According to data and analytics company GlobalData, card payments in the Philippines are anticipated to expand by double digits in 2023 as consumer spending rises.
GlobalData predicted that card payments in the nation would increase by 10.1% in 2023 alone to reach the P2.5 trillion mark.
According to the report, the country’s 12.3% increase in card payments in n2022 was boosted by the economic rebound and more robust consumer spending following the COVID hiatus.
GlobalData further revealed that the card payments in the nation would increase at a compound annual growth rate of 7.5% and total P3.4 trillion by 2027.
One hundred twenty-six million debit cards were in the nation in 2022, compared to only 10.9 million credit and charge cards.
However, consumers in the nation preferred using credit and charge cards, which made up 53.1% of the total value of card payments in 2016. According to GlobalData, this results from credit and charge card incentive programs and the possibility of instalment payments.
The Philippines has a high rate of unbanked citizens, a weak banking infrastructure, and little consumer understanding of electronic payments, making cash the most common form of payment there. But over the past few years, the Philippines has seen an increase in card payments thanks to the government’s concerted efforts and advancements in the nation’s banking system, according to Kartik Challa, senior analyst of banking and payments at GlobalData.
While the value of card payments in the Philippines decreased by 5.6% in 2020 as the economy contracted due to the COVID pandemic, the card market experienced 10.9% growth in 2021 as consumer spending increased and the economy began to recover.
As banks and retailers promoted using digital payments to stop the virus’s spread, GlobalData believes the pandemic contributed to the nation’s growth of non-cash payment methods.
According to Challa, the Philippine government’s attempts to support the economy and businesses, as well as rising consumer spending and more excellent consumer knowledge of digital payments, are all anticipated to propel the country’s card payments market further.
Although card payments have resumed growth after the pandemic, GlobalData indicated that high product prices continue to be a problem since they impact household spending.
Inflation dropped from 8.6% in February to 7.6% in March 2022 as food and transportation costs increased more slowly.
But even so, the March inflation rate is higher than the 4% figure for the same month in 2022.
The Bangko Sentral ng Pilipinas increased the interest rate on credit cards in January 2023 from 2% to 3% per month, making credit more expensive.