Lower interest rates and slower economic growth do not affect non-bank lenders in the same way they affect traditional banks. This was shared by Tala Philippines’ General Manager Moritz Gastl during a recent media briefing.
As Gastl explained, a slowdown in the country’s gross domestic product (GDP) doesn’t immediately stop fintech companies like Tala from providing loans. GDP is a “lagging indicator,” meaning its effects on daily life are often felt later.
For our customers at Tala, what matters more is inflation, especially the rising prices of essential goods and services. Many Filipinos live paycheck to paycheck, and when necessities such as food and transportation become more expensive, it becomes harder for them to repay loans, regardless of GDP figures.
That is why at Tala, we focus on flexibility and understanding real-life circumstances instead of simply tightening credit during economic slowdowns. Our experience shows that Filipinos want to repay their loans, they just need options that adjust to difficult periods such as economic downturns or natural disasters.
The Philippine economy is still adjusting to a low-interest-rate environment. In the third quarter, GDP grew by 4%, lower than the government’s target of 5% to 5.5%. The Bangko Sentral ng Pilipinas (BSP) has already cut policy rates by a total of 175 basis points to help stimulate the economy. However, these rate cuts do not directly lower interest rates for non-bank lenders. Gastl explained that unlike banks, fintech companies do not borrow directly from the central bank.
Consumer Lending Association of the Philippines (CLAP) President Arianne Ferrer added that most fintechs fund their operations through their own capital or partnerships. Because of this, changes in BSP policy rates do not immediately affect their cost of funds or loan pricing.
Ferrer also shared that at Tala, we use dynamic, risk-based pricing. This means interest rates and loan amounts are based on a customer’s repayment behavior, not on central bank rates. Good borrowers are rewarded over time with better loan terms.
Even during economic slowdowns, fintech companies like Tala continue lending because we leverage data science and artificial intelligence to assess risk responsibly. In fact, we often see more loan applications during crises or natural disasters, when financial needs become urgent and traditional credit may be harder to access.For us at Tala, financial inclusion means being present when people need us most. We design our products to help Filipinos manage emergencies, support their families, and stay resilient despite rising prices or slower growth. Even when GDP slows, we remain committed partners in helping Filipinos navigate financial challenges and work toward a more secure financial future.