Card payments in Philippines seen at P2.2 trillion this year

MANILA, Philippines — Card payments in the country will continue to recover this year on the back of consumer spending boost, as the overall economy rebounds from the pandemic.

GlobalData, a leading data and analytics company in the UK, said card payments may improve by 11.6 percent in 2022 to reach P2.25 trillion.

This compares to the estimated P2.01 trillion card payments value in 2021.

Over the next three years, card payments are expected to increase to P2.9 trillion by 2025 or an annual growth rate of 9.1 percent.

Of the P2.25 trillion for 2022, P1.3 trillion will be through credit and charge cards, while the remaining P945.7 billion will be coursed through debit cards.

This represents an 11 percent growth for credit and charge cards, and 12.4 percent hike for debit card payments.

GlobalData senior analyst Kartik Challa said the card payments market in the Philippines is on the recovery path, supported by the economic revival and rise in consumer spending.

The local card payments market has been registering robust growth since 2016, but this has stalled since 2020 due to the economic downturn amid the pandemic.

“The COVID adversely affected most global economies and the Philippines was no exception. The economic uncertainty caused by the pandemic forced consumers to cut down on spending, which affected the card payments market, especially credit and charge cards,” Challa said.

Challa said the government’s timely measures to control the pandemic and the pace of vaccination helped the reopening of businesses.

While the Philippines remains hugely a cash-based economy, Challa said the use of payment cards has grown rapidly during the past few years, supported by increasing financial awareness and banks’ efforts to promote electronic payments.

The easing of COVID restrictions and economic recovery are expected to support the faster pace of growth of card payments.

The government has been taking various initiatives to increase card penetration and usage.

In 2020, the central bank passed a regulation to cap credit card interest rate at two percent per month or 24 percent annually compared to the average annual rate of 42 percent. It also capped the interest on credit card installment plans at a percentage per month.

Such a move aims to make credit card interest rate at par with neighboring countries Thailand and Malaysia, and also ease debt burden on credit card holders as lower rates will make borrowing cheaper, thereby making purchases on credit more affordable.

“Although it was affected by the pandemic, the market rebounded and is anticipated to continue its uptrend, supported by the revival in economic conditions, improving payments infrastructure and government initiatives,” Challa said.