Card Payments in Philippines Set to Inflate This Year

Leading data analytics company, GlobalData has forecasted that the card payments market in the Philippines can be expected to increase by 11.6 percent in 2022 to reach PHP2.2 trillion. Despite being heavily hit by the pandemic, the market is well on its path to recovery fuelled by the economic revival and upsurge in consumer spending. 

Covid has adversely impacted countries worldwide. It created economic uncertainty and forced consumers to cut down on spending, which struck the card payments market hard, especially credit and charge cards.

GlobalData’s Payment Cards Analytics found that the value of credit and charge payments dropped by 16.2 percent in 2020, while debit cards saw a slow growth of 3.6 percent.

The Philippine government’s prompt course of action to control the pandemic and the pace of vaccinations have helped businesses reopen swiftly. This will support card payment recovery, which is expected to increase at a compound annual growth rate (CAGR) of 9.1 percent between 2021 and 2025 to reach PHP2.9 trillion in 2025.

“While cash remains the most preferred method of payment in the Philippines, 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,” commented Kartik Challa, Payments Senior Analyst at GlobalData.

With the relaxation of covid restrictions and the economy shifting into post-pandemic recovery mode, the card payments market is anticipated to experience rapid growth.

GlobalData’s Payment Cards Analytics forecasted that debit card payment value would inflate by 12.4 percent this year while credit and charge card payment value would grow by 11.0 percent.

The central bank’s recent regulation to decrease the interest rate on credit cards will further promote credit card usage. Effective from November 2020, interest rate on credit cards were capped at 2 percent per month, or 24 percent per annum, compared to the previous rate of 42 percent.

“The payments card market in the Philippines registered healthy growth in the past few years. 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.”