Card payments in Philippines to hit P2.8 trillion by 2025

MANILA, Philippines — Card payments in the country will continue to rebound in the next three years amid increased consumer spending as the overall economy recovers from the impact of COVID-19

GlobalData, a leading data and analytics company in the UK, said card payments in the Philippines would likely increase at an annual rate of nine percent to hit P2.8 trillion ($55.7 billion).

This year alone, card payments are seen growing 11.6 percent to reach P2.2 trillion ($44 billion) from P2.01 trillion in 2021.

Of the P2.2 trillion for 2022, P1.3 trillion will be through credit and charge cards while the remaining P945.8 billion will be coursed through debit cards.

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

GlobalData lead banking and payments analyst Ravi Sharma said the Filipino card payments market is on the road to recovery supported by economic revival and a rise in consumer spending.

Over the past two years, economic uncertainties due to COVID forced consumers to cut down on spending, which affected the card payments market, especially the credit and charge card markets.

But as economic activities start to gain traction again, these will drive consumer spending, which in turn will support the overall growth of the payment card market.
Sharma said the government’s timely measures to control the pandemic and the pace of vaccination helped the reopening of businesses.
The Philippines has traditionally been a cash-based economy largely due to the high unbanked population, inadequate banking infrastructure, as well as limited public awareness of electronic payments.
However, Sharma emphasized that with concerted efforts by the government and improvements of banking infrastructure, the Philippines has seen a rise in card payments in the past few years,

“Although COVID has affected the payments industry due to a decline in overall consumer spending, the pandemic has also highlighted the importance of non-cash payment tools which will boost electronic payments,” Sharma said.

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.
Data from the central bank showed that such a move resulted in a 175 percent increase in the number of monthly credit card applications a year after the regulation took effect.