto Finance Market Key Players:
The Philippines Auto Finance Market study provides market data by competitive landscape, revenue analysis, market segments and detailed analysis of key market players such as; MetroBank, BDO Bank, PS Bank, Eastwest Bank, The Philippine National Bank, Security Bank Corporation, Radiowealth Finance Company, Asia Link Finance Corporation League, DBP Leasing Corporation, BPI Capital Corporation, Cebu International Finance Corporation.
Philippines Auto Finance Market Segmentation:
By Type of Vehicle Financed: Based on the Type of Vehicle Financed, Philippines Auto Finance Market is segmented as; Motorcycles, New Vehicles, Used Vehicles.
By Banks and Non-Banks: Based on the Banks and Non-Banks, Philippines Auto Finance Market is segmented as; Banks, Non-Banks.
By Type of Banking Institutions: Based on the Type of Banking Institutions, Philippines Auto Finance Market is segmented as; Commercial and Universal Banks, Thrift Banks.
By Nature of Vehicles: Based on the Nature of Vehicles, Philippines Auto Finance Market is segmented as; New Vehicles, Used Vehicles.
By Type of Vehicle Sold: Based on the Type of Vehicle Sold, Philippines Auto Finance Market is segmented as; Commercial, Motorcycles, Passenger.
By Tenure of Loans: Based on the Tenure of Loans, Philippines Auto Finance Market is segmented as; For New Vehicle (1 year, 2 years, 3 years, 4 years, 5 years or more), For Used Vehicle (1 year, 2 years, 3 years or more).
By Region: In the Philippines, the NCR region has the largest sales registration value and the majority of the country's registered vehicles are located here. A rise in the number of vehicles financed, credit disbursed, and auto loans outstanding is anticipated in the Philippines auto finance business.
This study also encompasses various drivers and restraining factors of this market for the forecast period. Various growth opportunities are also discussed in the report.